Key Takeaways
- A representative office operates as a non-trading presence of its parent, so its permitted activities are limited and many commercial functions are prohibited.
- Liability for the office rests with the parent company, which remains responsible for its conduct and obligations in Grenada.
- Permanent-establishment treatment determines the office's tax position, making the distinction between promotional and revenue-generating activity important.
- Ongoing compliance obligations continue after formation, so owners should weigh the entity's advantages against its operational limitations.
Understanding the Representative Office in Grenada
Grenada's company law does not recognise a "representative office" as a separate legal form. The nearest equivalent is registration as an external company under the Companies Act, and the term "representative office" is used informally to describe such a registration whose activities are confined to liaison, market research, and promotion.
This distinction matters to any foreign business planning a Grenada presence. What you register is your existing parent company, not a new local entity, and the "representative office" label reflects a commercial choice to limit activity rather than a separate statutory vehicle.
This guide explains what that means in practice: the legal basis, permitted and prohibited functions, parent-company liability, tax treatment, ongoing obligations, and a brief outline of formation. It is written for foreign companies and their advisers weighing a lightweight, non-trading foothold in the Eastern Caribbean before committing to a full subsidiary.
Legal Basis and Governing Law
The governing statute is the Grenada Companies Act (Cap. 58A), adopted in 1994 and cited from the 2010 Revised Edition of the Laws of Grenada. Foreign corporations seeking to carry on business are dealt with under Part XIX, which runs from Sections 340 to 359 and covers external companies.
No standalone "Representative Offices Act" exists. There is no separate statutory category for a representative office, so the rules that apply to your presence are those Part XIX sets out for external companies generally.
Part XIX addresses the full lifecycle of a foreign-company registration: the prohibition on unregistered trading (s. 340), the registration requirement (s. 341), restrictions on activities (s. 342), the appointment of a local attorney (s. 346), and the consequences of suspension or cancellation (ss. 351 to 353). The Companies (Amendment) Act 2022 introduced changes to Cap. 58A.
Grenada's corporate law follows English common law principles adapted by local legislation. Judicial oversight sits with the Eastern Caribbean Supreme Court, which serves several states in the region.
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Defining Features and Characteristics
A representative office in this sense is an external-company registration, not an independent legal person. The presence is an extension of the parent, which retains its own ownership structure, share capital, and governance.
No Grenada shares are issued and no local shareholders or members are created. There is no requirement for a Grenada board of directors; strategic and operational control stays with the parent.
A defining requirement is local representation. You must appoint a local representative or agent who acts for the entity in Grenada, and under Section 346 this is done through a fully executed power of attorney in the prescribed form, with the appointee registered at the Corporate Affairs and Intellectual Property Office (CAIPO).
The financial records and conduct of the presence remain the responsibility of the parent. The entity operates under the parent's name, subject to any name reservation required by the registry.
Permitted Activities and Prohibited Activities
The line that matters most is between liaison and trade. A presence confined to market research, promotion, information gathering, and facilitating orders placed with the overseas parent is generally regarded as permissible for an external company.
Crossing into active business changes the position. Concluding contracts, invoicing, collecting revenue, or otherwise carrying on trade directly in Grenada would constitute "carrying on business" and pull the presence into the full obligations that apply to a trading external company.
Section 342 of the Companies Act sets out restrictions on the activities of external companies. The specific enumerated restrictions are not reproduced in the public sources consulted, so your adviser should review the section directly via the Laws of Grenada portal before fixing the scope of any presence.
Section 340 prohibits an unregistered external company from carrying on business in Grenada, and there is no public confirmation that the Act carves out a "representative office" exemption. A conservative reading is that any Grenada presence, even a purely promotional one, must register under Part XIX.
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Relationship With and Liability of the Parent Company
Because the presence has no separate legal personality, the parent carries unlimited liability. All debts and obligations incurred in Grenada are directly those of the parent company.
