LOW TAX COUNTRIES
Andorra
Anguilla
Antigua & Barbuda
Aruba
Australia
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Dominican Republic
Gibraltar
Hong Kong
Isle of Man
Jersey & Guernsey
Liechtenstein
Luxembourg
Malta
Mauritius
Panama
Singapore
St.kitts & Nevis
Switzerland
Turks & Caicos
Vanuatu
Index of Articles
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ANTIGUA AND BARBUDA
About Antigua and Barbuda
Pre-ceramic Amerindians were the first to inhabit the islands of Antigua and Barbuda in 2400 BC. Later Arawak and Carib Amerindian tribes populated the islands.
The island of Antigua was originally named Wadadli by the natives. Christopher Columbus landed on his second voyage in 1493 and gave the island the name Antigua. Early settlements by the Spanish and French were succeeded by the English who formed a colony in 1667 by transporting Irish Catholic slaves to Antigua. Slavery, established to run the sugar plantations on Antigua, was abolished in 1834.
The islands became an independent state within the Commonwealth of Nations on 1 November 1981, and Vere Bird became the first prime minister.
Politics of Antigua and Barbuda takes place in a framework of a federal parliamentary representative democratic monarchy, whereby the Prime Minister is the head of government, and of a pluriform multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the two chambers of the Parliament.
The Bicameral Parliament consists of the Senate (17-member body appointed by the governor general) and the House of Representatives (17 seats; members are elected by proportional representation to serve five-year terms).
The Head of State is the Queen, who is represented by the Governor-General. A Council of Ministers is appointed by the governor general on the advice of the prime minister. The Judicial Branch is the Eastern Caribbean Supreme Court. Antigua is also a member of the Caribbean Court of Justice.
The Supreme Court of Appeal was the British Judicial Committee of the Privy Council, up until 2001, when the nations of the Caribbean Community voted to abolish the right of appeal to the Privy Council in favour of a Caribbean Court of Justice. Some debate between member countries had repeatedly delayed the court's date of inauguration. As of March, 2005, only Barbados was set to replace the process of appeals of Her Majesty in Council with the Caribbean Court of Justice which then had come into operation
In the 1970s and 80s many of the British Dependent Territories were happy to accept applications for banking licenses with a minimum of paperwork and fuss - resulting in significant scandals and criminal activity. In reaction, the UK imposed increased standards on the territories which are now unwilling to receive applications from anybody other than existing international recognized banks. Therefore, jurisdictions such as the British Virgin Islands, the Turks and Caicos Islands, Cayman Islands, etc., are worthy of consideration mainly for major financial institutions.
Antigua, an independent Caribbean island Commonwealth member, is an exception and is currently welcoming applications for banking licenses. The licenses require a paid in capital of US$1,000,000, but no requirements regarding capital reserves or loan ratios are imposed, and the physical presence that a management company can provide is all that is needed.
Antigua therefore represents a possibility to obtain a banking license without the considerable costs which would be experienced in most other competitive jurisdictions. While capital requirements are higher than that of some of the Pacific rim Islands, but the license granted is broader.
| Antigua and Barbuda |
|
Capital
(largest city) |
Saint John's
17°7′N 61°51′W |
| Official language |
English |
| Area |
442 km² (198th)
171 sq mi |
| Population
|
81,479 |
| Currency |
East Caribbean Dollar |
| GDP (PPP) |
US$ 750 million (170th) |
| Per capita |
US$ 11,523 (59th) |
| Time zone |
(UTC-4) |
| Dialling code |
1-268 |
ECONOMICS OF ANTIGUA AND BARBUDA
Antigua and Barbuda welcomes foreign investment and provides
a hospitable environment and generous incentives to encourage
such investment.
The government is keen to assure investors that their investments
are secure and well protected. Therefore, Investment Protection
Agreements have been signed with the Federal Republic of Germany, and with the United Kingdom.
In a world of coups and crises Antigua and Barbuda is a paradise
for the businessman. It has both a pleasantly tropical climate
throughout the year and a long tradition of political stability
based on parliamentary democracy.
While the Government intervenes in the economy as a regulator
in some instances, the private sector is the dominant force in
the economy. The government and
the ruling United Progressive Party (UPP) are committed to upholding the principle of
free enterprise and this pledge is shared by the main political parties. Successive
governments have respected the agreements and commitments made between previous
administrations and investors.
No investor has ever had assets nationalised or been forced
to leave the island. Under the island's constitution, property
can only be nationalised in exceptional circumstances and even
in
such cases the country's constitution demands that fair compensation
must be determined by an independent authority and must be paid
promptly. This constitutional requirement is unusual in developing
countries and casts Antigua and Barbuda in a very attractive
light for investment.
The legal basis for Antigua and Barbuda's tax holidays for investors
is codified on the Fiscal Incentives Act. The length of the 'holiday'
depends on the amount of value added in Antigua and Barbuda.
The definition of local value added is the amount realised from
the sales of the product over a continuous period of 12 months,
minus:
a) Cost of imported raw materials, components, parts of components,
fuels and services;
b) Wages and salaries paid to foreign nationals;
c) Profits and dividends distributed to foreign nationals;
d) Interest, management charges and other income payments to not-residents (including companies);
e) Depreciation of imports of plant, machinery and equipment.
