Grenada
Geography
Grenada
is the largest of a group of Caribbean islands,
north of Trinidad and Tobago. Smaller Grenadines,
also forming part of the jurisdiction, are
Carriacou, Petit Martinique, Rhonde Island,
Caille Island, Diamond Island, Large Island,
Saline Island and Frigate Island.
Grenada
is volcanic in origin, with central mountains;
the highest point is Mount Saint Catherine,
840 m. There are extensive, sandy beaches,
and many reefs.
Most
of the population lives on Grenada itself,
with major towns including the capital St.
George's, Grenville and Gouyave. The largest
settlement on the other islands is Hillsborough
on Carriacou.
The
climate is tropical, tempered by northeast
trade winds. Grenada is on the southern edge
of the hurricane belt, but the occasional
hurricanes can be devastating. After Hurricane
Janet in 1955, with winds of 115 mph, came
Hurricane Ivan in 2004 and Hurricane Emily
in 2005, both of which caused serious damage.
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Grenada History, Population, Language and Culture
Christopher Columbus sailed past Grenada in
1498, but the native Carib Indians successfully
repelled Spanish, French and English colonizers.
A French colony was established in the 17th
century, but eventually the island was ceded
to the British under the Treaty of Versailles
in 1783.
The
British imported African slaves and established
sugar plantations, which were staffed by indentured
Indian immigrants after the abolition of slavery.
In
1877 Grenada became a Crown Colony, and in 1967
it became an associate state within the British
Commonwealth before gaining independence in
1974.
Despite
its British history, the island retains many
French cultural influences.
The
population of just under 90,000 (July 2007 est.)
is around 82% black, 13% mixed black and European,
and 5% European and East Indian. Religious denominations
are: Roman Catholic 53%, Anglican 13.8%, other
Protestant 33.2%.
English
is the official language; a French patois is
also spoken.
In
1979, an attempt was made to set up a socialist/communist
state in Grenada. Four years later, at the request
of the Governor General, the United States,
Jamaica, and the Eastern Caribbean States intervened
militarily to restore democracy.
Launching
their now famous "rescue mission,"
the allied forces restored order, and in December
of 1984 a general election re-established democratic
government.
The
tourist industry has developed rapidly; but
the island has taken care to preserve its beautiful
scenery, including some rain forest and its
coral reefs.
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Grenada
Government
Grenada
has a constitutional monarchy with a Westminster-style
parliament. The Queen is the Head of State,
represented by a governor-general.
Following
legislative elections, the leader of the majority
party or the leader of the majority coalition
is usually appointed prime minister by the governor
general. The bi-cameral Parliament consists
of the Senate (a 13-member body, 10 appointed
by the government and three by the leader of
the opposition) and the House of Representatives
(15 seats; members are elected by popular vote
to serve five-year terms).
The
administration of the islands of the Grenadines
group is divided between Saint Vincent and the
Grenadines and Grenada.
Elections
were last held on 27 November 2003, and are
next set to take place in 2008.
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Grenada Economy and Currency
Grenada
is sometimes known as the 'spice island'; cinnamon,
cloves, ginger, mace, and especially nutmeg
(represented on the national flag) are important
exports.
Grenada
now relies on tourism as its main source of
foreign exchange, especially since the construction
of an international airport in 1985. The development
of an offshore financial industry has also contributed
to growth in national output.
Economic
progress was satisfactory until the setback
of the 2004/2005 hurricanes. The category 4
Hurricane Ivan damaged or destroyed 90% of homes.
Grenada
is recovering with remarkable speed, due to
the climate, energetic domestic efforts and
substantial international assistance.
Major
short-term concerns are the rising fiscal deficit
and the deterioration in the external account
balance. Grenada shares a common central bank
and a common currency (the East Caribbean Dollar)
with seven other members of the Organisation
of Eastern Caribbean States (OECS).
Minister
of Finance Anthony Boatswain's 2005 budget included
a 50% reduction in the tax payable on residential
properties and a controversial levy on payrolls
in order to establish a Grenada Reconstruction
and Development Fund.
Presenting
his budget for 2007 in December 2006, Boatswain
predicted a 10% increase in revenues and a 6%
fiscal surplus as a result of strengthened revenue
collection techniques.
According
to the International Monetary Fund (IMF), real
GDP growth averaged 7% per year during 2005-06,
and is projected at about 3% in 2007, and 4%
beyond, reflecting a further strengthening of
tourism, the recent initiation of several major
tourism projects, and a gradual recovery of
agriculture. Inflation has remained low, buttressed
by the regional currency board arrangement.
However,
the IMF also noted in a report on the Grenadian
economy in October 2007 that other structural
reforms have suffered delays, including legislative
action to reform the tax concessions regime,
creating a one-stop shop for investors, strengthening
the capacity to evaluate and prioritize capital
projects, and modernizing the public sector.
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Grenada Entry and Residence
In most cases, visas are not required for travel
to Grenada; entry permits are usually valid
for 3 months.
Non-Grenadians
wishing to work in Grenada must first obtain
a work permit from the Ministry of Labour, St.
George's, Grenada. The annual cost at the time
of writing is USD188 for CARICOM nationals,
USD562 for Commonwealth and United States nationals,
and USD750 for others.
Non-Grenadians
wishing to purchase land in Grenada are required
to apply to the Government for an Aliens Land
Holding Permit. Alien Landholding Licenses cost
10% of the value of the land.
An
applicant for permanent residence must have
been living on the island for a period of at
least 5 years. Documents required will include
a birth certificate, police record, current
bank statement, doctors certificate and about
6 passport photos, plus a letter of recommendation.
