IBC's

Important Facts on St. Vincent International Business Companies

1.                   The International Business Companies Act No.18 of 1996 and regulations S.R.O. No. 33of 1996 and their amendments govern the incorporation of International Business Companies in St. Vincent and the Grenadines.

 2.           Part 11 of the principal act outlines the requirements for registration and an individual’s capacity to incorporate an IBC.  Sensitive words such as “bank”, "banking", "fund"
and “insurance” will not be allowed without the relevant license. 

Company names must include a designation or abbrevi- ation that signifies limited liability.  Foreign denotations such as “Aktiengesellschaft”, “Anonima”, “Societe Anonyme” or the abbreviations such as A/S, SA, AG, GmbH , NV and BV are allowed.  Incorporation under documents in foreign language is allowed provided trans- lation is attached.

3.                  There are no requirements for a local director or any domicile requirements. One-director companies are allowed, and any director may be a corporate entity.

4.                   Two types of Incorporation Certificates are available, namely with or without the director’s name displayed.

5.                   The filed articles of incorporation is designed to contain a minimum of information including the name of the company, the Registered Agent, the currency of the capital and authorized capital, type of shares and any other provisions that may be required by the company.  A certificate of compliance by the Registered Agent or Solicitor that the requirements of the act have been complied with must accompany these articles.  This is the only information on the Public Record.  All other matters, such the operational aspects and rights of the shareholders, directors, and meetings are reserved for the by-laws, which are not public but remain a company internal document.

6.                   The IBC act explicitly foresees wide objects, and a unique range of shares, such as registered or bearer shares, voting shares, non-voting shares, shares that may have less than one vote per share, common shares, preferred shares, limited shares, shares limited by guarantee or redeemable shares, share that entitle participation only in certain assets, the issue of options, warrants, rights or instruments of similar nature to name but a few.  No list of shareholders has to be submitted.  Beneficial owners of shares are not made public.

7.                   Only a duly approved Registered Agent within the meaning of the new Registered Agent & Trustee Licensing Act (No.15), 1996, may submit applications for formations and undertake services set out in the Act.

8.                   Simply amending the Articles of Incorporation may now effect amendments to a company name.

9.                   Company books, share registers, etc., may be kept in or outside of St.Vincent.  No limitations on where or how meetings may be held, and there are no mandatory annual returns.

10.               An IBC may issue powers of attorney and management mandates in writing to any person.

11.               The IBC act freely allows mergers and consolidations, mergers with a subsidiary, merger or consolidation with foreign companies etc.

12.               Part VII of the IBC Act by means of continuation and migration facilitates transfer of domicile.

13.               The IBC Act also has provisions for limited duration companies (pass through companies known as limited liability companies in the USA and resembling the German GmbH and Latin American-style “Limitada”) with a single member provide for and the governance of these entities under private operating agreements as opposed to by-laws.

14.               An IBC receives upon formation a Government Certificate of Exemption from taxes for 25 years from the date of incorporation.

15.               Registration, name clearance, payment of annual fees, good standing certificates can now be processed through a confidential and secure electronic system.

16.               The International Business Companies (Amendment) Act No.26 and 44 of 2002 now allows for the registration and custody of bearer share certificates by the Registered Agent who must also keep a record of each bearer certificate issued or deposited in its custody and the record shall contain pertinent information relating to the company issuing the shares, the ID number of the share certificate and identity of the beneficial owner.  There are penalties for non-compliance.

17.               All existing international companies formed prior to the effective date of the new IBC act remain intact for a period of five years (until 2002).  The Authority has extended this period for a further six months – until June 2003.

18.               The Confidential Relationship Preservation (International Finance) Act, 1996 has been repealed and replaced by the Exchange of Information Act, 2002.  This new Act allows for the exchange or disclosure of information between local regulators and foreign (statutory) regulatory authorities.

                                     
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Important Facts on St. Vincent and the Grenadines Trusts

1.       Trust deeds are registered in a confidential government Trust Registry, whereupon an official Certificate of ‘Registration is issued to the Settler/Grantor.  

2.       A duly registered trust will not be rendered unenforceable because it was invalid under the laws of the Settler/Grantor’s domicile or residence.  Thus, forced heirship law and community property regimes can be avoided.

3.       The traditional rule against perpetuities and the rule against accumulations are modifies and clarified.   

4.       Purpose trusts, which are created for a specific purpose but without named beneficiaries, are allowed and statutorily prescribed.

5.       The role and duties of protectors are specifically set out and clarified to account for recent case law.

6.       Choice-of-law and conflicts-of-laws issues are anticipated and resolved in favor of the provisions of the International Trust Act.