The government offers numerous concessions to investors, particularly
if the investment is substantial. Typical concessions include:
- Freedom from the payment of Corporate Tax on the profits arising out of
the profitable operations of the company for a period of 15 years in the
first instance which is eligible for renewal for a further 15 years
- Waiver of all import duties on consumption tax on the importation of materials
and equipment used in the operations of the company
- Grant of an export allowance in the form of an extended tax holiday on
the exportation of goods produced in Antigua and Barbuda;
- The right to repatriate all capital royalties, dividends and profits free
of all taxes or any other charges on foreign exchange transactions. The government
allows a company to import a standby electricity generator free of all import
duties and consumption taxes. All office equipment and vehicles to be used
in the company's operations
can be imported free of duty and consumption taxes. The government grants
all work permits and the necessary residential status to all expatriates
who are key to a company's operations.
Below are some of the investment opportunities and benefits:
- English speaking.
- Stable government.
- Good communications.
- Development potential.
- Currency tied to US Dollar
- Private sector predominates.
- Generous incentives for economic development.
- Good labour relations.
- Membership in trade blocs.
- Tourism of primary importance.
- Growing financial services industry.
- Tax holidays and ready repatriation of capital and profits.
- Positive attitude of local people and businesses.
- Preferential trade agreements.
- Good international communications.
- A tax holiday of 5 to 20 years is available.
- Companies enjoy a wide variety of incentives.
- Export-oriented businesses are eligible for tax rebates.
- Relief from customs duties and other indirect taxes.
- Exemption from exchange control regulations is possible.
- Guaranteed work permits for foreign nationals.
- Memberships of Caricom, Lome Convention, CBI, Caribcan.
- Capital and earnings can be repatriated.
- Hundred per cent foreign ownership is permitted.
- A wide range of enterprises is available for investment.
- Joint ventures with locals not essential.
- Most goods may be freely imported.
- Full commercial banking services from international banks.
- Centre for offshore financial services.
- Few restrictions are imposed on imports.
- Customs duty exemption for new hotels and approved industries.
Business entities
A locally incorporated company in Antigua is the most common vehicle
for foreign investment, and often this is the most tax-efficient method.
A branch of a foreign corporation can cause tax problems in the home
territory.
Capital requirements
The minimum share capital is EC$2. There is no maximum.
Founder's requirements
Two subscribers are required to form a private company; a public company
requires five. Company formation is a very simple matter, requiring the
drafting of a memorandum and articles of association and filing these
with the Registrar of Companies. The cost is approximately EC$1,000 (US$370)
Foreign ownership/Participation in Management
Once approval for the project has been obtained, a foreigner may be a
director. Employees may serve as directors at the discretion of the shareholders.
Repatriation of funds
Normally consent would be obtained from the outset. Provided any relevant
taxes have been paid, Exchange Control approval will be given to remit
profits in normal circumstances.
Liquidating an investment
This involves the appointment of a liquidator, who would normally be
an accountant or lawyer, to wind up the co affairs. If a company owned
land and a non-citizen wished to buy, an alien landholder's license would
be needed.
Tax considerations
Incorporated companies pay tax at 40% of profits. Businesses that are
not incorporated pay a 2% tax on gross income. Companies and businesses
can deduct justifiable directors' fees and proprietors' salaries in arriving
at a taxable profit. The tax advantage of the local company is that if
a tax holiday is given, profits may be accumulated and not necessarily
taxed in the country in which the foreign shareholders reside until distributed
as dividends. This is not always the case, of course, and depends on
the tax laws of the country concerned.
Professional advice
It
is essential to discuss the matter in detail and
in advance with the investors' own tax advisers and
with local tax advisers to ensure a tax-efficient
structure.
Labour relations and social security
- All levels of staff are available locally, but skilled labour is not
plentiful.
- Employer-employee relations are simplified by the Labour Code and the
Industrial Court Act.
- Social security and medical benefit schemes are in operation, but there
are no unemployment benefits.
Tax system
- The bulk of government revenue comes from indirect taxation.
- Resident individuals are not assessable to a personal income tax.
- Capital gains not subject to taxation.
- Tax incentives are available.
- Capital gains are not subject to taxation.
- Withholding taxes are levied on certain overseas payments, including
management fees.
- Restriction is placed on losses available for carry forward.
- A wide range of industries qualify for tax concessions.
- Tax holidays of up to 15 years (with five-year extension possible)
are available for qualifying business.
- Companies involved in banking pay a 3% tax on gross income. That is,
interest income and fees derived from the operations and investments
of the banking business minus interest expense.
- Companies involved in internet gaming, sports books and virtual casinos
pay a 3% tax on gross handle. That is, gross take-in minus payouts to
clients on bets.
- Basically, residents have their permanent place of abode in Antigua
or are present in Antigua for 183 days in a year.
- If expatriates arrive late in a tax year but are resident in the following
year, they qualify as resident in the year in which they arrive. The
same rule applies when they leave.
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