Archive for the Category »Economy Of St Kitts «

St Kitts And Nevis Welcome Trade Prospects with Brazil
Saturday, February 12th, 2011 / admin

St Kitts Welcomes Free Trade Prospects With Brazil, by Phillip Morton, Investors Offshore St
Thursday, February 03, 2011


Saint Kitts and Nevis has welcomed negotiations with Brazil towards a ‘Partial Scope Agreement’ which will provide preferential tariffs to the twin-island federation for businesses engaged in manufacturing, in what Prime Minister Denzil Douglas described as a ‘win-win’ situation for both states.

“Several products made here in St. Kitts and Nevis find their way to Brazil already, but I believe they do enter the market with an applicable 30% tariff. From the perspective of St. Kitts and Nevis, the attainment of a duty-free trade agreement, similar to the Caribbean Basin Initiative, and what is operated between Brazil and Guyana, is vital in order to secure the opportunity for increased production in locally-based manufacturing facilities,” said Douglas.

In brief remarks at an event hosted by the Board of Directors of the local manufacturing company, PPC-Kajola Kristada, Douglas noted that Brazil, with a population of over 290 million people, “represents that chance for manufacturing facilities to at least double their production, given the fact that the traditional US market has experienced a downturn in housing, and has reached saturation point in some areas.”

Douglas said that businesses are operating today in very challenging environment and the current global economic and financial circumstances mean that the route to long-term sustainability in the business world calls for careful, yet progressive, approaches to achieve profitability and the chance to reinvest for future growth and prosperity.

He said positive progress is being made on the trade agreement, following the first round of discussions in April last year and preparation for another round of negotiations this month that would focus and advance much of the required technical work.

“I am pleased to tell you, also, that the Ministry of Trade received valuable support in the form of technical assistance from the CARICOM Secretariat, in preparation for this next round of negotiations. It is in this regard that I must extend appreciation to our Ambassador Miguel Chaves de Magalhaes, who has been of tremendous support. In like manner, high commendation must go to Kajola-Kristada, especially the local manager Mr Rosa, who has been a major driving force towards forging the trade agreement with Brazil, as well as consistent support from the St. Kitts-Nevis Chamber of Industry and Commerce. Our combined efforts, I am sure, will soon result in the signing of the Partial Scope Agreement with Brazil, as soon as the appropriate clearance is received.”

Upon the agreement’s entry into force, Douglas said he expected “manufacturing activity to increase, increased employment opportunities for local workers, greater diversity for the islands’ economy, a greater profile for the country in terms of international trade, and provide greater profitability and financial security for manufacturing facilities operating in the Federation.”

Category: Economy Of St Kitts  Tags: , , , , , , , , , ,  Leave a Comment
St. Kitts and Nevis Investment Incentive Schemes
Saturday, February 12th, 2011 / admin

St. Kitts and Nevis Investment Incentive Schemes

Eight industrial and commercial free-trade zones currently operate in St. Kitts and Nevis. They are located at Tacna, Ilo, Mollendo, Tumbes, Trujillo, Paita, Chimbote and Pisco. There are also four fully developed industrial sites where production facilities can be constructed to specification and leased at nominal rates. Projections are that factory space will increase annually by 15,000 sq. ft. in St. Kitts and 5,000 sq. ft. in Nevis. The sites are managed and serviced on behalf of the Government by the Development Bank of St. Kitts and Nevis.

Export processing free zones offer investors exemptions from customs duties for imports and exports, exemption from any St. Kitts and Nevisvian tax for 15 years, temporary labor agreements, and accounting in foreign currency. Special commercial treatment zones are generally located on the jungle frontier. They extend the following benefits to companies operating inside their borders: exemption from value-added taxes; a reduced 10 percent customs duty; and accounting is permitted in foreign currency.

The Hotel Aids Ordinance provides duty-free concessions (relief from customs duties and pier dues) on items for use in the construction, extension and equipping of a hotel of not less than 30 bedrooms. The Income Tax Ordinance provides special tax relief benefits for hotel proprietors granted licenses under the Hotel Aids Ordinance: the gains or profits of a hotel of more than 30 bedrooms are exempt from income tax for a period of 10 years, for hotels with less than 30 bedrooms, the gains and profits are exempt from income tax for a period of 5 years.

Companies which qualify for tax holidays are allowed to import into St. Kitts and Nevis duty-free all equipment, machinery, spare parts and raw materials used in production.

