Forming a Limited Liability Company (LLC) in Grenada

Understanding the Limited Liability Company (LLC) in GrenadaCopy link to section

For a foreign owner, the practical starting point is this: the limited liability company in Grenada is the standard private limited company (Ltd.) registered under the general companies law, and it is the vehicle you use when you intend to trade inside the country. It is a separate legal person with limited liability for its shareholders, no minimum capital, and full foreign ownership permitted. This guide explains what the entity is, how it is governed, who runs it, how it is taxed, and what a non-resident investor should weigh before forming one. It is most relevant to foreign entrepreneurs and investors who want a domestic operating or holding company rather than a purely offshore structure.

One point deserves attention before you go further. Grenada does not have a separate LLC statute in the American sense; the "LLC" or "Ltd." most foreign owners use is the private limited company under the Companies Act, distinct from the offshore International Business Company (IBC) created under separate legislation.

Legal Basis and Governing Law for the Grenada LLCCopy link to section

The governing statute is the Companies Act, Chapter 58A of the 2010 Revised Laws (originally enacted as Act No. 35 of 1994). It sets the core rules on company names, articles, registered office, share structure, director duties, and licensing.

Grenada operates a common law system built on English principles and adapted by local legislation. For Commonwealth advisers and investors, the framework will read as familiar territory.

Judicial oversight comes through the Eastern Caribbean Supreme Court, the regional court serving member states of the Organisation of Eastern Caribbean States. Company law across the region is broadly aligned to common standards.

The offshore IBC sits under a different law, the International Companies Act of 2002. Keeping the two regimes distinct matters: an IBC cannot trade domestically, whereas the private limited company can.

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Defining Features and Characteristics of the LLCCopy link to section

The private limited company is a separate legal entity. Shareholders enjoy limited liability, and the company restricts share transfers and may not offer shares to the public.

Membership is capped at fifty shareholders. There is no minimum capital requirement, and the company appoints a secretary as a mandatory officer.

On capital structure, bearer shares are prohibited. Securities may be issued with or without par value, and they may be redeemable, preferred, registered, or carry voting rights, giving you room to tailor the share register.

The company name must include "Limited" or its abbreviation "Ltd.", signalling the liability status. (The "LLC" suffix you may see in marketing more often attaches to the offshore IBC variant.)

Distributions are constrained by solvency. A company may repurchase its own shares only if it remains solvent, and it cannot pay a dividend out of unrealised profits.

Membership Structure, Ownership, and Capital ContributionsCopy link to section

A single person can form and own the company; the minimum is one director and one shareholder, and the two roles can be held by the same individual. Directors and shareholders may be individuals or corporate bodies, and their residency is not restricted.

Foreign owners can hold 100% of the shares. Grenada places no restrictions on foreign ownership or control of the company itself.

There is no minimum share capital to register. Capital contributions are structured through the share classes described above rather than a mandated paid-up sum.

Ownership is identified through the annual return, which lists shareholders and addresses both direct and indirect ownership and beneficial owners. Certain persons are barred from forming a company: minors under eighteen, those a tribunal has found of unsound mind, and undischarged bankrupts.

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Management, Officers, and Internal GovernanceCopy link to section

The business is run by a board of directors, with at least one director and one shareholder required and a company secretary appointed in every case. Directors may be natural persons or legal entities, and there is no general residency requirement for them.

Watch the sector exceptions. Some licensed or strategic activities can require a resident director or shareholder, so confirm the position for your specific industry before you structure the board.

Directors owe fiduciary duties and must act in the company's best interest. Shareholders exercise their rights through meetings, and an annual general meeting is required unless waived.

Statutory registers of members, directors, and charges must be kept. The formation documents filed at the Corporate Affairs and Intellectual Property Office (CAIPO) include the Articles of Incorporation, Notice of Directors, Notice of Address, and Notice of Appointment of Secretary; the By-Laws are adopted but not filed with the registry.

Member Liability and Separate Legal PersonalityCopy link to section

Shareholder liability is limited to the capital each member has contributed. Personal assets stand behind the corporate veil and are not exposed to the company's debts.

The entity is a distinct legal person. It can sue and be sued, own property, and enter contracts in its own name.

Limited liability is not absolute. Directors who breach their duties or trade wrongfully can incur personal liability under common law, and distributions remain subject to the solvency test.

A separate Unlimited Company form also exists, in which members carry uncapped liability. That is a different vehicle, and most foreign owners choose the limited company precisely to avoid that exposure.

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Typical Uses and Who Chooses a Grenada LLCCopy link to section

The domestic limited company is the right choice when you plan to operate inside the country, because the offshore IBC is barred from trading there. Foreign investors and startups use it as both an operating company and a holding company for regional assets.

Common sectors include tourism, agriculture, financial services, real estate, construction, food processing, and information and communications technology. Tourism and hospitality companies can qualify for significant incentives, including corporate tax relief for up to ten years and a reduced VAT rate of 10%.

CARICOM investors receive Rights of Establishment. Non-national investors generally need an alien landholding licence to acquire property and a work permit to take up employment.

Taxation and Key Compliance TreatmentCopy link to section

Corporate tax is charged at 28%. A resident company is taxed on profit from all sources; a non-resident company is taxed only on profit arising from Grenada sources.

VAT applies at a standard rate of 15% and registration is required once annual taxable turnover reaches EC$300,000. Withholding tax of 15% applies to dividends, interest, and royalties paid to a non-resident company, while no withholding falls on such payments to Grenada tax residents.

There is no inheritance tax, wealth tax, capital gains tax, or stamp duty. Financial statements and tax returns are due to the Inland Revenue Department by 1 March each calendar year, unless an extension is granted.

Treaty coverage is narrow. Grenada has double taxation treaties with the United Kingdom and CARICOM states, and no treaty with the United States; for investors outside the UK and CARICOM, the same income may therefore be taxed both in Grenada and at home.

On economic substance, the retrieved sources identify no specific substance legislation for domestic limited companies. Given Grenada's FATF and OECD alignment, substance expectations may still apply in practice, and you should take professional advice on your particular structure.

Advantages and Limitations of the LLCCopy link to section

The case for the entity rests on a few durable features:

• Limited liability with flexible ownership and management
• 100% foreign ownership and no restriction on control
• No minimum share capital
• No general residency requirement for founders or shareholders
• Tourism and hospitality incentives, including up to ten years of corporate tax relief and 10% VAT
• A common law framework and access to CARICOM, WTO, and EU-CARIFORUM trade arrangements

Against these sit real constraints. The fifty-shareholder cap and the bar on public offerings limit how you raise equity, and the thin treaty network means most non-UK, non-CARICOM owners face potential double taxation on Grenada-source income.

Operating realities matter too. Property acquisition requires the alien landholding licence on pain of forfeiture, specialist labour can be hard to source, utility costs run high, and the islands are exposed to natural disasters. The absence of published substance safe-harbour guidance for domestic companies is a further point to review with an adviser.

Formation Overview at a GlanceCopy link to section

CAIPO is the registration authority. The step-by-step process is covered in a separate guide; the essentials below give you the shape of it.

• Minimum incorporators: one founder, individual or corporate
• Officers: at least one director and one shareholder, plus a mandatory secretary
• Registered office: a physical address within the country is required
• Registered agent: appointment is mandatory
• Filing documents: Name Search and Reservation, Articles of Incorporation, Notice of Directors, Notice of Address, Notice of Appointment of Secretary (By-Laws are adopted but not filed)
• KYC: formation agents require identity verification before engagement
• Processing: issuance of the Certificate of Incorporation typically takes a few business days once filings are accepted

Government charges include a name reservation fee, an incorporation fee, and incidental charges, with VAT at 15% applying to professional and certain other fees. Because the published figures circulating in third-party guides may not match the current CAIPO schedule, confirm the official fees with the registry or with Expanship before you budget.

After incorporation, register for tax with the Inland Revenue Division and enrol with the National Insurance Scheme within seven days of starting operations. The company must file annual returns with the Registrar of Companies and submit financial statements and tax returns by 1 March each year; an audit is mandatory for public companies, while private companies carry lighter obligations.

ConclusionCopy link to section

For a foreign owner who intends to do business on the ground, the Grenada private limited company offers separate legal personality, limited liability, full foreign ownership, and no minimum capital, all within a familiar common law system. The trade-offs to plan around are the narrow treaty network, the fifty-shareholder ceiling, the landholding licence for property, and unsettled economic-substance expectations. Weigh those against the incentives available in sectors such as tourism, and confirm current official fees and any sector-specific resident-director rules before you proceed. Taken together, it is a practical operating and holding vehicle for investors who want a real domestic presence rather than a purely offshore structure.

How Expanship Can Help Your Business in GrenadaCopy link to section

Expanship advises foreign owners on forming and running a private limited company in Grenada, from selecting the right structure through to filing at CAIPO and meeting tax and annual-return deadlines, and supports the wider compliance needs of a foreign-owned entity once it is live.

• Company incorporation and name reservation
• Registered agent and registered office
• Tax registration with the Inland Revenue Division and ongoing filing
• Annual returns and continuing compliance management
• Accounting and bookkeeping
• Banking introductions

To discuss your structure and the current official costs, contact Expanship Grenada.

Frequently Asked QuestionsCopy link to section