St. Vincent Company Formation

A St. Vincent & the Grenadines Offshore Company is a tax free vehicle for undertaking a wide range of business and investment opportunities under the jurisdiction of St. Vincent and the Grenadines, characterised by robust asset protection and some of the strongest global confidentiality laws.

St. Vincent and the Grenadines holds an international reputation in the offshore market, built on the back of its introduction of the Preservation of Confidential Relationships (International Finance) Act 1996. It is widely considered to be one of the most restrictive confidentiality laws globally, and is one of only three financial privacy laws in operation around the world. While the IBs is the most popular vehicle, coming in at a close second is the St Vincent LLC.

It is the only law of its kind found in an independent sovereign nation. For more information on the advantages of offshore corporations or the unique benefits of St. Vincent as an Offshore Financial Center, click here.

Company Formation Update

***As of Jan 2019 St Vincent has agreed with Cooperation with the EU under the International Business Companies (Amendment and Consolidation) (Amendment) Act No. 36 of 2018 have agreed to the following changes in the administration and formation of offshore companies in St Vincent.

• Required change of names from International Business Companies (IBC) to Business Companies (BC)
• Directors and Shareholders or required to submit accounting documents
• Annual returns must be submitted for large companies
• Taxation is territorial based
• No longer are bearer shares allowed
• 30% taxation on BC on locally generated funds with 0% on foreign-sourced
• Company Formation is open to local persons

Advantages of a St. Vincent & the Grenadines Company Formation

• A St. Vincent and Grenadines IBC is not liable to any taxation (although it does offer the option of payment of 1% tax on all profits where investors domestic law requires evidence of tax distribution)
• Strong asset protection structure of personal wealth and assets, with exemption from capital gains tax, income tax, withholding tax, corporate tax or taxes on all incomes and assets for 25 years from the date of registration
• St. Vincent and the Grenadines has a general confidentiality law that protects against the disclosure of any confidential information worldwide
• SVG has no double taxation treaty with any country, ensuring that all information on trading activity will not be passed to a Revenue Authority anywhere
• Exemption from stamp duty on any share or property transactions for 25 years from the date of registration
• Some of the lowest incorporation and annual fees globally

Understanding Offshore Company Formation

Offshore company formation in St. Vincent involves establishing a business entity in the jurisdiction mainly for financial privacy, tax planning, and asset protection. Here, International Business Companies (IBC) are typically utilized due to their benefits and simplicity in setup.

Defining Offshore and IBC

An offshore company refers to a corporation or LLC established in a jurisdiction outside of the company owner's country of residence, primarily for legal, tax, or regulatory advantages. In St. Vincent, an International Business Company (IBC) is a common form of offshore entity designed for engaging in international trade, investment activities, and wealth management. IBCs in St. Vincent benefit from the robust privacy policies and favorable legal framework that the jurisdiction offers.

Advantages of an Offshore Company in St. Vincent

The formation of an offshore company in St. Vincent presents numerous advantages. One of the most significant benefits is tax planning; IBCs enjoy a tax-exempt status on income generated outside of the country.

Additionally, St. Vincent offers a high level of asset protection, ensuring that assets held by the offshore company are safeguarded from external risks, such as litigation or creditors in the owner's home country.

The combination of tax efficiency, confidentiality, and financial security makes St. Vincent an attractive location for offshore company formation.

Legal Framework and Compliance

Setting up a company in St. Vincent and the Grenadines involves understanding the corporate law and ensuring compliance with the regulations established by the Financial Services Authority (FSA). It's imperative for one to adhere to the legal requirements and maintain good standing to successfully operate their business.

The St. Vincent Corporate Law

St. Vincent and the Grenadines' legal system is based on the Companies Act, which governs the formation and operation of Business Companies (BCs). BCs are required to have a legal address within the jurisdiction. Corporate tax obligations are clearly outlined, with the advantage of St. Vincent and the Grenadines not imposing global income tax on BCs, making it an attractive option for international business.

Entities considering incorporation must engage with licensed local agents such as lawyers or attorneys-in-fact, who facilitate the registration and provide guidance on compliance. These professionals play a crucial role in ensuring that all legal procedures are followed correctly.

Compliance and FSA Regulations

To operate a company in St. Vincent and the Grenadines, compliance with FSA regulations is mandatory. The FSA acts as the regulatory authority overseeing financial services and implements stringent measures to ensure transparency and accountability.

• Incorporation Documents: To initiate the incorporation process, entities must submit the Articles of Incorporation, Notice of Directors and Members to the FSA through a registered agent.
• Ongoing Requirements: Compliance includes annual filings, maintaining up-to-date records, and notifying the FSA of any significant changes concerning the company's structure or operations.
• Audits and Reporting: Companies need to comply with periodic audits and submit reports as required by the FSA to prove their financial soundness and adhere to anti-money laundering laws.