A
tax of around (USD20) is levied per person for
visits over 24 hours, applicable to persons
12 years and over. For children aged 5 to 12
years, the tax is USD10. Children under 5 are
exempt. The tax is payable at the airport upon
departure from Grenada.
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Grenada Business Enviroment
Grenada
has approximate 700 miles (1,127 km) of roads,
many of which have been newly resurfaced or
rebuilt.
The
country's major seaport is St. George's, the
capital, where the sheltered natural harbour
features an 800 foot pier with berth space for
two to three vessels at a minimum depth of 30
feet. A general ports development, completed
in 1985, provides a 250 foot schooner berth
with 18 feet depth, a container park and other
operational improvements. The port has 27,500
square feet of transit shed space and supporting
warehouse and bond storage facility with the
aim of separating cruise ship and cargo activities.
Grenada
has two airports, a 1,300 foot airstrip in Carriacou,
and the 9,000 foot International Airport at
Point Salines capable of servicing the largest
aircraft in the world. There is a departure
tax per person payable at the airport upon leaving
Grenada.
Power
is supplied by the Grenada Electricity Services
Ltd. (GRENTEL) from diesels. Upgrading of the
system is continuous. The non-industrial current
is 220 volts, single phase, 50 cycles. For industrial
use, 410 volts, three phase, 50 cycle power
is available.
The
National Telecommunications Regulatory Commission
of Grenada was established pursuant to the Eastern
Caribbean Telecommunications Authority (ECTEL),
ECTEL Treaty (Act 30 of 2000) and the Telecommunications
Act (Act 31 of 2000) to regulate the newly liberalized
telecommunications market in Grenada, Carriacou
and Petit Martinique.
The
country's water is supplied by the National
Water and Sewage Authority (NAWASCO) from a
series of catchments, rivers and deep wells.
The water is clean and safe to drink.
All companies/businesses operating in Grenada
must register with the National Insurance Scheme
and pay 4% (at the time of writing) of an employee's
salary/wage plus a matched 4% from the employer.
Businesses must also be registered with the
Department of Inland Revenue with respect to
the payment of General Consumption Tax (GCT)
on the sale of goods and services as follows:
-
10% on goods produced by local manufacturers;
-
10% on the service of overseas calls;
- 8%
on food and beverages served in hotels and
guest houses;
- 5%
on all other services.
In
January 2007, the government published a White
Paper proposing the introduction of a Value
Added Tax. It stated that it was committed
to the introduction of VAT (which would replace
the GCT) by January 2008.
According
to the government, rates of VAT would be:
VAT
also replaced the Airport Departure Tax and
the Motor Vehicle Purchase Tax (levied at
rates of up to 15%).
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Grenada Foreign Investment
Grenada welcomes all investments into the economy
which it believes would have the positive effects
of increasing domestic income, employment, foreign
exchange earnings or savings, and transferring
appropriate technology and know-how to the local
economy.
Some
of the best prospects for new investments have
been identified in tourism, information services,
banking and insurance, and transportation.
The
Government will not grant permission to non-nationals
to invest in various activities including the
retail and distribution trade, taxi and self-drive
services, resturants and catering, night clubs
and services such as hair-dressing, laundry
and dry cleaning, movie houses, travel agencies,
real estate agencies, and certain types of domestic
manufacturing.
Where an operation to be established through
foreign investment will be based mainly on the
processing or assembly of foreign materials
or components which are produced and paid for
outside of Grenada, the Government will more
easily approve 100% non-resident ownership but
still welcomes and encourages opportunities
for equity participation by residents.
Generally,
there are no restrictions on remittances of
capital, earnings on, and liquidation proceeds
from direct non-resident investment in Grenada.
Profits or dividends arising in connection with
a non-resident investment duly registered with
the Ministry of Finance will be approved for
remittance.
The
Government of Grenada has offered a wide range
of incentives to potential investors. These
include:
Under
the Hotels Aid Act CAP 139 of 1935:
-
Duty free importation of article of hotel
equipment and building material meant exclusively
for the construction and operation of the
hotel.
- Drawback
of custom duties on articles of hotel equipment
and building materials purchased in Grenada
for the hotel.
- Complete
or partial exemption from payment of tax
on income arising from the operation of
the hotel.
Under the Fiscal Incentives Act No.41 of 1974
(for manufacturing operations):
-
Waiver of duties and taxes on the importation
of plant, machinery, equipment, spare parts,
raw materials and vehicles;
- Tax
holidays periods as follows: up to 15 years,
where the local value added is at least
50%, or for an 'Enclave Enterprise' producing
exclusively for export to countries outside
the CARICOM region; up to 12 years, where
the local value added is not less than 25%;
up to 10 years, where the local value added
is not less than 10%.
Note:
The Tax Holiday guarantees the waiver of payment
of any tax on income, and duties on material,
equipment, spare parts and components to be
used in manufacturing during the period specified.
In
its 2006 budget, the Grenada government announced
that:
"As
part of the measures to improve the investment
climate, Government will also undertake the
following tax reform measures:
i.
Effective January 1st, 2006, Government will
not grant any new tax holidays or renew existing
ones. Instead, Incentives will be provided in
the form of tax write-offs for investments,
and after June 1st, 2006, through accelerated
depreciation with loss carry forward. To this
end the Income Tax Act will be amended by April
2006.
ii.
By May 31st, 2006, Government will repeal the
Investment Code Incentives Act, and the Qualified
Enterprise Act, which in fact will become unnecessary,
once the new incentives regime for Income Tax
is in place."
Following
the changes, concessions are available under
the Investment Act, Income Tax Act and Common
External Tariff. Businesses involved in a broad
range of services and manufacturing activities,
as well as tourism and agriculture, can qualify
for the incentives, which include:
