Antigua and Barbuda welcomes foreign investment and provides a hospitable environment and generous incentives to encourage such investment.

The government is keen to assure investors that their investments are secure and well protected. Therefore, Investment Protection Agreements have been signed with the Federal Republic of Germany (For the text of the Treaty with Germany, click here.), and with the United Kingdom (For the text of the Agreement with the UK, click here).

In a world of coups and crises Antigua and Barbuda is a paradise for the businessman. It has both a pleasantly tropical climate throughout the year and a long tradition of political stability based on parliamentary democracy.

While the Government intervenes in the economy as a regulator in some instances, the private sector is the dominant force in the economy. The government and the ruling United Progressive Party (UPP) are committed to upholding the principle of free enterprise and this pledge is shared by the main political parties. Successive governments have respected the agreements and commitments made between previous administrations and investors.

No investor has ever had assets nationalised or been forced to leave the island. Under the island's constitution, property can only be nationalised in exceptional circumstances and even in such cases the country's constitution demands that fair compensation must be determined by an independent authority and must be paid promptly. This constitutional requirement is unusual in developing countries and casts Antigua and Barbuda in a very attractive light for investment.

The legal basis for Antigua and Barbuda's tax holidays for investors is codified on the Fiscal Incentives Act. The length of the 'holiday' depends on the amount of value added in Antigua and Barbuda. The definition of local value added is the amount realised from the sales of the product over a continuous period of 12 months, minus:

a) Cost of imported raw materials, components, parts of components, fuels and services;

b) Wages and salaries paid to foreign nationals;

c) Profits and dividends distributed to foreign nationals;

d) Interest, management charges and other income payments to not-residents (including companies);

e) Depreciation of imports of plant, machinery and equipment.

The government offers numerous concessions to investors, particularly if the investment is substantial. Typical concessions include:

* Freedom from the payment of Corporate Tax on the profits arising out of the profitable operations of the company for a period of 15 years in the first instance which is eligible for renewal for a further 15 years;

* Waiver of all import duties on consumption tax on the importation of materials and equipment used in the operations of the company;

* Grant of an export allowance in the form of an extended tax holiday on the exportation of goods produced in Antigua and Barbuda;

* The right to repatriate all capital royalties, dividends and profits free of all taxes or any other charges on foreign exchange transactions. The government allows a company to import a standby electricity generator free of all import duties and consumption taxes. All office equipment and vehicles to be used in the company's operations can be imported free of duty and consumption taxes. The government grants all work permits and the necessary residential status to all expatriates who are key to a company's operations.

Below is a description of the investment opportunities and benefits:

Investor considerations * English speaking. * Stable government. * Good communications. * Development potential. * Currency tied to US Dollar Business environment * Private sector predominates. * Generous incentives for economic development. * Good labour relations. * Membership in trade blocs. * Tourism of primary importance. * Growing financial services industry. Foreign investment and trade opportunities * Tax holidays and ready repatriation of capital and profits. * Positive attitude of local persons and businesses. * Preferential trade agreements. * Good international communications. Investment incentives * A tax holiday of 5 to 15 years is available, with a 5-year extension under certain circumstances. * Companies incorporated under the international Business Corporations Act 1982 enjoy a wide variety of incentives. * Export-oriented businesses are eligible for tax rebates. * Relief is given from customs duties and other indirect taxes. * Exemption from exchange control regulations is possible. * A guaranteed number of work permits are provided for foreign nationals. * Trade bloc memberships include: Caricom, Lome Convention, CBI, and Caribcan. Restrictions on foreign investment and investors * Capital and earnings can be repatriated. * Hundred per cent foreign ownership is permitted. * A wide range of enterprises is available for investment. * Joint ventures with local persons are encouraged but are not essential. * An exchange levy of 1 per cent is charged on outward movements of currency unless exemption has been given. * Local borrowings by a foreigner are subject to a 3 per cent stamp tax unless exemption has been given. * Land purchases require an alien landholder's license. Regulatory environment * Price controls are imposed on staple goods. * Licences are required for certain operations. * Most goods may be freely imported under an open general license. Banking and finance * Full commercial banking services are available from international banks. * Centre for offshore financial services, including banking, insurance and trust operations. * Exchange Control approval is required for local borrowing by non-citizens. 'Doing Business in Antigua and Barbuda' is an information guide published in 1991 by Price Waterhouse

Exporting to Antigua and Barbuda - tips for exporters * Few restrictions are imposed on imports. * Customs duty exemption is available for new hotels and approved industries. * The services of a local agent are desirable to obtain speedy customs clearance. Business entities A locally incorporated company in Antigua is the most common vehicle for foreign investment, and often this is the most tax-efficient method. A branch of a foreign corporation can cause tax problems in the home territory. Capital requirements The minimum share capital is EC$2. There is no maximum. Founder's requirements Two subscribers are required to form a private company; a public company requires five. Company formation is a very simple matter, requiring the drafting of a memorandum and articles of association and filing these with the Registrar of Companies. The cost is approximately EC$1,000 (US$370). Foreign ownership/Participation in Management Once approval for the project has been obtained, a foreigner may be a director. Employees may serve as directors at the discretion of the shareholders. Repatriation of funds Normally consent would be obtained from the outset. Provided any relevant taxes have been paid, Exchange Control approval will be given to remit profits in normal circumstances. Liquidating an investment This involves the appointment of a liquidator, who would normally be an accountant or lawyer, to wind up the co affairs. If a company owned land and a non-citizen wished to buy, an alien landholder's license would be needed. Tax considerations Incorporated companies pay tax at 40% of profits. Businesses that are not incorporated pay a 2% tax on gross income. Companies and businesses can deduct justifiable directors' fees and proprietors' salaries in arriving at a taxable profit. The tax advantage of the local company is that if a tax holiday is given, profits may be accumulated and not necessarily taxed in the country in which the foreign shareholders reside until distributed as dividends. This is not always the case, of course, and depends on the tax laws of the country concerned. Professional advice It is essential to discuss the matter in detail and in advance with the investors' own tax advisers and with local tax advisers to ensure a tax-efficient structure. Labour relations and social security * All levels of staff are available locally, but skilled labour is not plentiful. * Employer-employee relations are simplified by the Labour Code and the Industrial Court Act. * Social security and medical benefit schemes are in operation, but there are no unemployment benefits. Tax system * The bulk of government revenue comes from indirect taxation. * Resident individuals are not assessable to a personal income tax. * Capital gains not subject to taxation. * Tax incentives are available. Taxation of corporations * Capital gains are not subject to taxation. * Withholding taxes are levied on certain overseas payments, including management fees. * Restriction is placed on losses available for carry forward. * A wide range of industries qualify for tax concessions. * Tax holidays of up to 15 years (with five-year extension possible) are available for qualifying business. * Companies involved in banking pay a 3% tax on gross income. That is, interest income and fees derived from the operations and investments of the banking business minus interest expense. * Companies involved in internet gaming, sports books and virtual casinos pay a 3% tax on gross handle. That is, gross take-in minus payouts to clients on bets. Taxation of individuals * Basically, residents have their permanent place of abode in Antigua or are present in Antigua for 183 days in a year. * If expatriates arrive late in a tax year but are resident in the following year, they qualify as resident in the year in which they arrive. The same rule applies when they leave.