Registering a Foreign Company in Grenada as an External Company

Foreign companies that win work in Grenada, from building a hotel or supplying a government project to providing consultancy, insurance or technical services, often do not want to form a new local subsidiary. The Companies Act allows a company incorporated elsewhere to register in Grenada as an external company and carry on business there in its own name. The registration is handled by the Corporate Affairs and Intellectual Property Office (CAIPO) in St George's.

Registering is mostly a matter of assembling the right foreign documents, properly authenticated, and appointing someone in Grenada to act for the company. What catches companies out is the time it takes to obtain and certify documents abroad, and the tax, labour and licensing registrations that follow. This article walks through the process and the obligations that come after. Requirements and fees are revised periodically, so confirm current details with CAIPO and a Grenadian attorney.

When registration is needed

As a general principle in Eastern Caribbean company law, a foreign company that carries on business in the country must register as an external company. Carrying on business usually means having a place of business, employing people, entering contracts locally or performing work on the ground over a period, rather than simply selling into Grenada from abroad or making occasional visits.

The line between occasional dealings and carrying on business is not always obvious. A foreign consultant visiting for a week to advise a client is in a different position from an engineering firm with staff on site for a year. Contractors on public projects are often required by the contract terms to register locally.

Operating without registering can have consequences: difficulty enforcing contracts in Grenadian courts, penalties, problems with work permits and tax registration, and refusal by banks to open accounts. Getting advice early on whether your activity counts as carrying on business is cheaper than fixing the position later.

Registration is also often a practical condition for other steps. Work permit applications for foreign staff, tax registration, VAT registration and the opening of a local bank account generally require the company to be registered first, so delaying registration tends to hold up everything else on a project timetable.

Documents typically required

CAIPO will specify the exact forms, but external company applications commonly require the following. Foreign documents often need notarisation and an apostille or consular legalisation:

• A certified copy of the certificate of incorporation or equivalent from the home registry.
• Certified copies of the constitutional documents, such as articles or bylaws, with translations into English if needed.
• A recent certificate of good standing from the home jurisdiction.
• Details of the directors and, increasingly, of the beneficial owners who ultimately control the company.
• The address of the principal place of business in Grenada.
• A power of attorney appointing a person resident in Grenada to accept service of documents and act for the company.
• The completed CAIPO application forms and the registration fee.

The usual sequence

Planning the steps in order avoids repeated trips and courier costs. Most companies move through a sequence like this:

1. Confirm with a Grenadian attorney that external company registration is the right route, rather than incorporating a subsidiary.
2. Check that the company's name is available and acceptable for registration in Grenada.
3. Gather corporate documents from the home registry and have them certified, notarised and apostilled or legalised as required.
4. Execute the power of attorney appointing the local agent, with the same authentication if signed abroad.
5. File the application with CAIPO and pay the fees; respond to any queries.
6. Receive the certificate of registration as an external company.
7. Register with the Inland Revenue Division for tax, and for VAT if turnover will exceed the threshold.
8. Register as an employer with the National Insurance Scheme before any staff are employed, and apply for work permits for non-national staff.
9. Open a local bank account, which will require the registration documents and due diligence on owners and directors.

The local agent and registered address

The person appointed under the power of attorney is the company's representative in Grenada for legal purposes. Documents served on that person are treated as served on the company, so the agent must be reliable and reachable. Many foreign companies appoint their Grenadian attorney or a professional corporate services provider rather than an employee who may leave.

The agent's authority should be defined carefully. A broad power of attorney may allow the agent to sign contracts or deal with assets, which may be more than the company intends. A narrow power limited to accepting service and dealing with registrations reduces risk, while a separate power can be given to a manager for operational matters.

Changes to the agent, the principal place of business, the directors or the company's constitution generally need to be notified to CAIPO within set time limits. Keep a calendar of these obligations, because missed notifications are a common source of penalties and problems with certificates of good standing.

Tax, labour and licensing after registration

Registration with CAIPO is only the first step. An external company carrying on business in Grenada is generally liable to tax on profits attributable to its Grenadian operations. It must register with the Inland Revenue Division, file returns, and register for VAT where its taxable supplies exceed the threshold. If it pays staff, it must operate PAYE and pay National Insurance contributions.

Payments the branch makes to its foreign parent, such as management fees or interest, may be subject to withholding tax and to rules on what can be deducted in Grenada. How branch profits are taxed at home depends on that country's law and on any tax treaty. Grenada's network of comprehensive tax treaties is limited, and the CARICOM double taxation agreement applies among member states. Confirm the position with tax advisers in both countries.

Sector licences may also apply. A company providing insurance, financial services, telecommunications or certain professional services needs a licence from the relevant regulator in addition to registration. Construction firms on public projects may need to be registered with the relevant ministry.

Working with banks and Customs as a branch

Grenadian banks treat an external company as a foreign corporate customer. Expect them to request the CAIPO registration, the parent's constitutional documents, a recent certificate of good standing, details of directors and beneficial owners, a description of the Grenadian activity and evidence of the contract or work that brings the company to Grenada. Approval can take several weeks, so apply as soon as the registration certificate is issued.

If the branch will import equipment or materials, it will deal with the Customs and Excise Division, usually through a licensed customs broker. Equipment brought in temporarily for a project may be eligible for temporary importation arrangements or for concessions linked to the project; agree the treatment before shipping rather than at the port.

Keep all of this paperwork consistent with the CAIPO record. Banks and Customs check names, addresses and authorised signatories against the registration, and mismatches are among the most common causes of delay.

Pitfalls and how to avoid them

Late document collection. Obtaining certified documents, good-standing certificates and apostilles from some countries can take weeks. Start immediately after deciding to register, and check how recent CAIPO requires the good-standing certificate to be.

Inconsistent names. The company name must appear identically on every document, bank form and invoice. Small differences in punctuation or abbreviations cause queries with banks and Customs.

Forgetting the end of a project. When a project finishes, the company should close its tax and NIS accounts properly and deregister as an external company, rather than leaving obligations running. Unfiled returns continue to generate penalties.

Assuming branch status avoids local rules. Employment law, health and safety requirements, work permits and tax all apply to a branch just as they do to a local company. Take advice from a licensed Grenadian attorney and accountant before work begins.

Frequently asked questions