Capital Gains Tax in Grenada | Rules for Investors

Understanding Capital Gains Tax in Grenada: Does It Exist?Copy link to section

Grenada does not levy a capital gains tax. There is no standalone charge on profit realised when you sell shares, bonds, business interests, or real property, and no provision within the income tax framework imposes such a tax. This position is confirmed by the Grenada Inland Revenue Division, whose published list of tax types names income tax, corporate tax, VAT, withholding tax, property tax, and property transfer tax, with no capital gains tax among them.

The absence applies to residents and non-residents alike. For a foreign owner or investor weighing a holding in the country, this means a disposal generates no profits-based tax event of the kind common in higher-tax jurisdictions.

This article explains what that absence means in practice, the adjacent charges that can still apply on certain transactions, and how companies and non-residents are treated on asset disposals. It is most relevant to foreign investors, real estate buyers, and participants in the citizenship-by-investment route.

The Legal Basis for the Absence of Capital Gains Tax in GrenadaCopy link to section

No Capital Gains Tax Act exists, and no section of the income tax legislation creates a charge on realised gains. The country operates a territorial tax system, under which income is generally taxed only where it is earned or sourced locally, and global income falls outside the net.

What does exist are transaction and ownership taxes on real property, which are sometimes mistaken for a capital gains charge. The Property Transfer Tax sits under Act No. 37 of 1998, and the annual Property Tax under Act No. 2 of 1997. Neither taxes gain; one taxes the transfer event, the other taxes ownership.

The distinction matters because it shapes what you actually pay on a disposal. A profits-based tax measures the difference between purchase and sale price; the charges that apply here are measured on gross value, not on the gain you make.

Grenada's standing under international standards reinforces the durability of this framework. The European Commission removed the country from its tax haven blacklist in 2018, confirming cooperation with disclosure norms despite the absence of a capital gains charge.

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What "No Capital Gains Tax" Means When Disposing of AssetsCopy link to section

For an individual, selling shares, bonds, a business interest, or other capital assets triggers no standalone tax. There is no holding-period rule, because no regime exists to distinguish short-term from long-term gains.

For companies, the position is different in form rather than name. A gain on a disposal that is treated as ordinary business income is folded into taxable profit and taxed at the corporate income tax rate, rather than under a separate capital gains heading.

One feature that helps foreign-owned structures: there are no Controlled Foreign Company rules. A resident who owns an offshore entity is not pulled into local taxation on that entity's retained income, which preserves flexibility for cross-border holding arrangements.

Treatment of Gains on the Sale of Real Property (Property Transfer Tax as the Effective Charge)Copy link to section

Real property is where a disposal does attract a charge, though not on the gain. The Property Transfer Tax is levied on the sale price or the property's market value at the time of sale, whichever applies, not on the profit between purchase and resale.

The rate depends on who is selling. A citizen pays 5% on a sale; a non-citizen pays 15%. A non-citizen buying property pays a separate 10% charge through the Alien Landholding Licence.

Transfers by means other than sale are also caught. A transfer by deed of gift is taxed on value above EC$150,000, while a transfer that is not by deed of gift is taxed on value above EC$20,000. The term covers any transfer of an estate or interest in property, whether by sale, exchange, gift, or other disposition between living persons.

The annual Property Tax is a separate, ownership-based levy reaching up to 0.8% of market value. For residential property, it is assessed at 0.20% on land value and 0.30% on the building. Demand notices issue from 1 January, with a 5% discount available where half the tax is paid by 31 March and the balance by 30 June.

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How Gains on Asset Disposals Are Treated for Companies and InvestorsCopy link to section

Because no separate capital gains charge exists, a company's gain on disposal is generally treated as part of taxable income. The corporate income tax rate then applies to that profit in the ordinary way.

The headline corporate rate is reported at 28% on net income for resident companies, with non-resident companies taxed only on profit sourced within the country. Sources differ between 28% and 30%, so confirm the enacted figure with the revenue authority before relying on it for a transaction.

Returns are due by the end of the fourth month after the close of a company's fiscal year. Withholding tax of 15% applies to dividends, interest, and royalties paid to non-resident companies, a point that can matter when gains are extracted as distributions rather than retained.

Entities incorporated as international business companies sit outside this picture entirely, with exemption from corporate income tax, capital gains tax, and withholding tax on dividends. The result is that, for many foreign-owned structures, a disposal gain carries no domestic tax cost at all.

Capital Gains and Non-Residents Disposing of Grenadian AssetsCopy link to section

A non-resident selling locally situated shares, bonds, or business interests faces no specific capital gains charge. The absence of the regime applies equally to residents and non-residents for those asset classes, so the disposal itself is not a taxable event.