7.       A foreign (non-Vincentian) judgment against a registered International Trust (or its settler or beneficiaries) is not enforceable in Saint Vincent if the judgment was based on law inconsistent with the International Trust Act, 1996.

8.       Actions against registered international trusts must be commenced within two years from date of creation of the trust.

9.       A complaining creditor may satisfy his claim against the property of a registered international trust only if that creditor can show both that the settlor/grantor’s principal interest in creating the trust was to defraud him, that the disposition of property to the trust rendered the settler/grantor insolvent.

10.   Traditional fraudulent conveyance laws (Statute of Elizabeth) are not applicable to registered international trust.

11.   The bankruptcy or insolvency of the settler/grantor under the laws of his residence or domicile will not affect a registered international trust.

12.   An international trust may own one or more Saint Vincent International Business Companies.  

13.   Registered trustees fall within the definition of ‘financial institutions’ of the Proceeds of Crime Money Laundering Prevention Act 2001 and are thereby subject to its anti money laundering requirements.

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Important facts on St. Vincent and the Grenadines International Insurance Sector

The International Insurance sector has been identified as an excellent growth area. The present insurance regime offers a great deal of flexibility to insurers wishing to conduct international insurance business.

The sector is regulated by the International Insurance (Amendment and Consolidation) Act 1998 which came into effect on December 15, 1998 and, the International Insurance Regulations gazetted on June 22, 1999 . Together these legislations set the legal framework for the high quality of regulatory and administrative processes necessary to foster and maintain market participation, transparency and confidence.

Under the new regime insurers have a choice of five classes of international insurance companies. This flexibility is designed to accommodate both the largest and the smallest insurance enterprises and allows for a diverse range of activity:

Class I – unrestricted- insurers can carry on any international insurance business, including long term;

Class II – General-  Insurers can carry on general but not long-term international insurance business;

Class III – Association- insurers can carry on general and long-term international insurance business with two or more owners of the insurer and/or their affiliates, and up to 30% of business with persons who are not owners of the insurer or their affiliates;

Class IV – Group- insurer can carry on general and/or long term international insurance business with one owner, its affiliates, and employees;

Class V – Single- insurer may carry on any international insurance business, with the sole owner of the insurer, if a company, or with the beneficial owners of the insurer, if a trust.

There are individual capital requirements for each class; higher requirements for higher risk firms. At the application stage, the firms themselves are allowed to state a class of business and to make their own specific assessment of the overall level of financial resources they would need to meet their liability.

Every single form that needs to be filed at the application stage and during the life of the licensee is exhibited in the Regulations along with all the relevant fees. This clearly allows for the simplification of the application process and further enhances the administrative process during the life of the licensed entity.

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Important Facts on the St. Vincent and the Grenadines Mutual Funds

Mutual funds are regulated by the Mutual Funds Act, 1997 as amended by the Mutual Funds (Amendment) Act 1998, with Regulations issued in 1999. The Act provides for the licensing of both domestic and offshore mutual funds. There are essentially two categories of fund licenses, namely a private and accredited fund license and a public fund license.

The legal structure that can form the basis of a St. Vincent mutual fund includes an incorporated company, a partnership or a unit trust. It can include an umbrella type fund. Open ended, closed ended and integral funds are allowed.

A Public Fund means a mutual fund, which offers any shares, it issues for subscription or purchase to any interested member of the general public.  All public funds registered must publish a prospectus and file it with the International Financial Services Authority. There are no capital adequacy requirements or minimum subscription limits placed on public funds.  Also they must maintain accounting records and financial statements.  Public funds that intend to do business with residents must also submit an offering document synopsis to the International Financial Services Authority.

Private and accredited funds is the other category of license recognized by this Act. A private or accredited fund is a mutual fund that either has no more than fifty investors or issues shares on a private basis. An accredited fund issues shares only to accredited investors, with an initial investment of not less than USD 25,000. An accredited investor is one who has a net worth in excess of USD one million.

All applications to carry on business, as a Public Fund or Private Fund must be submitted to the St. Vincent and the Grenadines International Financial Services Authority to the attention of the Registrar of Mutual Funds.

Insofar as administrators and managers are concerned, they are required to apply to the Authority for a license to carry on business as administrators or managers.  The Act provides that a natural person, any mutual fund, company, trusts or trustee may apply for a license to carry on business as administrators or managers. Applicants must show evidence that they have or have available to them expertise and resources necessary to carry out the business proposed. The applicant must meet standard fit and proper requirements.

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Important Facts on the St. Vincent and the Grenadines International Banking Sector

Saint Vincent and the Grenadines has always provided a sound economic climate for international banks. There are presently some six  international banks licensed in St. Vincent and the Grenadines.

The International Banks Act of 1996 and Regulations govern the registration of international banks.