Opening A Business In Antigua And Barbuda: A Step-By-Step Guide

Antigua and Barbuda is a great place to start a business, whether it be a small startup or a large corporation. The country welcomes foreign investment and has made the process of setting up a business straightforward. The economy of Antigua and Barbuda grew by over 5% in 2023, with the tourism and construction sectors performing well. The country also boasts a high standard of living, a robust education system, and a well-educated workforce.

The first step to starting a business in Antigua and Barbuda is to understand the local business landscape and plan your business accordingly. It is also important to find the right people to help you, including experienced team members and local business owners or entrepreneurs who can offer advice.

The next step is to register your business with the government, which involves providing information such as your name, address, and contact details. You will also need to obtain a business licence and consider the various tax obligations, as businesses in Antigua and Barbuda are typically required to pay taxes on their profits.

There are several types of business structures to choose from when setting up your company, including private or public Limited Liability Companies (LLCs), non-profit companies, and International Business Corporations (IBCs). IBCs, in particular, offer several perks, such as no tax obligations in Antigua and Barbuda and the freedom to conduct international business without limitations on international money transfers.

Overall, starting a business in Antigua and Barbuda can be a rewarding experience, but it is important to be aware of the legal requirements and to seek guidance where needed.

Understanding the business landscape in Antigua and Barbuda

Antigua and Barbuda is a highly attractive destination for international companies and high-net-worth individuals due to its advantageous tax policies, prime geographic position, strong legal structures, and natural beauty. The country's economy grew by over 5% in 2023, with the tourism and construction sectors contributing significantly.

The business landscape in Antigua and Barbuda offers a range of opportunities, particularly in the tourism and financial services sectors, which are currently booming. The country also has a 100% literacy rate, ensuring a skilled workforce for businesses.

When starting a business in Antigua and Barbuda, it is essential to understand the different business structures available. The most common types of businesses are:

• Private or Public Limited Liability Companies (LLCs): These are companies that conduct business on the islands. Owners, directors, and/or shareholders enjoy limited liability for debts and obligations.
• Non-profit companies: These organizations must focus on specific areas such as patriotism, religion, philanthropy, education, or sports to qualify for non-profit status.
• International Business Corporations (IBCs): These are companies or investors that establish a physical or on-paper presence in Antigua and Barbuda while conducting business internationally. IBCs enjoy several perks, including the freedom to move their money without restrictions and tax exemptions.

The process of setting up a business in Antigua and Barbuda is relatively straightforward. Here are the key steps to follow:

• Understand the business landscape and choose the right structure for your venture.
• Plan your business carefully, considering factors such as location, budget, and experience.
• Obtain the necessary licenses and permits, including a business license from the relevant authorities.
• Register your business with the government and create a company file. This involves providing information such as your name, address, contact details, and other required documents.
• Understand the tax obligations for your business. While IBCs are generally tax-exempt, companies operating in the domestic market are subject to taxes, including corporate tax, VAT, and real estate tax.
• Market your business effectively to reach potential customers and build relationships.
• Stay connected with the local community and contribute to its development.

By following these steps and understanding the unique business landscape of Antigua and Barbuda, entrepreneurs can successfully establish and grow their ventures in this attractive business destination.

Choosing the right business structure

Antigua and Barbuda offers several business structures for entrepreneurs to choose from. Here are some key considerations for choosing the right business structure:

Private or Public Limited Liability Companies (LLCs)

LLCs are suitable for those intending to conduct business on the islands. This structure offers limited liability for owners, directors, and shareholders regarding the company's debts and obligations. It is essential to note that LLCs are subject to a 25% income tax rate if they conduct business or generate profits in the domestic market.

Non-profit Companies

Non-profit companies must have one of the following focuses: patriotic, religious, philanthropic, charitable, educational, scientific, literary, historical, artistic, social, professional, fraternal, sport, or athletics. This structure is ideal for those looking to contribute to society and make a positive impact.

