Benefits of St Kitts and Nevis Tax Residence

As a discerning high-net-worth individual, you’re likely continuously seeking jurisdictions that offer unrivalled tax and lifestyle advantages for you and your wealth. 

The Caribbean nation of St Kitts and Nevis is a popular offshore jurisdiction for banking and offshore trusts, but there are also notable tax benefits to be had.

The allure of the St Kitts and Nevis tax regime is simple: no personal income tax, no capital gains tax and no inheritance tax. 

Moreover, the way that taxes are structured in St Kitts is designed to entice entrepreneurs, making it a strategic enclave for those wishing to broaden their global business interests. 

So, what exactly does St Kitts and Nevis tax residence mean, what are the benefits and how do you become a tax resident there? 

This comprehensive guide to tax residence in St Kitts and Nevis has all the answers. 

Are you looking for an offshore jurisdiction that best suits your needs but aren’t sure which one to choose? Talk to the experts at Nomad Capitalist and we’ll help you to go where you’re treated best.

Why Become a Tax Resident of St Kitts and Nevis?

With a personal income tax rate of 0% and capital gains tax rate of 0%, the better question is, ‘Why would you not want to gain tax residence in St Kitts and Nevis?’

With no inheritance tax or gift tax, it’s hard to find any reason not to. To break it down clearly for you:

• Personal taxes: No personal income tax on worldwide income, regardless of tax residence. Non-residents pay 15% on dividends or royalties
• Corporate taxes: A flat 33% corporate tax rate on net profit. Tax residents pay up to 17% VAT, while non-residents pay 15% on income earned within the country
• Capital gains tax: No capital gains tax unless the asset is sold within 12 months, then a 20% tax applies
• Property tax: Property tax ranges from 0% to 0.3% based on the value and location, with exemptions for new construction and citizenship-by-investment (CBI) program participants.

It also helps that the official language of St Kitts and Nevis is English, making dealing with the Inland Revenue Department more straightforward when it’s time to report your earnings.

In addition, the legal currency is the East Caribbean Dollar, with a fixed exchange date with the US dollar at a rate of US$1 to XCD$2.70.

While neither residents nor non-residents are liable to pay income tax, the island nation does have a 33% corporate tax rate. However, tax residents are not obligated to pay withholding taxes on dividends or royalties. 

In contrast, non-residents will have to meet the 15% tax rate on corporate dividends or royalties received in St Kitts and Nevis.

Does St Kitts and Nevis Really Have No Taxes?

There is no personal income tax in St Kitts and Nevis, however, property tax in St Kitts and Nevis is another story.

The amount of property tax is determined by the market value of the property and also depends on the location and type. There is no capital gains tax on the sale of real estate.

However, property taxes do incur stamp duty and land tax. Stamp duty is paid by those selling real estate, while the land ownership license, 10% of the purchase price, has to be acquired by the buyer.

St Kitts Island’s agricultural and institutional properties are exempt from taxes. That said, there is an onus on St Kitts and Nevis property owners to pay building tax.

Ultimately, the tax system in St Kitts and Nevis is one of the most favourable in the world.

Non-tax residents of the islands pay withholding taxes. As a tax resident, you don’t have to. Corporations will need to file an income tax return, however.

How to Obtain Tax Residence in St Kitts and Nevis

If you want to be a tax resident of St Kitts and Nevis, you must meet one of the following requirements:

• Reside in St Kitts and Nevis for a minimum of 183 days a year
• Have a registered address within St Kitts and Nevis
• Have a company registered, operated and managed within the country.

Residing in St Kitts and Nevis for 183 days per year will automatically qualify you as a tax resident, as it does in most other nations worldwide. You do not need to do anything special to ‘register’ yourself as a tax resident in that case.

How do you become a resident in the first place, though? After all, to reside in the country for 183 days a year to trigger tax residence, you must live there in the first place.

The easiest way to gain tax residence is to apply for the St Kitts and Nevis citizenship-by-investment program. It’s the oldest investment program of its kind in the world, having launched in 1984.

Once you obtain St Kitts and Nevis tax residence, you are governed by the Income Tax Act and will not have to pay income tax.

It’s important to reiterate that resident corporations are treated slightly differently.

St Kitts and Nevis operates a worldwide system of corporate income tax, meaning that companies considered tax resident are taxable on a global basis. 

In contrast, non-resident companies are solely taxed on income sourced within St Kitts and Nevis.

St Kitts and Nevis interprets tax residence as companies that are managed and controlled there. So, if a company’s Board of Directors holds meetings in St Kitts and Nevis, it is tax resident.

Equally, where the Board of Directors meets outside St Kitts and Nevis, the government will deem it non-resident.

There are certain situations where a legal entity can be taxed in St Kitts and Nevis and in another jurisdiction.

In such circumstances, double tax treaties (including the CARICOM Double Taxation Agreement) provide a test to determine which of the two countries the entity is taxed in. 

Domestic companies pay a corporate income tax of 33% on their global income, but companies established by the International Business Companies Act are 100% tax-exempt.

Other Advantages of St Kitts and Nevis Tax Residence

If the reasons above weren’t enough, here are some more benefits of holding tax residence in St Kitts and Nevis:

• Corporate tax exemptions: If St Kitts and Nevis resident companies do business with non-resident companies of the country, they are exempt from paying this corporate income tax
• Foreign income exemptions: With zero tax on foreign income, regardless of tax residence status, your foreign income will remain untouched by local taxes
• Reduced VAT: While the tourism sector is subject to a 10% Value Added Tax, there is no VAT on some goods and services. This includes most medical services
• Offshore banking: You can access offshore banking with St Kitts and Nevis tax residence. Offshore banking could be part of a solution to various tax issues
• Confidentiality and privacy: St Kitts and Nevis offers robust confidentiality laws and other privacy measures to protect both individuals and businesses.

Is St Kitts Citizenship Worth It?

Gaining St Kitts citizenship by investment is perhaps the most straightforward pathway to become a tax resident. 

However, if you choose this route, you need to factor in a non-refundable contribution, due diligence fees and processing charges.

It’s also worth noting that tax residence is not the same as St Kitts and Nevis citizenship. 

Citizens do not require a license to own land or need to pay 10% of the property’s value if they become property owners.

With that in mind, the St Kitts and Nevis citizenship-by-investment program is a good option and has recently become even more appealing due to changes made to the minimum investment amounts in October 2024.

The minimum real estate investment has been reduced from US$400,000 to US$325,000 and the investment threshold for single-family homes has also been lowered from US$800,000 to US$600,000.

The program offers numerous advantages beyond zero income tax, though.

There’s a minimum investment amount of just US$250,000 if you opt for the donation route, making it one of the cheaper programs around. 

More than that, St Kitts and Nevis CBI is known for its reliability and trustworthiness. 

Becoming a citizen means you also get a passport with access to at least 145 countries including the EU, UK and Russia. 

Applicants can bring family members, including dependent parents.

The icing on the cake, though, is that citizenship is lifelong and transferable to descendants, with no physical presence requirement.

Go Where You’re Treated Best

Through the wealth they generate, typically, seven- and eight-figure entrepreneurs and investors are liable to pay large amounts of income tax. 

If you fall into that bracket, at Nomad Capitalist, we can advise you how to legally reduce your income tax obligations. 

St Kitts and Nevis tax residence can certainly help to alleviate these tax woes, but as always, getting the right, personalised advice upfront is vital.

If you’re looking to enjoy a significant reduction in your taxes, protect your assets and grow your wealth, talk to our team today.