Third parties dealing with the representative office are, in substance, contracting with the parent. There is no Grenada-law shield separating the parent's assets from liabilities arising in the jurisdiction.
The local attorney appointed under Section 346 acts as the parent's agent and does not absorb that liability. Section 347 addresses the failure of the attorney's power, covering circumstances where the authority lapses or is revoked, but a lapse in agency does not transfer the parent's exposure elsewhere.
Typical Uses and Who Chooses a Representative Office
This route suits a foreign company that wants to test or support the Grenada and wider OECS/CARICOM market without immediately incorporating a local subsidiary. It preserves access to the market while keeping core operations abroad.
Common functions include:
- Market research and product or service promotion
- Liaison with government bodies and procurement support
- Acting as a conduit for orders ultimately placed with the overseas parent
Companies in tourism, construction, financial services, agriculture, and ICT have practical reasons to maintain a presence of this kind. Government investment in digital infrastructure has made the ICT sector a particular point of interest for foreign entrants.
One constraint should shape expectations. Grenada has a population of just over 100,000, so the domestic market available to a non-trading presence is small, and most foreign firms use the office to reach beyond it rather than to serve it directly.
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Taxation and Permanent-Establishment Treatment
No dedicated tax rule governs a "representative office" as distinct from a trading external company. The general principle follows from the lack of separate personality: any Grenada-source income is attributed to the parent.
A presence that stays purely promotional and earns no Grenada-source income would normally owe no Grenada corporate income tax, though the position should be confirmed with a local tax adviser. Where Grenada-source trading income does arise, it is taxed at the corporate rate.
| Item | Rate |
|---|---|
| Corporate income tax on taxable profits | 28% |
| Withholding tax on dividends, royalties, interest to non-residents | 15% |
| Capital gains tax | None |
| Wealth tax | None |
Permanent-establishment risk turns on conduct. A liaison office that concludes no contracts and collects no revenue in Grenada generally will not create a PE under standard OECD treaty principles.
Treaty coverage is limited. Grenada is party to double-tax treaties with some countries, but the sources do not enumerate them, so the network in force should be verified treaty by treaty before you rely on relief.
Compliance and Ongoing Obligations
Registration with CAIPO must precede any commercial activity. Once registered, the presence carries continuing duties that the parent is responsible for meeting.
- File the periodic returns required under Section 356
- Maintain proper accounting records and renew the business licence
- Notify the Registrar of fundamental changes to the parent under Section 355
- Register for a Tax Identification Number with the Inland Revenue Division
- Register with the National Insurance Scheme if you employ local staff
- Meet anti-money-laundering and beneficial-ownership disclosure obligations
Grenada belongs to the Caribbean Financial Action Task Force, the regional body affiliated with the FATF, so KYC and AML standards apply to the registration and to the appointed local agent. Supplementary documents from the country of registration must be authenticated and rendered into English.
A current fee schedule for external-company annual returns was not available from the sources consulted. Confirm the applicable filing fees directly with CAIPO, or ask Expanship to verify them on your behalf.
Advantages and Limitations
The appeal of this route is simplicity of entry. The parent registers its existing corporate form rather than building a new local entity, with no minimum share capital required for the external-company registration and no local directors or shareholders to appoint.
Other points in its favour:
- Foreign owners may hold 100% ownership; Grenada supports foreign direct investment and imposes no ownership or control restrictions
- The parent keeps full operational and strategic control
- Membership in CARICOM, the WTO, and the EU-CARIFORUM framework supports market access
- Maintaining a lightweight presence can cost less than running a subsidiary
The drawbacks are real and centre on exposure. The parent's liability is unlimited, with no shield between its assets and Grenada obligations, and its financial affairs can be drawn into Grenada proceedings through the registered attorney.
Trading or generating revenue locally risks triggering full PE and tax treatment, requiring a broader external-company filing. The small domestic market, the absence of any express liaison exemption from registration, the limited treaty network, and the Registrar's power to suspend (s. 351) or cancel (s. 352) a registration for non-compliance all weigh against treating this as a long-term trading base. Where you intend to trade and want a liability shield, a locally incorporated limited company is the better choice.