International Business Corporations (IBCs)

IBCs are ideal for companies or investors looking to establish a subsidiary of their global operations in Antigua and Barbuda. They can have a physical or paper-only presence and enjoy the freedom to conduct international business without restrictions on international money transfers. IBCs are exempt from taxes in Antigua and Barbuda and are not required to disclose company ownership publicly. Additionally, they have the option to establish a physical office and bank anywhere in the world.

When choosing a business structure, it is important to consider your specific business activities, whether you intend to operate locally or internationally, and the associated tax implications. It is always recommended to seek professional advice to ensure you make the right choice for your unique circumstances.

Registering your business

• Choose the Right Business Structure: Antigua and Barbuda offer different types of business structures, including Private or Public Limited Liability Companies (LLCs), Non-profit Companies, and International Business Corporations (IBCs). Each structure has its own advantages and requirements, so it is essential to choose the one that best suits your business activities and goals.
• Select a Unique Business Name: Choose a name that reflects your business's nature and is not similar to any existing businesses in Antigua and Barbuda. You can conduct a name search on the official government websites or seek assistance from local agents or consultants.
• Appoint a Local Agent: Engaging a local agent or consultant, such as a lawyer, accountant, or trust company, is necessary for registering your business. They will guide you through the process, submit the required documents, and facilitate communication with the relevant authorities.
• Prepare the Required Documents: The documentation needed for registration may include an Application for International Business Charter, Articles of Incorporation and By-laws, Notices of Directors and Registered Office, and proof of identity and residence for directors and shareholders. Ensure that all documents are translated into English and certified.
• Submit the Registration Application: Your local agent or consultant will submit the completed application and supporting documents to the relevant authority, which is typically the Financial Services Regulatory Commission (FSRC) or the Antigua and Barbuda Intellectual Property and Commerce Office (ABIPCO).
• Obtain Necessary Licenses and Permits: Depending on your business activities, you may need to obtain specific licenses and permits. This process may vary depending on the nature of your business, and your local agent can guide you through the requirements.
• Understand Tax Obligations: Antigua and Barbuda have specific tax regulations for different types of businesses. IBCs, for example, may be exempt from certain taxes if they are not tax residents or do not have a permanent establishment in the country. However, it is essential to seek professional advice to ensure compliance with all tax requirements.
• Maintain Compliance: After registering your business, ensure that you maintain proper financial records and comply with any ongoing reporting or compliance requirements. This includes keeping accounting records, holding annual general meetings (if required), and submitting any necessary reports to the relevant authorities.

By following these steps and working closely with your local agent or consultant, you can successfully register your business in Antigua and Barbuda, ensuring compliance with the country's legal and regulatory framework.

Understanding tax obligations

Antigua and Barbuda's tax framework is favourable to US expats, offering tax incentives and exemptions to attract foreign interest and investment. Understanding the country's tax obligations is crucial for businesses operating in or seeking to enter this market. Here is an overview of the tax landscape in Antigua and Barbuda:

Personal Income Tax

In 2016, Antigua and Barbuda abolished personal income tax. As a result, neither residents nor non-residents are required to pay taxes on their personal income. This applies to both local and worldwide income for individuals. However, US citizens residing in the country are still obligated to declare their worldwide income to the IRS.

Corporate Tax

Companies registered in Antigua and Barbuda are subject to a flat corporate tax rate of 25% on their taxable profits. This applies to resident and non-resident companies, with the tax rate applied on a sliding scale ranging from 0% to 25% of gross income. The tax year is based on the company's fiscal year-end, and the tax deadline is typically March 31st.

Self-Employment Tax

Self-employed individuals in Antigua and Barbuda are subject to a variable self-employment tax rate of 0%, 8%, or 25%. They must register with the Antigua and Barbuda Inland Revenue Department and obtain a Tax Identification Number.

Withholding Tax

Non-resident companies are subject to a withholding tax of 25% on earnings from dividends, interest, and royalties generated in the country.

