Introduction

While Grenada might not be the first place you think of when you consider immigrating, it has an interesting and fairly unique tax system that may make it an attractive option. While Grenada does still have some taxes, and you cannot live completely tax free, there are significant benefits to living on this island nation.

If you are looking for a new country to call home, they are worse places to consider then a tropical island paradise.

Let’s take a closer look at the tax system in Grenada and how it may benefit you to live there.

Grenada Citizenship by Investment Program

Like many countries hoping to attract foreign direct investment, Grenada has created a citizenship by investment or golden visa program. If you want to participate in the program, you need to make $150,000 donation or invest $200,000 in government approved properties. You then need to maintain the investment in that property for five years. 

Recently however Grenada removed the requirement to be a permanent resident of the country before qualifying for citizenship. Which means you could become a citizen of Grenada in a relatively short amount of time. This may be attractive for tax purposes. You are not however required to renounce your citizenship to become a citizen of Grenada. So, if you wish to remain a citizen of your home country you can do so.

Benefits of Grenada as a Tax Haven

Individuals and corporations in Grenada still have to pay taxes. However, unlike most countries Grenada has no capital gains inheritance or wealth taxes. It also has attractive tax rates incentives and credit programs which makes it an attractive choice for corporations and high net worth individuals.

Grenada is also fairly unique in that even tax residents are only taxed on income generated inside Grenada itself. Which means you will not be taxed on international income. If you plan to retire or keep most of your business interests outside of the country, this could significantly impact your tax bill. 

You will still pay tax if you live in Grenada, it’s just likely to be significantly less than elsewhere.

Tax Types in Grenada

If you earn income in Grenada whether you are a tax resident or not, you will be taxed on that income. The difference is in the rate of taxation. Tax residents of Grenada who live in the country for more than six months of the year, are taxed 30% whereas temporary foreign workers who are in the country for less than six months are taxed at a rate of 15%. Let’s take a closer look at some of the other taxes you might have to pay as an individual or corporation in Grenada.

Taxes on corporations and individuals

While Grenada is certainly a tax haven, and there are several kinds of taxes that you won’t have to pay at all, they are still both individual and corporate taxes to be paid.

Income Tax

Both individuals and corporations in Grenada are taxed on their local income. Assuming your corporation is registered in Grenada, and you are a tax resident, you will be charged 30% tax on your gross income.

if you are working temporarily in Grenada, you will be taxed 15% on your local income.

Neither individuals nor corporations are taxed on global income in Grenada.

Dividends and Royalties

If you earn dividends and royalties and you are not a tax resident in Grenada, you will be taxed 15% on those earnings.

Property Tax

Property taxes in Grenada are based on the value of the property in question. However, they are significantly lower than other countries. You can expect to pay between 0% and 0.5% property tax on property you earn in the country.

Property sales are also subject to property transfer tax, which is 5% for residents and 15% for non-residents.

Value Added Tax

Like many countries Grenada uses a value added tax or VAT system. The standard VAT rate is 15% on goods and services, but this is reduced to 10% in the tourism sector.

Corporate Tax

Corporate tax in Grenada is set at 30% of gross income less applicable deductions and tax credits.

Tax Treaties in Grenada

Currently Grenada has tax treaties with twelve countries. It is also a Commonwealth member, and since 2018, has been an OECD member. It’s important to note that Grenada does not have a tax treaty with the United States, which means if you are a United States citizen you will still be required to pay taxes in the US. Therefore, if you are considering immigration, it may be worth renouncing your U S citizenship.

What are the rates for foreign income?

One of the things that makes the tax system in Grenada so unique is that unlike most other countries no tax is levied on foreign income. This applies regardless of whether you are a tax resident of Grenada or not. Which means you can earn investment income, income from international businesses, or even a salary from a foreign company, and not be taxed on it.

It is this surprising leniency, along with the lack of capital gains inheritance and other taxes that give Grenada the status of a tax haven.

Frequently Asked Questions & Answers

Is all foreign income tax exempt in Grenada?

Yes. Neither individuals nor companies are text on their foreign income in Grenada.

How do you become a tax resident in Grenada?

You do not need to be a citizen of Grenada to be a tax resident of the country. Anyone who spends over 183 days in any year in the country, is considered a tax resident. However, because the country has limited tax treaties in place, this may not exempt you from taxes in your home country. Which is why so many people and businesses take advantage of the Grenada investment immigration scheme.

Can foreigners own property in Grenada?

Yes. The government of Grenada does not place any restrictions on foreign ownership of property in the country.

Can I bring my family with if I apply under the citizenship by investment program?

Yes. Certain family members may accompany you to Grenada if you apply for citizenship by investment. like most immigration programs, the rules are subject to change from time to time, so it is advised to check the most recent regulations when you apply.

Is an investment the only requirement for citizenship by investment in Grenada?

No. Like most countries Grenada has eligibility criteria that must be met in order to qualify for the immigration by investment program. These include proof that you don’t have any serious medical conditions, proof that you don’t have a serious criminal record, proof that you are not a security risk to the country, and proof that you have funds to support yourself. The country may also require proof that any funds you are using to invest in the country have been legally obtained. 

What are the penalties for tax evasion in Grenada?

the tax system in Grenada is very lenient. Because of all the taxes that you don’t pay your tax bill will also be a lot lower than in most other countries. However, if you are found to be avoiding or evading tax that is due there are penalties that may include finds another action. It’s also important to note that many countries do pay close attention when they citizens are residents in Grenada. So, if you are not a citizen of Grenada and you have not renounced your citizenship of your home country make sure your taxes at home are in order.

If you would like to know more about the taxation framework in Grenada contact us today to book a free and comprehensive consultation with one of our experts.