Formation Overview
Registration of the foreign company as an external-company presence is handled by CAIPO. The full step-by-step process is covered in a separate guide; what follows is a brief outline.
- Name search and reservation. Submit a name search and reservation form to CAIPO. The official fee is XCD 5 for a search and XCD 25 to reserve; a name is typically reserved within three days where the application is in order.
- Prepare documents. Assemble the parent's Certificate of Incorporation, details of its directors and shareholders, and the Grenada registered office details.
- File the statement. Under Section 344, file the prescribed statement with the Registrar, giving the company's name, jurisdiction and date of incorporation, and particulars of its corporate instruments.
- Appoint the local attorney. Execute a power of attorney in the prescribed form under Section 346 and register the attorney with CAIPO.
- Pay the registration fee. The prescribed fee is payable at filing. A current figure should be confirmed directly with CAIPO, as older published figures do not reliably reflect the schedule in force.
- Register for tax and NIS. Obtain a TIN from the Inland Revenue Division and register with the National Insurance Scheme if you employ staff.
Documents to prepare include a certified or apostilled Certificate of Incorporation, certified constitutional documents, authenticated attestations from the country of registration translated into English, details of the parent's directors and shareholders, the executed power of attorney, proof of a Grenada registered office, and KYC on beneficial owners.
On timing, business registration steps in Grenada involve roughly six procedures over about 20 days. A separate, guaranteed timeline for external-company registration alone was not found in the sources, so treat that figure as a general indication rather than a fixed promise.
Conclusion
A representative office in Grenada is, in law, an external-company registration of your parent, used informally for liaison and promotional work. It offers a low-commitment way to study the market and keep control with the parent, but it provides no separate legal personality and no liability shield, and any move into actual trading changes both the tax and the regulatory picture. For a non-trading foothold the route is workable; for trading with protected assets, a locally incorporated company deserves serious consideration.
How Expanship Can Help Your Business in Grenada
Expanship advises foreign companies on registering and running an external-company presence in Grenada, from confirming whether your intended activities stay within liaison limits to handling the CAIPO filing and local attorney appointment, and we extend that support across the wider needs of a foreign-owned entity in the jurisdiction.
- Company and external-company registration with CAIPO
- Registered agent and local office services
- Tax registration with the Inland Revenue Division and ongoing filing
- Management of annual returns and statutory compliance
- Accounting and bookkeeping
- Introductions to local banking
To discuss your plans and confirm the current fees and requirements, contact Expanship Grenada.
Frequently Asked Questions
No. The Companies Act (Cap. 58A) creates no distinct "representative office" vehicle, and the closest recognised form is an external company registered under Part XIX. The term is used informally to describe such a registration limited to non-trading functions.
A presence confined to research, promotion, and liaison is generally acceptable, but concluding contracts, invoicing, or collecting revenue counts as carrying on business. That activity triggers the full obligations of a trading external company and potential corporate tax at 28% on Grenada-source profits.
Yes, without limit. Because the presence has no separate legal personality, all Grenada debts and obligations are directly those of the parent, and third parties dealing with the office are in effect contracting with the parent.
Yes. You must appoint a local attorney or agent under Section 346 through a fully executed power of attorney in the prescribed form, and that person or firm must be registered with CAIPO.
A liaison presence that earns no Grenada-source income would normally owe no Grenada corporate income tax and generally will not create a permanent establishment under standard OECD principles. The position should be confirmed with a local tax adviser, particularly given Grenada's limited double-tax treaty network.
You must file the periodic returns required under Section 356, keep proper accounting records, renew the business licence, and notify the Registrar of fundamental changes to the parent. AML and beneficial-ownership obligations also apply, reflecting Grenada's membership of the Caribbean Financial Action Task Force.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