Incorporation Process

The incorporation process in St. Vincent involves a systematic approach to company formation, starting with selecting an appropriate company name and preparing the necessary incorporation documents. By adhering to these steps, one can effectively establish a legal entity in this jurisdiction.

Choosing a Company Name

The first step in the incorporation process is to select a unique name for the company that complies with local regulations. The chosen name should not be similar to existing entities within the registry to avoid confusion. This name must then be reserved and approved by the relevant authority before the applicant can proceed to the next step.

1. Search: Conduct a name search at the Registry to ensure the desired name is not already in use.
2. Reserve: Once a unique name is found, reserve it to prevent other entities from registering the same name.

Preparing the Incorporation Documents

Upon successful name reservation, the applicant must compile and submit a set of documents to the Registry. These documents include the application form and corporate documents such as the Articles of Association.

1. Application Form: Complete the required form with details about the company structure and its intended activities.
2. Articles of Association: Draft this pivotal document, which outlines the company's rules and regulations.
3. Document Submission: Submit the application along with the Articles of Association to the Registry for approval.

After submission, the Registry will review the application. Upon approval, the Registry will issue a certificate of incorporation, officially recognizing the legal existence of the company.

Setting Up Business Operations

When establishing a business in St. Vincent, one must focus on setting up a registered office and devising a comprehensive business plan that includes an accounting system. These initial steps are critical to ensuring legal compliance and strategic financial management.

Establishing a Registered Office

In St. Vincent, having a registered office is compulsory. This location serves as the official address for the company and must be maintained within the country.

• Location: Must be situated in St. Vincent.
• Agent: A local registered agent is required to facilitate the establishment of the registered office.
• Documents: All official correspondences and legal notices will be received at this address.

Creating a Business Plan and Accounting System

A robust business plan outlines the company's strategic approach, while an accounting system is essential for tracking financial transactions and preparing financial statements.

• Business Plan: Should detail objectives, market analysis, and strategies.
  • Confidentiality: Often, a non-disclosure agreement (NDA) is advisable when sharing the business plan with potential partners or investors.
• Accounting System:
  • Record-Keeping: Should be capable of managing daily transactions and generating reports.
  • Financial Statements: It is important to maintain accurate records to produce annual financial statements.
  • Compliance: The system must adhere to the local regulatory requirements for accounting and financial reporting.

Licenses and Permits

Prior to commencing operations, businesses in St. Vincent must obtain the relevant licenses and permits. These vary based on the industry and nature of operations, particularly for entities engaged in banking, insurance, or other financial services.

Industry-Specific Licenses

Companies operating within regulated sectors, such as banking, insurance, and financial services, must secure appropriate licenses from regulatory bodies. For instance:

• Banking: Entities must apply for a banking license from the Financial Services Authority (FSA) in St. Vincent.
• Insurance: Companies offering insurance services are required to obtain a license from the relevant insurance authority.
• Financial Services: Firms providing other financial services must adhere to the regulations set forth by the FSA and acquire specific licenses to operate legally.

Applying for these licenses involves submission of detailed documentation and adherence to strict legal and capital requirements.

Special Permits for Offshore Operations

Offshore companies, particularly those in the financial sector, must acquire special permits to operate. These permits not only ensure compliance with international standards but also serve to:

• Protect client confidentiality: Offshore operations often prioritize privacy, which is governed by specific regulatory measures.
• Define operational scope: Special permits delineate the types of activities an offshore company can engage in within St. Vincent.

Obtaining these permits is a critical step for offshore entities, especially those involved with overseas banking or insurance services. It is vital that companies seek guidance from experts in St. Vincent law to ensure all requirements are accurately met.

Banking and Finance

Setting up corporate banking and understanding the tax implications are crucial steps in establishing a business in St. Vincent. These processes ensure financial stability and compliance with local regulations.

Opening Corporate Bank Accounts

To open a corporate bank account in St. Vincent and the Grenadines, company directors and shareholders are required to submit specific documentation. These typically include:

• Passport copies for each director and shareholder
• A recent utility bill for address verification
• Signed agreement by the directors
• Resolution appointing the directors
• Share certificates
• Details of the company’s authorised capital

Upon providing these documents and after due diligence checks, banks will set up the account, offering services like eBanking and credit cards. Companies benefit from strong client confidentiality protections that the jurisdiction is known for.

