Individuals
or companies wanting to make use of the offshore
sector in St Vincent and the Grenadines normally
constitute either or both of an International
Business Company or a Trust.
The International Financial Services Authority
(IFSA) of St Vincent and the Grenadines announced
in May 2004 that offshore agents would henceforth
be able to incorporate companies for their
clients online.
This
development meant that instead of taking one
day to file the relevant documents and issue
company certificates, the IFSA can now commit
to ensuring that company documents are available
for collection within three hours of the filing
of the information by the agent. The online
registry system operated by the Authority
also allows agents to pay their annual fees
over the internet, to reserve company names,
and to conduct searches of company files.
The system is operated using a pre-payment
model.
St. Vincent and the Grenadines International
Business Company
The International Business Companies Act No.18
of 1996 and regulations SRO No. 33 of 1996
and their amendments governed the incorporation
of International Business Companies in St.
Vincent and the Grenadines until 2008 when
new International Business Companies legislation
was passed.
The
SVG International Business Companies (Amendment
and Consolidation) Act 2007 received Royal
Assent on February 22nd.
Key
features of the International Business Company
are as follows:
- No
residency or nationality requirement for
shareholders, officers and/or directors
of SVG IBCs.
- Companies
may be formed with as few as one shareholder
who may be a natural person or a juridical
entity.
- Companies
may be formed with as few as one director,
who may be a natural person or a juridical
entity.
- No
requirement for a company secretary.
- IBCs
may own land in the jurisdiction, although
foreigners may require an alien landholding
licence.
- Exemption
from taxation; under present regulations
there are no personal income taxes, estate
taxes, corporate income taxes or withholding
taxes for SVG IBCs.
- Ability
for IBCs to benefit from the Caricom Tax
Treaty in return for payment of tax at
1% on annual profits.
- No
requirement for the filing of annual reports
or accounts with any government authority
in SVG, expect for IBCs benefiting from
Caricom tax treaties.
- Authorized
share capital may be denominated in any
recognised currency.
- No
minimum capital requirement.
- Shares
may be issued fully paid, partially paid,
or nil paid.
- Company
seal not mandatory.
- Identity
of beneficial owners, shareholders and
directors not required to be filed in
any public record unless the directors
elect to do so.
- Register
of charges must be kept, but there is
no requirement for this to be filed on
public record.
- Provision
for continuation of companies to and from
anywhere around the globe, and for local
companies incorporated to migrate to the
IBC register.
- Streamlined
procedures for Articles of Incorporation,
mergers or consolidations with foreign
corporations.
- Shelf
companies available.
- Expedited
incorporation process in as little as
24 hours subject to name availability
and reservation.
- Trustees
of shares of SVG IBCs held in an SVG trust
enjoy similar status to trustees of VISTA
trusts in the BVI. Trustees have an overriding
duty to hold the shares and have no duty
to oversee the management of the underlying
company, unless so provided in the trust
deed or the Articles and By Laws.
The
2007 IBC Act also makes provision for the
incorporation of segregated cell companies
where pre-incorporation clearance has been
obtained from the International Financial
Services Authority, the local regulator.
The
Act, like similar legislation in other jurisdictions,
provides that such companies may be approved
by the regulator where they are formed to
be used as a mutual fund or a captive insurance
company. However the SVG Act goes further;
approval may be given where the company is
formed for any other purpose approved by the
local regulator.
Under
this last category, companies established
for the purpose of owning, managing, and developing
or investing in real estate (in any part of
the world) will be approved for incorporation
as segregated cell companies, provided certain
strict criteria are met.
Fees
are laid down by the International Business
Companies Amendment Regulations 2003. The
total IBC incorporation fee payable to the
government is USD225, with an annual renewal
fee of USD100 (2011).
By
December 31, 2010, there were 8,645 IBCs
registered in St Vincent and the Grenadines.
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St. Vincent and the Grenadines Limited Duration
Company
The
IBC Act also makes provision for limited duration
companies (pass through companies known as
limited liability companies in the USA and
resembling the German GmbH and Latin American-style
“Limitada”) with a single member,
and provides for the governance of such entities
under private operating agreements as opposed
to by-laws.
A company incorporated under the IBC Act may
at any time apply to the Registrar to be registered
as a limited duration company. The name of
the company needs to include at its end "Limited
Duration Company” or the abbreviation
"LDC”.
The Registrar needs to be provided with a
certified copy of a special resolution of
the company altering its Articles to limit
the duration of the company to a period of
30 years from the date of its incorporation
or less.
A
limited duration company may by special resolution
alter its Articles extending the duration
of the company to such period or periods not
exceeding in aggregate 100 years from the
date of the incorporation of the company.
The Articles or By-Laws of a limited duration
company may prohibit the transfer of any share
or other interest of a member of the company
absolutely, or may provide that the transfer
of any share or other interest of a member
requires either the unanimous resolution of
all the members or a resolution passed by
such proportion of the members as the Articles
or By-Laws may specify.
The Articles or By-Laws of a limited duration
company may provide that a person ceases to
be a member of the company upon the happening
of any one or more of the events specified
in the Articles, and may further provide that
the rights of such former members shall be
limited to an entitlement to receive such
value for their shares in the company as may
be determined by the Articles or By-Laws.
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St.
Vincent and the Grenadines Trusts
Trusts
are constituted under the International Trusts
Act 1996, as amended by the International
Trust Amendments Act 2002.
Trust
deeds are registered in a confidential government
Trust Registry, whereupon an official Certificate
of Registration is issued to the Settlor/Grantor.
Key
features of the current trusts regime are
as follows:
-
A
duly registered trust will not be rendered
unenforceable because it was invalid under
the laws of the Settlor/Grantor’s
domicile or residence. Thus, forced heirship
law and community property regimes can
be avoided.
-
The traditional rule against perpetuities
and the rule against accumulations are
modified and clarified in thne current
legislation.
-
Purpose trusts, which are created for
a specific purpose but without named beneficiaries,
are allowed and statutorily prescribed.
-
The role and duties of protectors are
specifically set out and clarified to
account for recent case law.
-
Choice-of-law and conflicts-of-laws issues
are anticipated and resolved in favor
of the provisions of the International
Trust Act.
-
A foreign (non-Vincentian) judgment against
a registered International Trust (or its
settler or beneficiaries) is not enforceable
in Saint Vincent if the judgment was based
on law inconsistent with the International
Trust Act, 1996.
-
Actions against registered international
trusts must be commenced within two years
from date of creation of the trust.
-
A complaining creditor may satisfy his
claim against the property of a registered
international trust only if that creditor
can show both that the settlor/grantor’s
principal interest in creating the trust
was to defraud him, that the disposition
of property to the trust rendered the
settler/grantor insolvent.
-
Traditional fraudulent conveyance laws
(Statute of Elizabeth) are not applicable
to registered international trusts.
-
The bankruptcy or insolvency of the settler/grantor
under the laws of his residence or domicile
will not affect a registered international
trust.
-
An international trust may own one or
more Saint Vincent International Business
Companies.
-
Registered trustees fall within the definition
of ‘financial institutions’
of the Proceeds of Crime Money Laundering
Prevention Act 2001 and are thereby subject
to its anti money laundering requirements.
The
registration fee for a trust is USD300, plus
an annual fee of USD150.
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