Most Caribbean countries have a 0% tax rate for capital gains and personal income. This can be useful for business people: with tax residency in these countries, they pay less for taking money out of business.
Investors also benefit from the tax havens: they can pay 0% tax for receiving dividends, royalties and interest from around the world.
One way to get Caribbean tax residency is to participate in citizenship by investment program. If a foreigner meets the requirements, they can obtain a passport in 3—4 months.
A tax haven is a country that provides low tax rates for individuals and businesses. Residents of such countries often pay 0% taxes for global income, dividends, royalties and interest.
Companies registered in tax havens also benefit from low corporate tax. For example, St Lucia has 0% corporate tax for foreign income.
Apart from tax benefits, tax havens provide financial secrecy for their residents and offer less strict reporting requirements. Also, they may have limited agreements with other countries to exchange tax-related information.
Investors and business people use tax havens to reduce the tax burden and to protect their assets, which is legal. However, some may use tax havens in financial fraud schemes to evade taxes — such schemes are illegal.
Anguilla does not impose personal income tax on individuals, while corporate tax depends on the company's activity sector. Corporate tax is 0% for international companies and companies operating in banking and insurance. All others are charged 5% of income.
Antigua and Barbuda has no taxes on personal income and capital gains. It is also one of the less expensive countries to get citizenship by investment, while others charge at least $150,000; it requires $100,000 for a single applicant.
Bahamas. Tax residents in the Bahamas don’t pay taxes for personal income and capital gains. However, the companies registered in the Bahamas are required to pay an annual business licence fee. It may vary from 0.5 to 3%, depending on annual turnover.
Bermuda has no capital gain tax or income tax. But instead, Bermuda obliges entrepreneurs to pay payroll tax for local employees — 14.5% of salaries, up to 8.5% of which can be revoked from employees.
There is also a land tax for homeowners and those renting an apartment for at least 3 years. The Land Tax is due twice a year, in March and September. The amount of money paid depends on the annual rental value:
The British Virgin Islands do not tax personal income, corporate income and capital gains. But similar to Bermuda, it imposes payroll taxes and social security contributions on employers and employees. These contributions fund social welfare programs such as healthcare, pensions, and other social benefits.
The British Virgin Islands impose stamp duty on various transactions, including selling or transferring real estate, shares, and other assets. The rates and regulations may vary depending on the specific transaction and the nature of the asset.
The Cayman Islands do not have direct taxes like income or corporate tax, but they do have some indirect taxes. These include import duties, stamp duty on specific transactions, and a government fee on real estate transactions.
The important thing is that the Cayman Islands has signed numerous Tax Information Exchange Agreements with other countries. The country must exchange tax-related information with other jurisdictions to prevent tax evasion, which boosts its reputation.
Dominica has quite high progressive tax rates for personal income — 15 to 35%. On the other hand, Dominica has no taxes for dividends, royalties and interest, which is useful for investors.
Dominica citizenship can be obtained by making a non-refundable contribution or participating in a real estate project. An applicant invests at least $100,000 in the country’s economy and gets a passport. After that, they can apply for tax residency.
Elijah is a share-holder of an international Israeli company that produces and sells skin care cosmetics. The dividends from the company are the investor’s primary source of income, 25% of which goes to taxes.
Our client moved to Dominica and got the tax residency there. As a result, he was no longer obliged to pay tax on dividends in his country of origin.
Getting tax residency took Elijah 2 weeks.
Grenada has 0% taxes for personal income if the source of that income is outside the country. The rates for domestic income vary between 10 and 28%. However, the dividends, royalties and interest are not taxable. Corporate tax is 28% for global income.
Grenada offers a citizenship by investment program, which allows the investor to get a Caribbean passport for the whole family. To participate in the program, the investor must contribute at least $150,000 to the country's economy.
St Kitts and Nevis. There is no personal income tax on worldwide income in St Kitts and Nevis and no capital gains tax. However, companies registered in this country are charged 33% taxes, which is very high in case you plan to establish a company in the Caribbean. Otherwise, it has the same low rates as other countries.
The St Kitts and Nevis citizenship program is the oldest in the world: it was launched in 1984. Since then, more than 20,000 applicants have received passports and become tax residents.
St Lucia offers a 0% tax rate for foreign income for both individuals and corporations. This may be useful for businesses to control the international company from the island and pay no corporate tax. The St Lucia authorities allow 100% foreign ownership of companies in any sector.
Many business planning and management professionals live in the country. Business people may consider hiring these people to help organise and control the business.
Obtaining St Lucia economic citizenship takes 3 to 4 months. The minimum investment amount is $100,000, and may vary depending on the number of family members. Additional costs include Due Diligence of $7,500+ and a processing fee of $2,000.
Only tax residents can benefit from the Caribbean tax regime, being able not to pay tax for global income and tax for capital gains: dividends, interest, and royalties.
Tax resident status is granted to anyone who spends 183 days in the country, so getting a classic visitor visa for stays up to 90 days is not enough. Instead, Caribbean citizenship is required. Most countries recognise dual citizenship, so there is no need to renounce your current one.
The fastest way to obtain Caribbean citizenship is by investment: an investor makes a one-time contribution or buys real estate and gets a Caribbean passport. Shortly after that, they can apply for tax residency. Such programs operate in St Lucia, Dominica, Antigua and Barbuda, St Kitts and Nevis, and Grenada.
| Tax | Antigua and Barbuda | Dominica | Grenada | St Kitts and Nevis | St Lucia |
| Foreign income | 0% | 15—35% | 0% | 0% | 0% |
| Domestic income | 0% | 15—35% | 10—28% | 0% | 0—30% |
| Corporate income | 25% | 25% | 28% | 33% | 30% |
| Dividends | 0% | 0% | 0% | 0% | 0% |
| Royalties | 0% | 0% | 0% | 0% | 10% |
| Interest | 0% | 0% | 0% | 0% | 10% |
| Social contributions | 5.5% | 6% | 5% | 5% | 5% |
Apart from tax optimisation, Caribbean citizenship gives some additional benefits:
To get Caribbean citizenship, an investor needs to either make a non-refundable contribution to the state's economy or purchase real estate there:
Apart from this sum, investors may need to pay Due Diligence, state fees and other fees. For example, the total sum for getting Dominica citizenship is $194,700 for contributions and $254,700 for buying real estate.
The process of obtaining a Caribbean passport may take up to 6 months. During this time, the investor applies to a licensed agent who will help with the Due Diligence process.
No, they are legal. These countries just offer lower tax rates and financial secrecy, which is not prohibited. However, some unscrupulous businessmen use the anonymity of financial transactions in tax havens to avoid taxes. The IRS is looking for them.
Tax havens are legal. Financial fraud is not.
The Cayman Islands has 0% property tax, although many other countries have very low taxes. For example, St Kitts and Nevis provides only 0.2—0.3% property tax. Same thing with St Lucia, which offers 0.25% for residential property and 0.4% for commercial property.
There is no official list of tax havens, but we may offer some good options based on experience. These are Antigua and Barbuda, St Kitts and Nevis, Dominica, St Lucia, Bermuda, The British Virgin Islands, The Cayman Islands, The Bahamas, Grenada, and Anguilla.
Such programs operate in 5 Caribbean countries: St Lucia, Dominica, Antigua and Barbuda, St Kitts and Nevis, and Grenada.
No. Caribbean citizenship gives the right to enter and stay in the country, but tax residency usually requires spending at least 183 days a year there. Only tax residents can fully benefit from local tax rules.
