Offshore Entities in Grenada

Grenada international companies are the equivalent to offshore companies or international business companies which are tax exempt corporations used for trading.

Offshore companies incorporated in Grenada are relatively easy to manage, have a flexible structure that permits changes and powers and capacities that are equal to those of a human being.

In 1996-97, about six pieces of legislation were passed to head off what was a budding offshore and financial services sector. An Act governing Grenada offshore companies, the International Companies (Amendment Act) was passed, coupled with the International Insurance Act, Company Management Act, Offshore Banking Act and the Offshore Services (fees) Regulations. By September 1998, 734 Grenada offshore companies were incorporated, 3 trust companies registered and 23 offshore banks were established. Once the new millennium has begun however, new demands from international agencies such as the OECD and FATF required the implementation of new regulations for offshore and international financial activities based on international standards that had been set. Following this, a series of events which negatively affected Grenada offshore sector resulted in the suspension and revision of most offshore activities.

Under a newly revised legislative framework that seeks to adhere to international standards, the upward movement of Grenada offshore sector has been cautious but effective in terms of Grenada’s ability to offer a competitive offshore product which is capable of making a meaningful contribution to the economy. The incorporation of Grenada offshore companies and provision of financial services continues to be essential to financial growth and maintaining a broad based and diversified economic base. Currently, the most common offshore activities undertaken from within Grenada are offshore banking, enterprise construction, comparable to Seychelles company registration, and trust formation.

Grenada offshore companies are not subject to local taxes and enjoy very few reporting requirements. An offshore company which was incorporated in Grenada does not have to file annual balance sheets or audited statements because no income or corporate tax requirements exist. An offshore company can be incorporated in Grenada with one director and one shareholder, with the possibility of the same individual fulfilling both positions. Both corporations, an individual or a group of persons are capable of incorporating Grenada offshore companies, in which case specific identification documents will be required depending on whether the members are natural or legal persons. With the exception of restrictions against doing business in Grenada, offshore companies are free to carry on their activities in any part of the world and can be created by any one above the age of 18 regardless of nationality.

The offshore banking laws of Grenada function similarly to those governing offshore companies. Grenada offshore banks are tax free entities and are disallowed from offering banking services to people and corporations that are considered to be ordinarily resident in Grenada. Offshore banks are licensed depending on the banking business intended as some banks may specify and restrict their activities and services, while others offer unrestricted or general banking services. Consequently, two main types of offshore banking licenses are issued; Class 1 (unrestricted offshore banking) and Class 2 (restricted offshore banking).

Grenada offshore trusts serve as vehicles for protecting assets, setting up pension and retirement funds. Any agent authorized to offer Grenada offshore trust services must be licenced as a trustee company. The trust property of a Grenada offshore trust must not be located in Grenada.