Capital of the Caribbean (part 1)

The Caribbean is obviously a top vacation destination. With crystal waters, white sand, and over 250 days of sun, this secluded niche is a hodgepodge of diverse cultures and economies. In this post I’ll review each destination so that you might pick the best island for your business, your offshore bank account, and your expat lifestyle.

Note that this is a list of recommended countries. It’s not a list of all countries.

The Caribbean is known for its cruise ship destinations, warm weather and variety of island lifestyles ranging from third world (Grenada) to high end hedge fund rich (Cayman Islands). Which of these is the dominant island, the “capital” if you will, comes down to which islands offer the best deals to expats and which islands manages its limited resources most efficiently (I will measure this by GDP per capita).

These clusters of islands are in constant race to become the Capital of the Caribbean. Stretching from the gulf of Mexico to the Atlantic, each island has its unique niche, hopes to attract opening high net worth individuals and businesses.

Some have developed a specific niche. For example, Puerto Rico in banking, Cayman and BVI in hedge funds, Bahamas in insurance, etc. Here’s my review of the islands of the Caribbean.

Ranking of the wealthiest islands in the Caribbean by GDP per capita

6. Saint Vincent and the Grenadines GDP: $0.77billion/ $10,758.00 per capita

Capital of the Caribbean


Saint Vincent and the Grenadines keeps to a seasonal economy with agriculture, small numbers of cattle, tourism, construction and remittances. St. Vincent is the world’s leading producer of arrowroot, these islands are also home to a small offshore banking sector. Along with Belize and Cook Islands, St. Vincent is the “go to” offshore banking jurisdiction for smaller or business accounts. We often open accounts here for Nevis and Belize structures.

Recognized as a lower-middle-income country, the economy is congruent to the island’s  vulnerability to natural disasters.

Historically disputed between France and UK in the 18th century, Saint Vincents was granted independence in 1979. St. Vincent and the Grenadines is a beneficiary of the U.S. Caribbean Basin Initiative. The country belongs to the Caribbean Community (CARICOM), having agreements with the United States to promote trade and investment in the region.

Benefits for investors

  • The Fiscal Incentives Act (income tax credits for the export of approved products)
  • The Duties and Taxes Act (grants relief from duties as requested from individual or organizations)
  • Hotel Aid Act (for hotel expansion which hold no less than 5 guest rooms)
  • There are no industrial parks an no growth potential for online businesses
  • St. Vincent and the Grenadines Small Business Association (up to 15 year tax holiday)
  • Enclave enterprises (producing wholly for extra-CARICOM Markets) have a 15 year tax holiday

5. Trinidad and Tobago GDP: $20.99 Billion, $15,786.00 per capita

Capital of the Caribbean


Islands are independent from UK since 1976, holding a heavy East Indian population. T&T has a solid Gross Domestic Product  per capita – 5th after US, Canada, Bahamas and Barbados. It is a high income economy according to the World Bank.

The country’s strong economy is mainly dependant on petrochemical and liquefied natural gas exports from large oil and natural gas reserves. Also, a member of  CARICOM (Caribbean Community), Trinidad & Tobago benefits from trade alliance among other Caribbean States. Even though Trinidad and Tobago is ranked the wealthiest in 2015, the country fell into a recession recently, caused by the negative fluctuations on international energy prices. As of 2016 their floating exchange regime, one (1) USD is exchanged from 6.43 TTD(Trinidad and Tobago Dollars).

Incentives for wealth preservation

  • Foreign Tax Credits
  • Tax Holidays
  • Fiscal Incentives Act, 1979 (tax exemptions for 10 year for local incorporations)
  • Tourism Development Act 2000 ( Tax exemption for 7 year even hotels)
  • Approved mortgage and other companies ( income exempt from corporate tax)
  • Free Zone (zone with free from withholding tax for corporations and non residents)
  • Other Allowances/incentives
  • Promotional expenses
  • Scholarship allowance
  • Production company allowance
  • Child care/Home work facility
  • Wear and tear allowances
  • Training allowance
  • Allowance for engagement of energy service companies

The following projects can qualify for free zone status:

  • Manufacturing, including assembly
  • Provision of services
  • International trading in products, including regional distribution

We focus on businesses providing a service from T&T to people and companies outside of T&T – the export of services. We can combine this tax deal with the US Foreign Earned Income Exclusion for maximum effect.

4. St. Kitts & Nevis GDP: $0.92 billion, $15,833 per capita

Capital of the Caribbean


in the 1970s, Saint Kitts and Nevis’ economy shifted from sugar to tourism.The government closed the sugar industry in 2005 due to several decades of loss. To compensate for the lack of jobs, the government embarked on the development of programs such as export orientated manufacturing, international trusts and corporations, and offshore banking. Resulting in 20%+ GDP shift in 4 years.

