Nevis

ESSENTIAL FACTS

LOCATION: 17 20 N, 62 45 W
St. Kitts and Nevis are two volcanic islands in the Caribbean Sea about one-third of the way from Puerto Rico to Trinidad and Tobago.

POPULATION: 39,349

CURRENCY: East Caribbean dollar (XCD)

LANGUAGE: English

CLIMATE: St. Kitts and Nevis has a tropical climate with constant sea breezes.

EDUCATION: Almost 98 percent of those age 15 and over has ever attended school.

PUBLIC HOLIDAYS: Independence Day, 19 September (1983)

HISTORY AND GOVERNMENT

HISTORY
St. Kitts and Nevis was first settled by the British in 1623 and achieved independence in 1983. Nevis has tried several times to separate from St. Kitts, but falls short of the vote needed to do so. The most recent attempt was 10 years ago.

POLITICAL SYSTEM
St. Kitts and Nevis is a parliamentary democracy, with Queen Elizabeth II represented by a Governor General. The head of government is the Prime Minister, supported by a Deputy Prime Minister. Its legislative branch consists of a unicameral National Assembly.

JUDICIAL SYSTEM
The St. Kitts and Nevis judicial branch is based on English common law.

COMMERCE AND TRADE

COMMERCIAL ACTIVITY
Agriculture: Sugarcane, rice, yams, vegetables, bananas; fish
Industry: Tourism, cotton, salt, copra, clothing, footwear, beverages

TRADE PRACTICES
Exports: Machinery, food, electronics, beverages, tobacco to the US, Canada, Netherlands and Azerbaijan
Imports: Machinery, manufactures, food, fuels from the US, Trinidad and Tobago, Spain and the UK

FREE TRADE ZONES
There are eight industrial and commercial free-trade zones in St. Kitts and Nevis: Tacna, Ilo, Mollendo, Tumbes, Trujillo, Paita, Chimbote and Pisco. Exporters are exempt from customs duties and enjoy a 15-year tax holiday. Commercial treatment zones are exempt from VAT and receive a 10 percent discount on customs duty.

BANKING, FINANCE AND INVESTMENT

FINANCIAL FACTS
Sugar was the traditional mainstay of the Saint Kitts economy until the 1970s. Following the 2005 harvest, the government closed the sugar industry after decades of losses of 3-4% of GDP annually. To compensate for employment losses, the government has embarked on a program to diversify the agricultural sector and to stimulate other sectors of the economy. Activities such as tourism, export-oriented manufacturing, and offshore banking have assumed larger roles in the economy and have contributed to the recent robust growth. Tourism revenues are now the chief source of the islands' foreign exchange; about 341,800 tourists visited Nevis in 2005. The current government is constrained by a high debt burden, public debt reached 190% of GDP by the end of 2005, largely attributable to public enterprise losses.

Fiscal year: Calendar year

BANKING
Under the Banking Act of 1991 and the Financial Services Order of 1997 there are two types of bank licenses one can obtain. Unrestricted licenses require minimum capital of USD$500,000; restricted licenses need only USD$50,000.

MEMBERSHIPS
ACP, C, Caricom, CDB, FAO, G-77, IBRD, ICAO, ICCt, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, ITU, MIGA, NAM, OAS, OECS, OPANAL, OPCW, UN, UNCTAD, UNESCO, UNIDO, UPU, WHO, WIPO, WTO

FOREIGN INVESTMENT
Manufacturing companies receive duty-free equipment, machinery, spare parts and raw materials used in production. The hotel and resort industry offers customs duty exemptions on all materials and concessions for hotels of more than 30 units, as well as a 10-year tax holiday. Hotels with less than 30 units receive only a tax holiday of five years.

REAL ESTATE
Rentals must pay a 5 percent house tax, of which 25 percent is rebated if the owner is the only resident on the property. Special Development Areas levy a tax of 0.5% of the assessed market value of the land, or land and improvements.

IMMIGRATION

VISAS
Tourist visas are needed for all countries except the UK, US and Canada. If you require a lengthy stay in St. Kitts and Nevis, you must be prepared to prove financial independence.

EMPLOYMENT
Non-residents are charged XCD1,500 annually for a work permit. Work permits are issued once the employer has proven that no local labour is available for the position, and the health of the employee candidate passes muster.

CITIZENSHIP
A St. Kitts and Nevis passport can be issued to foreigners upon substantial investment in an “approved investment project,” which can be in any currency but must equal at least USD$350,000. There are also registration fees of USD$35,000 for head of household, USD$15,000 for spouse and USD$35,000 for each adult family member. Applicants must also provide health certificates, criminal records (or proof of lack thereof), civil status certificates, and financial records - all in English and notarized. Once the passport is issued, it is usually valid for 10 years.

BUSINESS

BUSINESS ENTITIES
An offshore company in St. Kitts and Nevis is a company limited by shares, and must be located within Nevis. At least one director should have residence in Nevis. Minimum capital is XCD2 million, with at least XCD1 million should be in paid-up cash.

TRUSTS
St. Kitts and Nevis trusts are exempt from income, withholding, capital gains and stamp taxes upon proof that the trust is not benefiting from any transactions with residents of St. Kitts and Nevis. This does not include holding meetings, conducting banking, and other activities that ensure the day-to-day operation of the trust. At least one of the two trustees required must be a resident or is active in the business community of St. Kitts and Nevis. There are no audits and no annual statements required. Strict confidentiality rules apply.

TAXATION

PERSONAL TAXATION
Capital gains tax is levied at 20 percent on profits disposed of within one year of their acquisition. There is no personal income tax in St. Kitts and Nevis. Personal withholding tax is 10 percent.

CORPORATE TAXATION
Corporate and withholding taxes for domestic companies conducting only domestic business is 35 percent.

OTHER TAXATION/DUTIES
Net worth, gifts, sales taxes and estate duty are all tax-exempt. All telecommunications are taxed 5 percent. There is a stamp tax of 2 percent on imports, a 15 percent tax on consumption and 3 percent for customs. An 18 percent VAT applies to taxable goods and imports.

DOUBLE TAXATION
St. Kitts and Nevis have double taxation treaties with Denmark, Norway, Sweden, Switzerland, the UK and the US.