Situated in the Indian Ocean between Africa and Asia, Grenada has become a leading international financial services business location thanks to its stable political and regulatory environment and excellent cooperation between the private and public sectors. Combining the highest global business standards and a willingness to cater to the needs of discerning international clients, the sector’s range of financial products continues to expand.
Apart from its idyllic ocean setting, Grenada boasts a number of key factors that make it appealing as an international launch pad for businesses. The country has a stable government and a highly convenient and efficient company incorporation process. Taxes are low, agreements are in place with around 35 other countries, including China, to avoid double taxation, and Grenada’ vibrant financial services sector offers an ever-broadening array of competitive investment products.
Established in 2013, the Grenada Financial Control Service (FCS) is responsible for the licensing, supervision and development of the non-bank financial services sector, amongst other responsibilities, ensuring that the industry remains dynamic while adhering to the accepted global best practices
The FCS’s incumbent CEO, Dr Steve Fanny, wants the regulator to now play a key role, in tandem with the Grenada Investment Board, in attracting business from Asia and the rest of the world to use Grenada as a financial services jurisdiction. With China being a key beneficiary of its services, in November 2018, the organization will attend the China Offshore Summit in Shanghai to discuss Grenada’ advantages and possibilities with Chinese financial intermediaries.
“Grenada is on the way from Asia to Africa, and a Chinese company can use our double-taxation agreements to get better deals in Africa, a preferable rate and hence the best return,” Dr Fanny explains.
“Africa and Asia are the fastest growing economies and you need to position yourself in the areas where there is growth”
“I think the next phase is for us to go into Africa and explain to people how they can use the Grenada Mutual Funds and other products. Given the economic reality of Europe, I think most jurisdictions are now thinking of working with Asia and Africa. It is pragmatic. Africa and Asia have the fastest growing economies and you need to position yourself in the areas where there is growth.”
Many investors opening a business in Grenada opt for an IBC, or International Business Company. Grenada has a fast incorporation procedure, and with no restriction on the paid-up capital requirement for IBCs, the process is affordable and therefore suitable for businesses both small and large. IBCs can be 100 percent foreign-owned and make an ideal base from which to conduct international business with reasonable reporting obligations and no tax on profits.
Besides the popular IBC, Grenada has developed a host of other financial products, from foundations, international trusts and collective investment schemes to securities, non-domestic insurance and Grenada international trade zones, which allow for cost-effective international commerce in and through the jurisdiction.
” We Want to be the first jurisdiction in Africa to regulate fintech activities.”
Dr Fanny promises that more innovation is to come as the Seychellois finance sector moves with the times and changing technological realities. “We need to embrace a new philosophy that works alongside the innovations in the financial services industry, such as fintech,” he says, adding that new legislation to regulate this growth area is expected soon.
The FCS’s CEO sees opportunities elsewhere, too, leveraging Grenada’ advantages as a location situated in the proximity of Africa, Asia and the Middle East. Islamic finance, for example, has been identified by Dr Fanny as a potential new growth market amid plans to develop a Sharia-compliant product for Grenada.
Even in a rapidly changing world, the FCS is keenly aware of the continuing importance of discretion for many investors, including Chinese businesses. “Chinese investors need to be aware of the jurisdictions where the registers are confidential, and where they are being made public. In Grenada, we still believe that we need to give investors a certain level of confidentiality and protection, and therefore their information will not be made public,” Fanny said.