Real property is the exception. A foreigner selling local real estate pays the 15% Property Transfer Tax, which is the principal charge on a non-resident property disposal.

Other sourced income remains within reach of local tax. Where a non-resident earns income from a local source, withholding tax applies at 15%, and non-resident companies are taxed on locally sourced profit.

For cross-border planning, the treaty and transparency position is worth knowing. Grenada holds double taxation treaties with the United Kingdom and with fellow CARICOM members, and it exchanges financial account information under both the Common Reporting Standard and FATCA, having begun CRS reporting in 2018 and signed its FATCA agreement in 2016.

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Narrow Exceptions and Adjacent Charges That Fall Within the Capital Gains ScopeCopy link to section

A handful of charges occupy the space a capital gains tax would otherwise fill. None taxes gain directly, but each can apply when you dispose of or acquire an asset.

• Property Transfer Tax (Act 37/1998): the closest functional equivalent for real estate, charged on gross sale price at 5% for citizens and 15% for non-citizens.
• Stamp duty: 1% of market value on a property sale.
• Alien Landholding Licence: 10% of property value, payable by a non-resident buyer to acquire real estate legally.
• Corporate income folding: where a company's disposal gain is treated as ordinary income, the standard corporate rate applies rather than any discrete capital gains charge.

Investors acquiring qualifying real estate under the citizenship-by-investment route are not required to obtain the Alien Landholding Licence. Sector incentives can reduce the corporate exposure further, with eligible investments in tourism, agriculture, and manufacturing qualifying for income tax exemptions of up to 15 years.

No wealth tax, inheritance tax, estate tax, or gift tax applies, beyond the transfer tax thresholds that attach to gifted property.

Implications for Investors, Real Estate Buyers, and Citizenship-by-Investment ParticipantsCopy link to section

For a portfolio investor, the headline is straightforward: profit on the sale of investments or property is not taxed as a gain. You can exit a holding without a profits-based charge, which is the main draw for capital-focused structures.

Real estate buyers should budget for transaction costs rather than a gains tax. On a sale, a citizen pays 5% transfer tax and a non-citizen pays 15%; a non-citizen buyer obtains the landholding licence at 10%; stamp duty adds 1%. Legal fees commonly run 1% to 2% of the purchase price and agent commissions around 5%, each subject to 15% VAT.

The citizenship-by-investment route changes this arithmetic. Participants buying qualifying real estate are exempt from the landholding licence and from transfer taxes on the qualifying purchase, which removes the charges a standard foreign buyer would otherwise meet.

The programme came into force under the Grenada Citizenship by Investment Act, 2013. The minimum qualifying real estate investment is USD 220,000, held for a mandatory five-year period.

Outlook: Will Grenada Introduce a Capital Gains Tax?Copy link to section

No publicly announced legislative proposal or government consultation to introduce a capital gains tax has been identified. The framework has held without such a charge, and external pressure to add one appears limited.

Removal from the European Commission's blacklist in 2018 suggests the existing system is considered sufficiently transparent, reducing any incentive to adopt a capital gains tax as a condition of market access. Participation in the Common Reporting Standard, with reporting since 2018 to more than 100 partner jurisdictions, addresses transparency concerns through information exchange rather than a structural gains tax.

The country is not an OECD member, and the OECD/G20 Pillar Two minimum tax targets multinationals with revenues above EUR 750 million without requiring any domestic capital gains charge. For most foreign-owned entities, this places no near-term obligation on the local framework.

Plans can change with fiscal need, so monitor the annual budget statements and revenue authority legislative releases for any future proposal.

ConclusionCopy link to section

For a non-resident owner, the absence of a general capital gains tax removes a layer of friction that exists in many comparable jurisdictions, but the property transfer tax on real estate disposals means that the most common transaction type still carries a measurable charge. That single asymmetry, gains on most assets untaxed while property sales are caught by an adjacent levy, is the fact that should anchor any structuring decision made today.

The more forward-looking question is whether the current treatment holds. Given that the outlook section of this article leaves room for change, a non-resident with material Grenadian assets would be better served stress-testing their position against a potential future charge now, rather than reconfiguring after any shift in policy takes effect.

How Expanship Can Help Your Business in GrenadaCopy link to section

Expanship advises foreign owners on how the absence of a capital gains tax affects a disposal, and on the transfer tax, stamp duty, and corporate income rules that can still apply, then supports the wider compliance work a foreign-owned entity needs locally.

• Company formation and entity structuring
• Registered agent and registered office services
• Tax registration and return filing
• Ongoing compliance and statutory maintenance
• Accounting and bookkeeping
• Introductions to local banking partners

To discuss your situation and the right structure for your goals, contact Expanship Grenada.

Frequently Asked QuestionsCopy link to section