St Kitts and Nevis Executive Summary

St Kitts and Nevis Executive Summary

St Kitts and Nevis are islands in the Caribbean Sea, total 261 sq km in area, population 40,000. The climate is tropical, tempered by constant sea breezes and there is little seasonal temperature variation. There can be hurricanes.

The capital is Basseterre, on St Kitts. Bradshaw International Airport, near Basseterre, can handle large jets. There are now direct flights from New York, Philadelphia, Miami and London.

St. Kitts became Britain's first colony in the West Indies with the founding of a settlement in 1623. The Federation of St Kitts and Nevis finally attained full political independence within the Commonwealth in 1983 and, in order to relieve the anxiety of Nevisians, Nevis acquired autonomy within the Federation, together with its own Legislature and Cabinet. In 1998, a vote in Nevis on a referendum to separate from Saint Kitts fell short of the two-thirds majority needed. Unlike most other English speaking Caribbean jurisdictions, St Kitts and Nevis is neither a dependency, nor a crown colony of Britain, which means that it is not subject to the EU's Savings Tax Directive.

The legal system is largely based on English Common Law, and appeal is to the Caribbean Court of Appeal based in Trinidad and Tobago.

Although sugar dominated the agricultural sector until 2005, when it was finally abandoned as a major crop, activities such as tourism, export-oriented manufacturing, and offshore banking have assumed larger roles in the economy. GDP growth was good in 2004 and 2005, but while St Kitts & Nevis was one of the stronger Caribbean economic performers in 2007 and 2008, with growth of 3.2% in 2008, the IMF has predicted that the economy will contract by 1.2% in 2209. The Federation's currency is the East Caribbean dollar, pegged at 2.7 to the US dollar.

St Kitts and Nevis has offshore legislation as a Federation, but so does Nevis independently. On the whole, St Kitts focuses on attracting inward industrial and tourist investment, while Nevis concentrates more on offshore asset protection. Nevis has been particularly successful with its LLC (Limited Liability Company) legislation.

In 2000, St Kitts and Nevis found itself on the OECD and FATF blacklists, but was removed from both after promising to tidy up legislative problems, which was done with a number of enactments in 2001-2003. However, the jurisdiction was 'grey listed' by the OECD in 2009 as a territory which had committed to, but not substantially implemented, the Organization's transparency standard (a minimum of 12 Tax and Information Exchange Agreements).

ST. KITTS AND NEVIS: EXECUTIVE SUMMARY

St Kitts and Nevis Executive Summary