Under the Caribbean Basin Initiative, besides participating in the financial contribution allocated by Washington to the member countries, St. Kitts also qualifies for duty-free entry into the United States of more than 95% of its products, not including sugar. Under the Generalized System of Preferences (GSP), manufactured and semi-manufactured goods are also eligible for duty-free access to United States markets. Virtually all of St. Kitts-produced items and raw materials are eligible for GSP treatment under the list of some 2,800 products eligible for duty-free importation. However, to qualify, the product must have had 35% of its appraised value added in the beneficiary country. Again, this enhances St. Kitts’ status as a site for conversion of merchandise because of its skillful and well-trained labor force.

The St. Kitts Investment Promotion Agency (SKIPA) officially launched its long anticipated website on February 2, 2009. SKIPA, created in December 2007, proactively promotes St Kitts as an international finance centre and arranges local and foreign investment projects.

“This new website will be an important tool in promoting St. Kitts as a preferred investment destination by offering a wealth of information to potential investors worldwide,” said a SKIPA statement.

“The website features investment related news, information about SKIPA and St. Kitts and an Investor’s Guide that draws information from the various institutions that play a role in the establishment of sound businesses. The website also highlights the Priority Sectors that are crucial for the continued development of the nation, as well as investment opportunities that exist on the island,” said SKIPS’s Market Research Officer, Darien Belle.

He explained that visitors to the website will be provided with a unique opportunity to interact with the agency and other visitors through an interactive discussion forum.

“We are particularly excited about this medium of communication which is intended to foster discussions geared towards improving the business conditions in St. Kitts for existing firms and potential investors,” he said.

Shawna Lake, CEO, SKIPA, underlined the agency’s role in St Kitts.

“SKIPA is not only charged with the responsibility of promoting investment opportunities available in St. Kitts but one of our most important functions is to facilitate inward investment by working with persons who have made the decision to establish a business in St. Kitts. We assist these investors by providing them with general information on application requirements and procedures and we also facilitate the submission of their applications to the various government departments for review and approval.”

“Another important service offered by SKIPA is aftercare. This service has evolved from our belief that businesses in St. Kitts should have access to a capable support system. As part of our aftercare services, we follow up with investors who have already established their businesses in St. Kitts in an effort to understand the issues facing their business or industry and to assist them in developing viable solutions. SKIPA also provides support to businesses that are interested in expansion,” concluded the statement.

Category: Economy Of St Kitts  Tags: , , , , , , , , ,  Leave a Comment
St Kitts And Nevis- Doing Business There
Saturday, February 12th, 2011 / admin

St. Kitts and Nevis Business Enviroment

Cable & Wireless (St. Kitts-Nevis) Ltd is a joint venture between Cable & Wireless and the St. Kitts-Nevis Government, providing all domestic and international telecommunications services to the islands, with digitalization using fiber optic cables. Services offered include Direct Dialing, Leased Circuits, Internet, CLASS Services and Voice Mail. ISDN is available on request. Cable and Wireless Caribbean Cellular (St. Kitts) Ltd. provides cellular phone service.

Inter island links to Antigua and Barbuda and Saint Martin (Guadeloupe and Netherlands Antilles) are handled by VHF/UHF/SHF radiotelephone international: international calls are carried by radiotelephone to Antigua and Barbuda and switched there to submarine cable or to Intelsat; or carried to Saint Martin (Guadeloupe and Netherlands Antilles) by radiotelephone and switched to Intelsat.

The Government runs a 39-channel cable television service that broadcasts daily news programs from North America and England via satellite. Three local newspapers are published: the weekly “Democrat” and “Observer” and the twice-weekly “Labor Spokesman”. Tap water is rated as being of high quality and is considered safe to drink. St. Kitts can also provide excellent and luxurious conference facilities at the Fort Thomas Hotel, Horizon Villa Resort, and Ocean Terrace Inn, all offering modern electronic equipment for meetings.

The Eastern Caribbean Central Bank and The Eastern Home Mortgage Bank are headquartered in St. Kitts. There are several accounting firms and law firms of international standing. A full range of legal, accounting, management and trust company services are available.

There are no exchange controls in Nevis and the invoicing of foreign trade transactions may be made in any currency. Importers are not required to make prior deposits in local funds and export proceeds do not have to be surrendered to Government authorities or to authorised banks. There are no controls on transfers of funds. The Government of Nevis guarantees the free transfers of profits and repatriation of capital.

