Legislation for Foreign Investment Statutes in Countries in the Americas
Comparative Study
ST. KITTS AND NEVIS
1. Legal bases for foreign investment
Objective: Indicate if there is a Foreign Investment Statute and describe it. In the paragraphs below, indicate the legal rank of the norms contained in the Statute, i.e., regulations for expropriation fall under which rank?
1.1 Constitutional
1.2 Legal
1.3 Administrative
2. Concept and subject of foreign investment
Objective: It is essential that both the investor and the nature of the investment be identified, so as to determine to which activity and to whom the regulations will be applied. This is also essential at the international level, especially in case of dispute and arbitration.
2.1 Is foreign investment in your country legally defined or conceptualized?
Yes. Fiscal Incentives Act 1974, Interpretation clause
2.2 Are there registered records or mechanisms to clearly identify both the foreign investor and the nature of the investment?
Yes. Foreign investors have to make application to the relevant Ministry for permission to make the investment.
2.3 Is it possible for a natural person to resort to the foreign investment legislation?
Yes. Fiscal Incentives Act regulations are freely available.
2.4 Is it possible for a citizen or resident to resort to the foreign investment regime?
Yes. As above.
2.5 Can a recipient company funded with both domestic and foreign capital resort to foreign investment regulations? Is this subject to restrictions?
Yes. There is no restrictions.
2.6 Is there a time limit for a foreign investor to be considered as such?
No.
2.7 Are restrictions imposed on the executive body or other staff of an enterprise. Are there nationality quotas? Under what conditions can the executives or other staff hired abroad send their earnings to their country of residence?
No. However companies are encouraged to employ as many qualified as possible.
There are no restrictions on repatriation of earnings.
3. Scope of foreign investment activities
Objective: Define the legal scope of foreign investment in your country, as well as their conditions and limitations.
3.1 Describe the regulating principles of economic activity in your country.
Market System.
a) Describe how economic freedom is guaranteed.
Constitutional guarantee of individual rights and freedom and the protection of property.
b) Is the principle of economic nondiscrimination guaranteed? Describe how.
Yes. The Constitution and laws of the country.
c) Public and private enterprises (local and foreign): do they compete on equal terms, or does the State have higher benefits?
Yes. State enterprises have to compete on the same terms.
3.2 Indicate the scope of foreign investment, i.e., does it include movable and immovable property, assets, concessions, claims to money, intellectual property, industrial property, leasing, technology, etc.
Foreign investment covers all aspects.
3.3 Reserved sectors
a) Indicate the sectors or economic activities reserved exclusively for the State in your country. Explain the regulations pertinent to these areas.
b) Indicate the sectors or economic activities in which only foreign investment is excluded, restricted or limited in your country. Explain in what consists said exclusion, restriction or limitation.
c) Does the Principle of International Reciprocity exist in the legislation of your country?
Yes.
d) Is foreign investment subject to performance requirements?
Approval of foreign investment projects usually include a performance timetable.
e) Can foreign investors take part in the privatization processes of your country?
4. Rights and protection of foreign investment
Objective: Identify the type of treatment granted foreign investment i.e.: its rights, protection and incentives.
4.1 Treatment granted to the foreign investor and the investment.
a) National treatment or Most-Favored-Nation clause ? (Refer to paragraphs 3.1 and 3.3).
Yes. National treatment.
4.2 Protection of Property
a) Constitutional or legal grounds that may lead to expropriation of, or limitations to property.
Failure to comply with the constitution and other laws of the country.
b) How is compensation determined? Which value is it based on? How is it settled?
By a law which specifically outlines a formula of valuation. Final settlements may be by tribunal or Court of Law.
c) Can the authorities take possession of expropriated assets prior to paying compensation?
Yes. Based on a law which sets out the method of valuation and payments.
d) Is property of both corporal and incorporeal assets equally guaranteed?
Yes.
4.3 Transfers of investment, remittances of capital and benefits.
a) Under what conditions may investments in the form of foreign exchange, capital goods, technology, associated credits, etc., be brought into the country? Are there specific regulations for each item?
There are no restrictions of foreign exchange into the country. Most capital goods coming as foreign investments will be duty free.
b) Are there restrictions to the remittances of capital, benefits, debt service, or other remittances derived from foreign investment?
No. Repatriation of income is allowed.
c) Are there different kinds of exchange rates? To which does the foreign investor have access?
No. Domestic and foreign investor operate under the same conditions.
4.4 Taxes and incentives to foreign investment.
a) Explain briefly the taxes that foreign investments are subject to.
Foreign investment is not subject to any special taxes. All investment that does not enjoy fiscal incentives must pay corporate income tax.
b) Are there special tax rules for foreign investment?
Yes. Those set out in the Fiscal Incentives Act 1974 and other laws which are applicable to all investors.
c) Has your country signed agreements with other countries in the Americas to avoid double taxation? If yes, list those countries.
No. Negotiations are in progress with Canada, the United Kingdom and other countries.
d) Are there other incentives to foreign investment, such as access to domestic credit, investment insurance, industrial parks, customs exemptions, etc.?
Yes.
5. Dispute settlement
Objective: Because Bilateral Investment Treaties (BITs) will be part of another study, only an overview of the subject is required here.
5.1 Domestic settlements: Can the foreign investor resort to the same procedures as the national investor? Are there special forms of appeal available to foreign investors? Please describe.
Yes. Appeal is to tribunal and the Court of Law.
5.2 International settlements: Is your country a member of ICSID or other international arbitration mechanisms on the subject of investment?
No.
5.3 Has your country signed BITs with other countries in the Americas? What is the present status of said agreements, i.e., approved, ratified, in effect?
No.
5.4 Where in the juridical hierarchy of your country are international treaties and specifically the Investment Protection Agreements? Analyze your response in relation to the Constitution and domestic laws.
5.5 Do said agreements have "direct effect", that is to say, can they be invoked by the parties directly before the Courts and then applied to the case in question? If not, under what circumstances can they be invoked and applied?
6. National authorities
Objective: To identify the agencies in charge of foreign investment, their organization and functions.
6.1 Is foreign investment handled by specially appointed offices in your country? What is their hierarchical status? How are their actions integrated? What are their main attributions?
Yes. Government Ministries, Finance and Trade & Industry.
The Cabinet of Ministers is the final decision-making organization.