Grenada

Grenada has one of the most pristine physical environments in the Caribbean and offers investors, tourists, migrant workers and overseas students a high quality of life, low crime, and a relatively un-spoilt natural environment. The country has significantly fewer prisoners per capita than the United States and a range of countries in the Caribbean region. Energy consumption per capita and carbon emissions is relatively low and life expectancy is approximately 68.2 years.

The physical beauty of the country is complemented by its rich history, and vibrant living cultural heritage. The island’s easy rhythms and friendly openness of its residents evoke an atmosphere that has long since vanished elsewhere. Residents are famous for their friendly and hospitable nature.

 

Grenada’s basic infrastructure to support investment – sea and land transportation, electricity generation, telecommunications, and water – is quite well developed and is regarded as good and supportive of competitiveness by investors.

 

Trade & Investment Opportunities

Grenada is one of the most open economies in the world. The regulatory environment that governs trade and investment is relatively free. The country’s economic structure is highly diversified, based on the contribution of agriculture, manufacturing, tourism, construction, communications, transportation and government.

The manufacturing sector has grown significantly in recent years largely due to Government encouragement in the form of attractive incentives. In 2009 manufacturing exports equaled EC$36,535.6.Exports are dominated by flour, wheat bran, clothing, paper products, animal feed, roofing sheets, paint and varnishes and nutmeg products. The main export destination for goods from Grenada is the United States, followed by OECS countries and the Netherlands. Given the small size of the local economy, companies need to export from an early stage of their development and a wide range of goods and services have to be imported.

The tourism and hospitality sector is the fastest growing sectors in the Grenadian economy, measuring a 35.2 percentage of GDP). Grenada currently has 1.7 percent of the cruise passenger ship markets and 1.9 percent of the stay-over market. Due to a lack of tourism product and new attractions, visitor expenditure is lower than many other destinations in the Caribbean. Grenada welcomes investments in these areas.

Grenada has become increasingly active in the area of international services. Overseas education, offshore financial services and ICT related business services offer great potential for development and growth. The government also welcomes proposals that could further develop hydro and geothermal energy resources that could reduce dependence on imported fuel.

Public and private sector investment in the economy is relatively high. Sustained public sector investment over the years has enhanced physical infrastructure (e.g., airport, roads, educational facilities, etc.) and provides a good base for productive capacity to expand in the coming years. Some of this investment has been required to recover from recent natural disasters, but it has left Grenada with a very modern economic and social infrastructure.

FDI stock relative to the size of the economy is relatively high (195 percent of GDP). Foreign direct investment accounted for 60 percent of gross fixed capital formation in Grenada in 2007. FDI inflow increased from EC$262.9 million in 2007 to EC$340.9 million in 2008. Overseas investment has been predominately in the tourism sector (e.g. hotels) and the provision of infrastructure (e.g. mobile telecommunications). At present, there are several hotel developments planned or in the early stages of construction, though delays are being experienced due to the international recession.

The country has made significant progress in re-orientating its economy from agriculture towards a broad services based economy. While agriculture and manufacturing still plays a key role in the economy, services sector activities as a percentage of GDP and exports have grown rapidly in the past decade. Service activities now accounts for some 70% of GDP in Grenada

The country’s relative underdevelopment offers a wide range of opportunities that are not available in competitor countries. A vast range of sites is still available for the development of hotels and tourist facilities. In addition, Grenada can provide one of the most diversified tourism offerings in the Caribbean with its untapped natural resources: rain forests, crater lakes, waterfalls, white sand beaches, exotic underwater life, diversified flora and fauna.

 

Investment opportunities in Grenada are directly related to the country’s resource endowment of sand, sun and sea. Grenada’ s natural resource base includes white sand beaches, natural bays, exotic reefs, historic dive sites, waterfalls, volcanic lakes and ponds, rainforest, tropical flora and fauna, mangrove forest and rich fertile soil.

Incentives for Investment

 

Entitlement
The following categories of business enterprises are granted investment incentives:

  • Business enterprises carrying out a priority investment project
  • Business enterprises operating within priority industries/sectors
  • Business enterprises located within a priority geographic areas of the country

Priority Investment projects are projects which are in excess of EC$500,000 or employing in excess of 20 Grenadians and contributes the following to the Grenadian economy:

  • Increase foreign exchange, either through exports or import substitution
  • Technology transfer/acquisition
  • Reduce dependence on imported energy
  • Enhance skills development and skill-based employment
  • The sustainable use of domestic raw materials, supplies and services
  • Incremental economic diversification with significant value-added
  • Linkages between emerging & traditional economic sectors

Priority Industries/Sectors are industries or sectors which Government considers will make substantial contribution to the socio-economic development of Grenada. These are:

  • Tourism
  • Manufacturing
  • Agriculture, & Agri-business
  • Information Communication Technology (ICT)
  • Financial Services
  • Education & Training
  • Health & Wellness
  • Creative
  • Energy
  • Research and Development

Priority Investment Areas are geographic areas of the country which the government deems necessary to encourage investment. Government is in process of defining these areas.

Benefits

Fiscal incentives granted to qualifying business enterprises are follows:

 

  • Exemption from customs duties on plant, equipment and raw materials.

Non Fiscal Incentives are as follows:

  • No restrictions on foreign ownership
  • No restrictions on foreign currency transactions
  • No restrictions on the repatriation of profits, capital and dividends
  • Double Taxation Relief

Requirements

  • Completed application form
  • Business Plan
  • Certificate of good character (police record from home country)
  • A registered business name (A Business Name Certificate or Certificate of Incorporation, Articles of Incorporation, Notice of Directors and Notice of address)
  • Tax identification number (tax registration certificate)
  • A social security number (NIS registration certificate)
  • Tax/NIS compliance certificates(if already in operation)
  • Evidence of project funds (letter from funding bank stating loan purpose, funds approved, terms/draw down schedule or verification of equity capital)
  • Evidence of property ownership in the form of conveyance or lease
  • Outline (preliminary) Planning Permission

Information to be provided in the investment application form is as follows:

  • The name and address of the proposed business enterprise and its legal form
  • The proposed location where the activity is to be carried on
  • Profile of the project promoter(s); (including the name and address of each director or partner, the name, address, nationality and shareholding of each shareholder, the qualification, experience and other relevant particulars of the project management
  • The nature of the proposed business activity
  • The level of planned capital investment;
  • The estimated number of persons to be employed and categories of jobs to be created;
  • The nature and volume of waste which shall be generated by the enterprise’s operations, and the proposed methods, of its management;
  • The nature of support and facilitation which the investor is seeking from GIDC

Information to be provided in the business plan is as follows:

  • Executive summary of the project
  • The project background;
  • Market study or market analysis;
  • Investment plan over five year period;
  • The level of loan and equity financing;
  • Projected statement of income and expenditure 3yearrs;
  • Projected balance sheet ( 3 years)
  • Projected statement of cash flows (3 years)
  • Payback period, NPV and IRR
  • Loan amortization schedule for the bank loan (if any);
  • Project implementation plan/ schedule)
  • Notes on assumption made in the business plan.