Company Formation in Grenada

Investors starting a business in Grenada as an offshore could formerly register an International Business Company (IBC); however, the International Companies Act was repealed and, from 1 September 2021, former IBCs continue under the Companies Act and are taxed like other companies. This type of company can be incorporated as a limited liability company, following the national rules. The main difference between a resident limited liability company and the IBC is that the latter can only engage in economic activities originating outside Grenada.

Our consultants in company formation in Grenada can offer the necessary advice on the local legislation, the rights and obligations of foreign investors, assistance in the incorporation process and many more.

The characteristics of an IBC in Grenada

Investors who will open a company in Grenada as an IBC must know that this structure is characterized by the following:

• the former IBC regime granted tax exemptions for 20 years, but these ended with the repeal of the International Companies Act;
• it was entitled to a 0% tax rate on the corporate income tax, the capital gains tax, the withholding tax, wealth tax and inheritance tax;
• the process of company incorporation in Grenada can be completed by 1 shareholder;
• the company must have 1 director, who can be the company’s shareholder, even in the case in which the legal entity is incorporated by only 1 shareholder (thus, the investor can have full control over the company).

Investors who will set up a company in Grenada through an offshore can no longer use an IBC to be exempt from paying taxes such as the corporate income tax, charged at a rate of 28%, or the valued added tax, charged at rates ranging from 0% to 20%.

Income tax is also imposed on the income obtained by individuals working or obtaining taxable revenue in Grenada (the tax is imposed to income above $60,000, according to the Ministry of Finance). Since the IBC regime was repealed, there is no general offshore exemption from Grenadian taxes.

Why opt for offshore company formation in Grenada?

Our consultants recommend investors select this jurisdiction not only due to its business environment (the former 20-year IBC tax exemptions are no longer available), but also because the country provides a high confidentiality level and no exchange control policies.

Confidentiality is assured in the sense that the names of the shareholders and the directors are not publicly displayed. We also recommend Grenada for offshore company setup because it has minimal accounting obligations.

Like companies in other jurisdictions that submit annual financial returns, former Grenadian IBCs now continue under the Companies Act and must meet its filing obligations. These include basic accounting obligations that must be respected, such as maintaining the company’s accounts.

What are the financial obligations of an IBC in Grenada?

Besides the taxes now payable by former IBCs, it must be noted that starting a business in Grenada implies certain financial obligations, which appear in the form of various fees. For instance, upon the registration of a legal entity, investors must pay registration fees.

The fees are charged not only for the registration of the business, but also for each year of activity the company has (imposed as an annual renewal fee). These are paid to the Grenada Corporate Affairs and Intellectual Property Office.

Of course, you can rely on our team of specialists in company formation in Grenada for the payment of any registration or renewal fee, as well as for any other obligation your business may have throughout its years of activity. We also invite you to contact us if you need legal representation for the setup of an offshore bank account for personal or business purposes.