St. Kitts is among other countries in the Caribbean that supplements their economic activity through citizenship programs for foreigners. This program has been under a lot of stress recently. I’m not a fan of their second passport industry, but their structures are solid. See: St. Kitts Second Passport Program Crashes and Burns

St. Kitts and Nevis is a member of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues a common currency (the East Caribbean dollar). The ECCB manages monetary policy and regulates and supervises commercial or domestic banking activities. The US dollar is the existing currency for many business transactions and the EC dollar is pegged to the US dollar.

Note that the ECCB doesn’t oversee all offshore banks. These are typically regulated by the local government. The ECCB is focused on domestic and larger banks.

Incentives for wealth building

  • Fiscal Incentives Act (tax holiday for corporations)
  • Export Allowance (tax concessions effective at the end of tax holiday period, income tax rebate)
  • Exemption of import Duties
  • Hotel Aids Act (relief from customs duties)
  • Repatriation of Profits (repatriate all profits dividends and import capital)

When you research offshore structures, you’ll see Corporations, Trusts, and LLCs are in Nevis and banks are in St. Kitts. St. Kitts and Nevis, sometimes referred to as St. Christopher and Nevis on maps, is one country with slightly different laws on the two islands.

3. Puerto Rico GDP: $103Billion, $25,968 per capita

Capital of the Caribbean

Puerto Rico is a commonwealth territory to the United State. This island governs as colony to the mainland, and was once considered the poorest island in the Caribbean.

Most recent records show that Puerto Rico now has the highest GDP per capita in the Caribbean, driven by exports of pharmaceutical industry, unique tax deals only Puerto Rico can offer, and tourism.

All of this potential and Puerto Rico is in bankruptcy over $73 billion. You’ll find that this list, like all of the Caribbean, is a study in contrasts. Nothing is black and white, it’s all shades of gray. For more on Puerto Rico, see: How to benefit from Puerto Rico’s bankruptcy

If you want to understand the Caribbean, have a read through Don’t Stop the Carnival.

As a tourist destination, Puerto Rico is one the more developed islands. Using both English and Spanish the island is rich in culture and quite diverse.

Incentives for wealth building

Note that Puerto Rico is NOT an asset protection jurisdiction. While the island can offer a unique tax deal, US federal laws apply and thus asset protection is minimal. For more on how to protect the assets of a business in Puerto Rico, see: Asset Protection for a Puerto Rico Act 20 Business.

As you read through #1 and #2 below, keep in mind that Puerto Rico’s economy is about 100 times larger than BVI and 33 times larger than Cayman. I’m ranking by per capita GDP here.

2. British Virgin Islands GDP: $1.09 billion, $42,300.00 per capita

Capital of the Caribbean

The British Virgin Islands has a prosperous economy focused on tourism and financial services. The tourism industry mainly caters to the US therefore the currency used is US dollar since 1959. With more than 600,000 total incorporations and more than 5000 new companies registered every month, BVI is by far the most popular offshore tax haven.

Agricultural activity is limited to raising livestock because of poor soil limiting the ability to meet domestical agricultural development.  

For the last 30 years the government has focused on offshore companies and financial services. In recent years positioned as the 34th, in terms of global financial centers, the BVI was the highest ranking of any offshore financial center in North America.

The adoption of a comprehensive insurance law in late 1994, which provides a blanket of confidentiality with regulated statutory gateways for investigation of criminal offenses, made the British Virgin Islands even more attractive to international business. Many captive insurance companies are registered in the BVI.

Incentives for wealth building

  • Absence of major forms of taxation (no capital gains tax, no gift tax, no sales tax, no profit tax, no inheritance tax, estate duty and no corporate tax.)
  • Tax Residency(BVI incorporated companies are cover under tax exemptions if management and control is exercise the BVI)
  • Tax Return (no requirement to submit tax returns )


1. Cayman Islands GDP: $3.48 billion, $54,827.20 per capita


Capital of the Caribbean

Consumer Resource Guide

Cayman Islands is a British overseas territory characterized by offshore banking of  world’s wealthiest. Known as one the world’s top tax havens, 0% tax rate on income earned by both individuals and corporations, Cayman is great for business if you can afford it. Also, no capital gains, gift  or property tax on this island. Attraction for many high net worth individuals and corporations to incorporate business entities. Islands government main source of revenue comes from indirect taxes as value added tax (VAT) and customs duties. The financial services industry generated $1.2 billion Cayman Island dollars (KYD) in GDP in 2007 which represents 55% of the nation’s economy. Fixed exchange rate regime, whereas one (1) USD can buy KYD$0.82, the Cayman Islands is considered one of the world’s strongest currencies.

For more on setting up in Cayman, see: Move Your Internet Business to Cayman Islands Tax Free.

I hope you’ve found this list helpful in some say. The Caribbean is a study in contrasts. If you have the cash, you might select Cayman as the place to run your business. If you want maximum protection, you might choose Belize or Nevis.

For more on this topic, see Capital of the Caribbean Part 2.