Saint Vincent and the Grenadines: Country and Foreign Investment
The state of Saint Vincent and the Grenadines is in the Caribbean, 1,600 miles southeast of Miami and 100 miles from Barbados. Saint Vincent and the Grenadines consists of a group of 18 small islands, of which the biggest is Saint Vincent, with the capital, Kingstown, which has a natural deep-water harbour. Saint Vincent is a lush volcanic island, just 18 miles north to south and 11 miles wide; the climate is tropical.
Fought over for nearly a century by the French and British, sovereignty of Saint Vincent and the Grenadines was settled on the British in 1783. Now Saint Vincent and the Grenadines is an independent parliamentary democracy, with a legal system based on common law. The currency is the Eastern Caribbean Dollar (EC$) which is linked to the US$ at an exchange rate of 2.7 EC$ to 1 US$ (2006), and is managed by the Eastern Caribbean Central Bank with headquarters in St. Kitts.
The population of the islands was estimated in 2012 to be around 103,500, and is static.
The economy moved from dependence on sugar to dependence on bananas; but tourism is now the biggest earner, and the government has been trying hard to build a financial services centre. Economic growth was dented by a combination of climatic problems, 9/11 and the need to rein in a free-wheeling financial services sector to placate the OECD and FATF. The government, which took office in April 2001 and was re-elected in 2005 and 2010, implemented an ambitious framework of policy reforms designed to strengthen the public finances, achieve higher growth, lower unemployment and reduce poverty.
The Offshore Finance Authority (now renamed the International Financial Services Authority) was created by Parliament to institute a new system to manage, direct, control and supervise the offshore financial services industry in Saint Vincent and the Grenadines. After a number of closures in 2001, the sector now seems to be growing in a stable fashion. Key sectors are banking, trusts, insurance and mutual funds. There are estimated to be around 9,000 International Business Companies. A modernized IBC Act was implemented in 2008. Historically, Saint Vincent and the Grenadines has provided a high degree of confidentiality for investors, although an Exchange of Information Act passed in 2002 has qualified this to a certain extent.
Cable and Wireless provides telecommunications services in Saint Vincent and the Grenadines; however the Government has liberalized the telecommunications market and two additional companies have been given licenses for mobile services. Digicel sued Cable & Wireless for allegedly impeding its progress in introducing competing telecoms offerings but lost the claim in the UK High Court in April, 2010.
Following a substantial amount of new legislation, Saint Vincent and the Grenadines was given a clean bill of health by the FATF in June 2003. The FATF Implementation Progress Report on Saint Vincent and the Grenadines was very complimentary about the “substantial” amount of training provided to financial institutions with respect to anti money laundering requirements. The report also had high praise for the Financial Intelligence Unit, saying “cooperation provided by the FIU has been excellent.”
The FIU has been accepted into the Egmont Group. Saint Vincent is a member both of the Organization of Eastern Caribbean States and of the Caribbean Single Market and Economy within CARICOM; but only limited progress has been made towards the creation of a single market in the area.