HomeReportsBureau of Economic and Business Affairs2022 Investment Climate Statements…Grenada

# 					2022 Investment Climate Statements: Grenada			

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													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Toward Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Other Investment Policy Reviews 
                  -  Business Facilitation 
                  -  Outward Investment 
                -  2. Bilateral Investment and Taxation Treaties   
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Antitrust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement                      -  ICSID Convention and New York Convention 
                    -  Investor-State Dispute Settlement 
                    -  International Commercial Arbitration and Foreign Courts 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances                      -  Foreign Exchange 
                    -  Remittance Policies 
                  -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises                    -  Privatization Program 
                -  8. Responsible Business Conduct                    -  Climate Issues 
                -  9. Corruption                    -  Resources to Report Corruption 
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs   
                -  13. Foreign Direct Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Grenada’s legal framework for business is strong. The country is a parliamentary democracy, has a functioning court system, relatively low crime rates, and no political violence. The presence of a comprehensive investment incentive regime, stable economy, existing trade agreements, responsive investment promotion experts, and a robust citizenship by investment program contributes to a healthy and attractive investment climate. However, Grenada’s tourism-driven economy was severely impacted by the global COVID-19 pandemic.

The COVID-19 pandemic posed unparalleled challenges for Grenada by creating macroeconomic instability that threatened to undermine years of consecutive socio-economic progress since 2013. The government’s main revenue earners – tourism and international education — were severely impacted and continue to struggle amidst efforts to revive the economy. Growth in construction, private sector projects, and the country’s Citizenship by Investment (CBI) program is fueling economic activity and forecasted to drive recovery in 2022. Following a 13.8 percent decline in growth during 2020, Grenada experienced a slower-than-expected real GDP growth of 4.8 percent compared to an initial projection of 6 percent. Grenada’s recovery is driven by growth in several sectors including construction (22.8 percent), agriculture (12.5 percent), wholesale and retail (4.4 percent), and financial intermediation (3.5 percent). Tourism and private tertiary education, which once accounted for more than 60 percent of GDP, continues to lag, but the government hopes for an uptick as students return to classes and tourists resume travel.

Government finances remain significantly lower than the 2019 pre-pandemic era, but 2021 saw some positive developments compared to 2020. Revenue collection in 2021 surpassed that of 2020 but remained below 2019 performance. Grenada continues to depend on the country’s citizenship by investment program as a significant source of revenue generation. At the end of October 2020, the program received 437 applications compared to 303 the previous year. By the end of 2021 the CBI program earned more than $55.4 million in revenue – a 40 percent increase compared to the previous year. The debt-to-GDP ratio fell from 108 percent in 2013 to just under 60 percent by the end of 2020. Due to an increase in borrowing and long-term concessionary loans to finance the country’s COVID response, the debt to GDP ratio currently stands at 69 percent.

The government of Grenada has a strong interest in climate resilient initiatives, renewable energy, and developing the blue economy (broadly defined as the sustainable, environmentally sensitive use of ocean resources for economic growth and job creation). Other international investments include projects in construction, manufacturing, retail, duty free outlets, and agriculture. Parliament continues to review legislature governing value added tax, property transfer tax, investment, excise tax, customs (service charge), and bankruptcy and insolvency. The government has an innovative investment incentives regime which assists with streamlining bureaucratic and legal processes to increase the attractiveness of FDI and improve the ease of doing business in Grenada. This regime ensures transparency, equitable treatment of investors, and adherence to the rule of law, thus bolstering Grenada’s marketability as an investor-friendly climate.