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Grenada: Country and Foreign Investment

Executive Summary

Grenada is the largest of a group of Caribbean islands, north of Trinidad and Tobago. It is volcanic in origin, with central mountains; there are extensive, sandy beaches, and many reefs. 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.

A French colony was established on Grenada 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. The island gained independence in 1974.

Despite its British history, the island retains many French cultural influences. The population of 109,590 (est July 2013) has English as its official language. Grenada has a constitutional monarchy with a Westminster-style parliament. The Queen is the Head of State, represented by a governor-general.

Although the island is famous for its nutmegs, Grenada now relies on tourism as its main source of foreign exchange; the development of an offshore financial industry has also contributed to growth in national output. The island has recovered well from the hurricanes of 2005. The currency is the East Caribbean dollar.

Foreign investment is welcomed, but there are some restricted sectors of the economy. Domestic companies are taxed on their profits, but the offshore sector is largely free of taxation; and investors once accepted are given good fiscal incentive packages. The offshore sector offers International Business Companies, Banking, Insurance and Gaming regimes.

 

 

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