Understanding Tax Implications

Taxation in St. Vincent is designed to be advantageous for businesses, with several key benefits:

• Corporate Tax Rate: A competitive rate is imposed on resident companies on their worldwide income.
• Tax Exemption: International businesses may enjoy tax exempt status, not being liable to local taxes including income, capital gains, and withholding tax.
• Capital Gains Tax: Typically, there are no capital gains taxes levied.
• Income Tax: Non-resident companies benefit from the absence of personal income tax on foreign-derived income.
• Withholding Tax: Often, no withholding tax is imposed on dividends, interest, and royalties paid to non-residents.

Businesses should note, however, that while St. Vincent offers a tax-friendly environment, they must also consider reporting obligations in their home countries. Currency control regulations are generally lax, but due diligence on these is advisable to ensure full compliance.

Protecting Privacy and Assets

St. Vincent offers robust mechanisms to safeguard the confidentiality of businesses and their owners, making it an attractive jurisdiction for asset protection.

Confidentiality and Secrecy Laws

St. Vincent and the Grenadines uphold stringent confidentiality laws to protect the privacy of companies and their owners. Information about company directors and shareholders is not part of the public record. This provides a layer of anonymity and asset protection since it can be challenging to establish ownership of a company to a specific individual. Additionally, businesses benefit from laws that restrict the disclosure of financial and corporate activities to third parties without consent.

Utilizing Nominee Services

Nominee director and shareholder services are common in St. Vincent to further enhance privacy. Here's how they function:

• Nominee Director: A legally appointed third party acts as the director on the public record, thereby shielding the identity of the actual person managing the company.

• Nominee Shareholder: Third-party nominees are listed as the legal owners of the shares, which preserves the actual owner's confidentiality.

Utilizing these services ensures that the business owners can operate discretely while still complying with legal requirements. Bearer shares are another instrument that can be used to enhance privacy, although their issuance should be cautiously managed to comply with international transparency standards.

Ongoing Management and Maintenance

The sustainable operation of a company in St. Vincent and the Grenadines hinges on meticulous management processes and strict adherence to regulatory obligations. Year-round vigilance ensures that both statutory compliance and internal governance are maintained to the highest standard.

Holding Annual Meetings

Director and shareholder engagement is critical, with required annual meetings serving as a cornerstone for corporate governance. Companies must:

• Schedule and hold at least one annual general meeting of shareholders.
• Ensure that directors actively participate in these meetings to review and steer company affairs.
• Keep detailed minutes of these meetings which include decisions and policies enacted.

Annual meetings also provide an opportunity to update by-laws and review accounting records, ensuring that all actions align with both company objectives and legal requirements.

Fulfilling Local and International Reporting Requirements

Compliance with local and international reporting is non-negotiable for companies in St. Vincent and the Grenadines. Entities should:

• File tax returns in a timely manner, abiding by the local tax regulations.
• Maintain accurate accounting records for both internal review and external accountability.
• Adhere to stipulated deadlines for the filing of by-laws and any changes made to them.
• Ensure communication with shareholders is clear, particularly regarding significant changes or decisions affecting the company's trajectory.

Routine and thorough maintenance of these records assists companies in demonstrating compliance and can simplify the process of responding to any legal inquiries or audits.

Top Uses

• Trading and investing internationally
• Holding the ownership of intellectual property, licensing and franchising
• Protecting assets, tax-free and discreetly
• Buying and selling goods and services
• Holding bank accounts and operating businesses
• Owning of intellectual property, franchising and licensing
• Operating internet businesses (business websites)

Company Requirements

The mandatory-filed articles for incorporation in St. Vincent have been structured as such to record the minimum amount of information required. The only information held on public record is a certificate of compliance, from either the Registered Agent or a Solicitor, confirming that all requirements of the International Business Company Act that governs all IBCs have been complied with.

Two different types of Incorporation Certificates are available: the first with the Director’s name clearly displayed and the other without. There is no need under St. Vincent and the Grenadines law to submit a list of shareholders and the beneficial owners of shares are also fully protected by the Preservation of Confidential Relationships (International Finance) Act 1996, with their details always remaining private.

IBCs can be formed with one director and directors may also be a corporate entity. There are no domicile requirements, or requirements for a local director to be appointed. Likewise, there are no requirements in regards to maintaining share registers, company books or annual shareholder meetings or minutes within St. Vincent itself. There is no requirement to submit annual returns to the St. Vincent and Grenadines registry. Any wish to change the name of the company, or make amendments to the existing name of the company, can be done through amending the original Articles of Incorporation.

The IBC Act freely allows St. Vincent IBCs to merge with subsidiaries, consolidation with foreign companies and a range of other mergers and consolidations. An IBC may also issue management mandates and powers of attorney, in writing, to any person.

To incorporate, the following documents must all be submitted to the St. Vincent and the Grenadines registry:

• Name of the company and the Director(s) of the company
• Names of the officers of the company
• Number of shares to be issued
• Names of shareholder(s) and number of shares to be issued
• Par value of shares (usually listed as US$1 per share)
• The currency (or currencies) in which shares will be issued
• Authorised capital

If the company has more than one shareholder, two Directors are required for St. Vincent Company Formation. This information must also be submitted.

Incorporation for the first year of registration includes certificates of incorporation, exemption from Direct Taxes and Import Duties, Shares and the Resolution of the Director(s).

Corporate Details

Anonymity, Confidentiality & Disclosure

There is no requirement to disclose the names of any beneficial owners, officers, managers or directors of the company to the registry. The anonymity and confidentiality of all clients is protected under the Preservation of Confidential Relationships (International Finance) Act 1996.

Disclosure of confidential information is only permissible in the event that foreign criminal proceedings have been undertaken against a named director, manager or officer in another state. The proceedings must be criminal in accordance with both the prosecuting state and of St. Vincent and the Grenadines before any confidential information is considered permissible for release.

Disclosure is not permitted in relation to any proceedings that are directly related to the breach of the revenue and tax laws of the prosecuting state.

Company Shares

St. Vincent IBCs are permitted to issue bearer shares, registered shares and shares with privileges, qualification rights, limitations and restrictions. They can be issued in one or more currencies without restriction.

Required Capital

There is no minimum capital requirement.

Financial Statements Required

There are no requirements to file mandatory financial statements with a St. Vincent and the Grenadines IBC. There are no publicly accessible accounts.

Directors

A St. Vincent IBC may only have one director. Corporate Directors are permitted and arrangements are in place for nominee shareholders and directors. All filed personal information regarding directors and stakeholders is fully confidential.

Company Secretary

No company secretary is required.

Shareholders

A St. Vincent IBC may only have one shareholder. No public disclosure of shareholders is required.

Trading Restrictions

A St. Vincent and the Grenadines IBC cannot undertake any form of business with residents of the islands. For specific activities that require a licence – industries such as Mutual Funds business, International Insurance business and International Banking Business – an IBC cannot trade without a licence having been granted from the relevant authorities. An IBC may own land in St. Vincent and the Grenadines, but only after obtaining an Alien Land Holding Licence.

Powers of the Company

Companies incorporated in St. Vincent and the Grenadines hold equal power as that of a natural person.

Language of Corporate Documents and Legislation

Company documents can be filed in any language, with no certified English translation required. All legislative and corporate documents in St. Vincent and the Grenadines are written in English.

Registered Office Required

The IBC must have a registered agent who maintains a register in St. Vincent and the Grenadines.

Local Presence

No local presence on the islands is required. Shareholders, officers and directors may reside anywhere in the world.

Management and Annual Meeting (AM) of Shareholders

All meetings and annual meetings can take place globally. There are no requirements to meet physically or submit minutes.

Shelf Companies Available

No.

Time Required to Form Offshore Company

An offshore company can be formed within 48 hours in St. Vincent and the Grenadines.

Name Restrictions

No company may be formed that is the same as an existing company, or bears a name that has a likeness to an existing company. Names may not be used that imply support or formal backing from the President or Government of St. Vincent and the Grenadines.

Language of Name

Names can be submitted in any language. A certificate of translation into English is required.

Names of Company Requiring a Special Licence or Permission

Companies with names that imply activity associated with trades that require formal licensing will need to seek a special licence or permission from the relevant authorities and/or governing bodies.

Company names that incorporate the following terms, or variations of such terms, will require special permission or an adequate licence to cover their business operations: Assurance, Bank, Building Society, Chartered, Chamber of Commerce, Cooperative, Government, Imperial, Insurance, Municipal, Royal, State or Trust.

If, in the opinion of registrar, the name of a company implies the support or backing of the President or Government of St. Vincent and the Grenadines, it will need to be investigated.

Permitted Limited Liability Suffixes

The name must end with Inc., Incorporated, Corp, Ltd, Limited, Corporation, SA or any other suffix that clearly denotes limited liability. Equivalent foreign designations such as Société Anonyme, Société Anonyme à Responsabilité Limitée, Sociedad Anónima, Berhad, Aktiengesellschaft Proprietary, Naamloze Vennootschap or Besloten Vennootschap are permitted.

Annual Government Fee

The fee for registering an IBC in St. Vincent is US$125. Each year thereafter, IBCs must pay $100 to maintain the IBC in good standing. Additional fees apply for particular uses of an IBC requiring special licenses.

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