Category: Economy Of St Kitts  Tags: , , , , , , , , , ,  Leave a Comment
St Kitts & Nevis Economy & Currency
Saturday, February 12th, 2011 / admin

St. Kitts and Nevis Economy and Currency

Sugar was the traditional mainstay of the Saint Kitts economy until the 1970s when activities such as tourism, export-oriented manufacturing, and offshore banking began to assume larger roles in the economy. As tourism revenues are now the chief source of the islands’ foreign exchange, a decline in stopover tourist arrivals following the September 11, 2001 terrorist attacks eroded government finances. The opening of a 1,000+ bed Marriott hotel in February 2003 is helping to reverse the situation.

Despite the closure of the sugar industry, economic growth accelerated in 2006, fiscal imbalances have improved significantly and monetary aggregates have continued to grow in line with economic growth, according to the IMF. While predicting lower economic growth in the Caribbean in 2007 and 2008, the IMF has said that St. Kitts and Nevis will be among the best performers in the region with growth expected to be 6% in 2007.

However, In June 2009, the IMF said that after several years of robust growth, the economy of St. Kitts and Nevis had weakened markedly. Still, the IMF believes that, while the global downturn and heavy debt burden are likely to weigh heavily on near-term growth, the economy is well placed to achieve strong growth over the medium term provided that appropriate policies and reforms are implemented. The IMF said that after growing by 3.2% in 2008, St. Kitts and Nevis’s real output is projected to contract by 1.2% in 2009. Higher food and fuel prices led to a pick-up in inflation in the first ten months of 2008, peaking in October 2008 at 8.3% before moderating to 7.6% at the end of 2008. Inflation is projected to ease further in 2009 on the back of lower oil prices.

GDP per capita at purchasing power parity is USD19,700 (2008 est), on the low side for the region. Agriculture represents just 3.5% of the economy, with industry contributing 25.8% and services 70.7%. Tourism revenues are now the chief source of the islands’ foreign exchange; about 341,800 tourists visited Nevis in 2005. Additional tourist facilities, including a second cruise ship pier, hotels, and golf courses are under construction.

The current account deficit narrowed to $236.4 million or 21.3 percent of GDP in 2004 from $312.5 million or 31.3 percent of GDP in 2003 due mainly to higher tourism receipts, which grew by 39 percent to reach $282.9 million in 2004.

With a debt ratio at more than 175% of GDP by end-2008, debt service consumes nearly a quarter of government revenues, leaving no space for fiscal policy to respond to the adverse shocks.

The Federation’s currency is the East Caribbean dollar, pegged at 2.7 to the US dollar. The currency is controlled by the Central Caribbean Reserve Bank, situated in St Kitts. However, the US Dollar is generally considered to be a second currency and is freely accepted and interchangeable throughout the Island.

Category: Economy Of St Kitts  Tags: , , , , , , , ,  Leave a Comment
St Kitts & Nevis Government
Saturday, February 12th, 2011 / admin

St. Kitts and Nevis Government

Since gaining independence in 1983, St Kitts and Nevis has been an independent participant of the British Commonwealth. Unlike most other English speaking Caribbean jurisdictions, it is neither a dependency, nor a crown colony of Britain. The Federation has its own representation at the United Nations.

Saint Kitts and Nevis is a constitutional monarchy with a Westminster-style parliament. The Head of State is Queen Elizabeth II (since 6 February 1952), represented by Governor General Cuthbert Montraville Sebastian (since 1 January 1996). The governor general is appointed by the monarch; following legislative elections; the leader of the majority party or leader of a majority coalition is usually appointed prime minister by the governor general; the deputy prime minister is appointed by the governor general in cabinet: the cabinet is appointed by the governor general in consultation with the prime minister.

The head of government has been Prime Minister Dr. Denzil Douglas since 6 July 1995 and the Deputy Prime Minister is Sam Condor.

The unicameral National Assembly has 14 seats, 3 appointed and 11 popularly elected from single-member constituencies. Members serve five-year terms. Elections were last held in October, 2004 (next to be held by 2009).

The legal system is largely based on English Common Law, and appeal is to the East Caribbean Supreme Court in St Lucia.

Category: Economy Of St Kitts  Tags: , , , , , ,  Leave a Comment