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1.1.1. Main Forms of Doing Business

Saint Lucia provides several business forms for investors, of which the main forms include:

  • Company (Private Limited Company or Public Limited Company)
  • Partnership
  • International Business Company
  • International Trust; and
  • Foreign Business (Subsidiary or Branch)

Company

Companies can be formed either as Private Limited Companies or as Public Limited Companies. A Private Limited Company can be formed as a company limited by shares or a company limited by guarantee.

The key aspects of a Private Limited Companies include:

  • Shareholders' liability is limited to their contribution in the company;
  • Company limited by guarantee is not permitted to undertake business activities for the purpose of earning profit and is only formed for a charitable purpose or for the benefit of the community;
  • No minimum capital requirement;
  • Minimum 2 shareholders and maximum 50 shareholders, of any nationality, are permitted;
  • Minimum 2 directors (individuals or companies), of any nationality, are required;
  • Shares cannot be offered to the public;
  • Mandatory to include 'Limited' or 'Ltd' in the company name.

The key aspects of a Public Limited Company include:

  • Shareholders' liability is limited to the amount unpaid on their shares in the company;
  • Permitted to offer shares to the public;
  • Minimum 3 directors (individuals) are required, out of which atleast 2 directors cannot be officers or employees of the company or its affiliates;
  • Mandatory to include "Public Limited Company" or "PLC" in the company name.

Partnership

A partnership is formed by an agreement between two or more persons to carry on a trade, profession, or business together under a joint name. The partners are jointly and severally liable for the obligations of the firm. All profits and losses are allocated to the partners for tax purposes.

International Business Company (IBC)

In order to comply with the requirements of the OECD with regard to harmful taxation, the government has introduced amendments to the IBC regime, including that no new IBCs will be registered during the period 1 January 2018 to 31 December 2018. IBCs registered after 1 January 2019 are subject to tax under the new territorial tax regime (see Sec. 5.4.). IBCs registered prior to 1 January 2018 will continue to be governed under the earlier regime until 30 June 2021. However, such IBCs may opt out of being grandfathered and move into the new regime.

An IBC is a company incorporated under the International Business Companies Act in Saint Lucia but operates outside of Saint Lucia region. Effective from 1 January 2019, IBCs will be permitted to do business locally (previously, IBCs were not permitted to do business with residents and could target only non-resident customers). IBCs are now allowed to own immovable property in the country (previously allowed only on lease for its own business operations). However, an IBC is not allowed to conduct banking, trust, insurance, or re-insurance business activities without a specific license. There are numerous other forms of establishing an IBC in Saint Lucia such as holding companies, personal investment companies, import/export companies, professional services company, finance companies, etc.

An IBC is eligible for certain tax benefits (see Sec. 10. below).

The key aspects of an International Business Company include:

  • No minimum capital requirement for formation, however, normally the authorized capital is equivalent of USD 50,000;
  • Minimum 1 shareholder and 1 director, of any nationality, are required;
  • Shareholder and director can be an individual or a company and need not be a resident in the country;
  • Mandatory to have a registered office in Saint Lucia;
  • Effective from 1 January 2019, IBCs are required to:
    • File annual tax returns based on annual unaudited financial statements;
    • Fulfill certain substance requirements based on their core economic activity;
    • Comply with the monitoring requirements as prescribed; and
    • Provide other documents required by the competent authority.

International Trust

In order to comply with the requirements of the OECD with regard to harmful taxation, the International Trust Act has been amended to provide that no new trusts will be registered effective from 1 December 2018. Trusts registered prior to 1 December 2018 will continue to be governed under the earlier regime until 30 June 2021. However, such trusts are not permitted to acquire any new assets or engage in a purpose other than the purpose for which they were established.

The Saint Lucia International Trust Act of 2002 governs the formation, activities, and termination of trusts. The Act protects foreigners from the laws of other countries, creditors, and forced heirships. The trusts offer strong protection of the assets and strict confidentiality laws to protect the privacy with perpetual or 120 years of life span.

Non-residents can form International Trusts in Saint Lucia either as a 'Purpose Trust', i.e., trust for a specific purpose (charitable or non-charitable) or a 'Protective Trust', i.e., for protection of assets. Protective trusts have a maximum lifespan of 120 years. Purpose trusts, i.e., charitable and non-charitable trusts, may be perpetual with an unlimited timespan. Similar to an IBC, international trusts are eligible for certain tax benefits (see Sec. 10.).

Foreign Business (Subsidiary, Branch)

Foreign companies can conduct their operations in Saint Lucia through the constitution of a Subsidiary or Branch Office. A Subsidiary can be formed as a private or public limited company with foreign holdings, subject to certain restrictions. A foreign company can hold 100% holding in a private limited company. However, any company with foreign holding exceeding 49% of shares in any company in Saint Lucia is required to obtain a 'Trade License' in Saint Lucia.

Foreign companies can also conduct business by establishing an 'External Company' in Saint Lucia such as a Branch Office. A Branch Office cannot conduct business in Saint Lucia unless it is registered in the country. An external company is said to carry on business in Saint Lucia if:

  • the business is carried on from a registered office in Saint Lucia, or
  • the company establishes or uses a share transfer or share registration office in Saint Lucia; or
  • the company owns, possesses or uses assets located in Saint Lucia for business purposes in order to derive profits or gains (directly or indirectly) from those assets, whether realised in Saint Lucia or not.

Foreign companies can conduct their operations in Saint Lucia through the constitution of a Subsidiary or Branch Office. A Subsidiary can be formed as a private or public limited company with foreign holdings, subject to certain restrictions. A foreign company can hold 100% holding in a private limited company. However, any company with foreign holding exceeding 49% of shares in any company in Saint Lucia is required to obtain a 'Trade License' in Saint Lucia.

Foreign companies can also conduct business by establishing an 'External Company' in Saint Lucia, such as a Branch Office. A Branch Office cannot conduct business in Saint Lucia unless it is registered in the country. An external company is said to carry on business in Saint Lucia if:

  • the business is carried on from a registered office in Saint Lucia, or
  • the company establishes or uses a share transfer or share registration office in Saint Lucia; or
  • the company owns, possesses or uses assets located in Saint Lucia for business purposes in order to derive profits or gains (directly or indirectly) from those assets, whether realized in Saint Lucia or not.

Further information on the general investment, tax, and regulatory regime about the country is available at the following external references:

  • “Doing Business” report from World Bank – click here
  • Reports and publications from OECD – click here
  • Reports and publications from IMF - click here
  • Taxation overview in Saint Lucia - click here
  • Invest in Saint Lucia - click chere
  • Ministry of Agriculture, Fisheries, Physical Planning, Natural Resources and Co-operatives - click here