Sales Tax

Antigua and Barbuda imposes a sales tax, similar to Value-Added Tax (VAT), which is generally fixed at 15%. However, certain sectors, such as hotels and holiday accommodations, benefit from a reduced sales tax rate of 10.5% and 12.5%, respectively.

Property Tax

Property tax in Antigua and Barbuda is assessed based on the market value of the property. The tax rate typically ranges from 0.1% to 0.5% for both residents and non-residents. However, there is no property tax on the market value of residences in Barbuda.

Stamp Duty

Real estate transactions in Antigua and Barbuda incur a stamp duty. The seller is responsible for paying 7.5% of the taxable value, while the buyer contributes 2.5%.

Social Security Contributions

Public and private sector companies and their employees must make mandatory social security contributions. The social security tax rate is 14% for the private sector and 13% for the public sector. Employers in the private sector pay 8%, while employees contribute 6%. In the public sector, employers pay 8%, and employees pay 5%.

Tax Residency Programs

Antigua and Barbuda offers tax residency programs with benefits such as no income tax, capital gains tax, inheritance tax, or wealth tax on worldwide income or assets. The requirements for these programs include maintaining a residence in the country, residing for a minimum number of days per year, and paying a flat annual tax rate.

Complying with regulations

Antigua and Barbuda boasts a business-friendly environment, with advantageous tax policies, a prime geographic position, and strong legal structures. The country's economy grew by over 5% in 2023, largely driven by the tourism and construction sectors.

When starting a business in Antigua and Barbuda, it is crucial to comply with the country's regulations and legal requirements. Here are some key points to consider:

Types of Business Structures

Antigua and Barbuda offers three main types of business structures:

• Private or Public Limited Liability Companies (LLCs): These are companies based in Antigua and Barbuda that conduct business on the islands. Owners, directors, and shareholders of LLCs enjoy limited liability protection for the company's debts and obligations.
• Non-profit Companies: To qualify as a non-profit organization in Antigua and Barbuda, the entity must focus on one of the following areas: patriotic, religious, philanthropic, charitable, educational, scientific, literary, historical, artistic, social, professional, fraternal, sports, or athletics.
• International Business Corporations (IBCs): IBCs are companies or investors that establish a subsidiary of their global operations in Antigua and Barbuda, either physically or on paper. IBCs can conduct international business without restrictions on international money transfers and enjoy tax exemptions.

Registration and Licensing

To comply with regulations, it is essential to complete the necessary registration and licensing processes. Here are some key steps:

• Search for and register your business name.
• Complete the business registration form and submit all the required documents.
• Obtain the necessary licenses for your specific business activities, especially if you are engaged in digital asset or cryptocurrency-related businesses.
• Register for business and statutory deductions.
• Receive your Business Name Registration Certificate.
• For IBCs, ensure that two company representatives, who are citizens and residents of Antigua and Barbuda, initiate the application process, with at least one being an attorney.
• Submit signed articles of incorporation and a Memorandum of Association (MOA).

Taxation

Antigua and Barbuda has a 25% income tax rate for businesses generating profits in the domestic market. However, IBCs enjoy tax exemptions on their business activities and are not required to file tax returns. Additionally, there is no wealth, inheritance, or capital gains tax on global income for foreign investors.

Employee Benefits and Regulations

Antigua and Barbuda has several mandatory employee benefits, including health insurance, retirement savings plans, and paid vacation days. Employers are also allowed to offer paid sick days. It is important to be aware of and comply with these regulations when employing individuals in your business.

Digital Assets Business Act

The Digital Assets Business Act and its accompanying regulations provide a comprehensive legal and licensing framework for blockchain, cryptocurrency, and digital token/asset projects. This act offers licensing under three major categories: Payment Services Provider, Digital Assets Services Vendors, and Custodial Wallet Services Provider. Ensure that your business complies with the relevant category and associated regulations.

Frequently asked questions