INTERNATIONAL BUSINESS COMPANY (IBC)

Saint Lucia has become in recent years a popular offshore financial services center due to its pro-business legal framework.

IBCs stand out for its fast registration process, confidentiality, flexible structure, and its low annual fees and reporting requirements.

IBCs can be incorporated by a sole shareholder, who can be either resident or non-resident, individual or corporation. One director is required, who can be either resident or non-resident, individual or corporation, and can be the same person as the shareholder.

Details of members of the IBC remain private, as are not disclosed in a public registry. The equity in the form of the company’s shares is only made available to the Registered Agent.

Reporting requirements are non-existent. Annual return, financial statements, and tax return are not required to be filed. 

Saint Lucia has gone through several amendments of its business and tax laws to comply with requirements set by the OECD and the EU and avoid being blacklisted as an uncooperative jurisdiction.

International Business Companies (IBCs) in Saint Lucia will no longer be exclusively available for non-residents and they will be able to do business locally. Effective January 1, 2019, IBCs can be also incorporated by residents and can do business in Saint Lucia.

IBCs are now subject to the local tax regime. However, Saint Lucia has also passed several amendments to its tax laws to switch to a territorial tax system. All companies, including IBCs, will be taxed at 30% corporate tax on income from Saint Lucia-source and will be exempted from taxation on income from foreign sources.

Foreign-source income is defined as follows:

• Profits derived from a permanent establishment outside of Saint Lucia

• Profits derived from immovable property situated outside of Saint Lucia

• Interest income not borne by a Saint Lucia permanent establishment or charged against property located in Saint Lucia

• Income derived from investment in securities issued by a person outside of Saint Lucia, e.g. mutual funds, stocks, bonds, etc.

• Management charges paid by a nonresident outside of Saint Lucia

• Royalty payments received from a foreign permanent establishment and paid to a resident permanent establishment.

• Any income deemed to be accrued from foreign sources due to a DTA.

Dividends and capital gains are also exempt from taxation in Saint Lucia.

IBCs conducting certain economic activities will have to meet certain substance requirements – including an adequate number of employees, adequate operating expenditure, adequate investment and capital commensurate according to the activity, as well as file annual tax returns, among others.

IBCs incorporated before December 1, 2018, will be subject to the previous IBC regime until June 30, 2021.

The International Partnerships Act and the International Trusts Act, have also been amended to prevent new registrations since December 1, 2018. International Trusts and International Partnerships registered before December 1, will be grandfathered until June 30, 2021, subject to certain conditions such as the prohibition for trusts to acquire new assets or carry out a different purpose.

Saint Lucia has implemented the OECD’s automatic exchange of information for tax purposes (AEoI),

Due to its features, Saint Lucia’s IBCs are commonly used vehicles for a broad range of investment and business purposes, such as offshore investments, professional services, international trade, insurance and as a holding company.

Legal

Country code – LC

Legal Basis – Mixed (Civil and Common Law)

Legal framework – International Business Companies Act 1999 (Amended 2000, 2001)

Company form – International Business Company (Corporation limited by shares)

Liability - The liability of the shareholders for the company is limited to the amount of their respective shareholdings.

Economic Substance – IBCs conducting certain economic activities have to meet certain substance requirements – including an adequate number of employees, adequate operating expenditure, adequate investment and capital commensurate according to the activity, as well as file annual tax returns, among others.

Share capital – The authorized share capital is usually US$50,000. No minimum paid-up capital required. Shares may be denominated in one or more currencies. 

Shareholders – IBCs may be incorporated by one or more shareholders, who can be either natural or legal persons, residents or non-residents, without restrictions. Details of shareholders are not publicly disclosed.

Directors – At least one director is required, who may be a natural person or a legal entity. Directors’ details are not available to the public.

Secretary – The appointment of officers such as a secretary is optional, and may be an individual or a corporation, resident or non-resident.

Registered Address – Every company must have a registered office in Saint Lucia, provided by a licensed service provider.

General Meeting – Annual general meetings are not mandatory. However, if meetings are held, they can be anywhere in the world and may be by proxy, and minutes of the meeting must be taken but a minute book can be kept anywhere.

Electronic Signature – Permitted.

Re-domiciliation – Inward and outward re-domiciliation is allowed.

Compliance – Saint Lucian International business companies must keep accounting records. The records may not be kept anywhere.

Corporate Income Tax – IBCs are subject to the local tax regime. Saint Lucia has a territorial tax system. All companies, including IBCs, are taxed at 30% corporate tax on income from Saint Lucia-source and are exempted from taxation on income from foreign sources.

Foreign-source income is defined as follows:

• Profits derived from a permanent establishment outside of Saint Lucia

• Profits derived from immovable property situated outside of Saint Lucia

• Interest income not borne by a Saint Lucia permanent establishment or charged against property located in Saint Lucia

• Income derived from investment in securities issued by a person outside of Saint Lucia, e.g. mutual funds, stocks, bonds, etc.

• Management charges paid by a nonresident outside of Saint Lucia

• Royalty payments received from a foreign permanent establishment and paid to a resident permanent establishment.

• Any income deemed to be accrued from foreign sources due to a DTA.

Dividends and capital gains are also exempt from taxation in Saint Lucia.

Personal Income Tax – Personal Income Tax is levied on a residence and remittance basis.

Individuals residents or ordinarily residents in Saint Lucia are subject to personal income tax on a worldwide basis.

Individuals residents but no ordinarily residents are subject to personal income tax on their Saint Lucian source income and foreign-source income remitted to the country.

Individuals non-residents are taxed on their income from Saint Lucian sources and income from foreign-sources remitted to the country.

Personal Income tax rates are progressive up to a top marginal tax rate of 30% on annual income exceeding XCD 30,000. Capital Gains, Dividends and Saint Lucian bank interests are tax-exempt. 

Other taxes – Saint Lucia levies a residential property tax of 0.25% of the open market value of the property. There is a stamp tax on the transfer of assets, ranging from 2% to 10%, depending on the type of asset and residency status of the seller. There are no net wealth and inheritance taxes in Saint Lucia.

The Value-added tax rate is 15%. Reduced rate of 10% applies to the hotel sector. Certain goods and services are tax-exempt.