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Banking, Insurance & Property

Banking

Antigua & Barbuda comes under the overall control of the Eastern Caribbean Central Bank and the currency, the Eastern Caribbean dollar, is used by eight of the nine OECS countries, the exception being the British Virgin Islands which uses the U.S.$.  The Eastern Caribbean dollar is tied to the US$ at 2.67 EC$.  Although not legal tender, the US dollar is acceptable currency in most Caribbean islands however, it is preferable to bring EC$ on holiday with you as you will get a better exchange rate at the bank than you will in the shops, bars and restaurants in Antigua.

About half the clearing banks in Antigua are foreign owned with Canadian banks predominating.  Cheques are still in common use but VISA and MasterCard credit and debit cards are widely accepted, American Express, less so.  All banks have ATM machines and a number are also located in prominent positions around the island.  It is worth having more than one credit/debit card as some ATMs take only one type.

Opening a bank account in Antigua is not easy even if you are a resident as there are very strict rules regarding money laundering and the banks are almost obsessive in observing the rules.  Also, the banking system is based on the U.S. model rather than the U.K. system which makes it somewhat inefficient so be prepared for long queues and a long wait if you want to do any over the counter banking.  Clearing overseas cheques can take up to six weeks.  Most bank transfers go via an intermediary bank in the U.S. without which transfers can get ‘lost’ although more banks now allow international transfers via the internet.

Banking Antigua

Offshore Banking 

Offshore banking in Antigua is protected by strict privacy laws and it is a criminal offence to reveal any confidential information relating to an individual’s banking or business activity with crimes severely punishable. These laws do not protect those involved in criminal activity and Antigua & Barbuda adheres to international anti-money laundering rules and other international treaties. 

An offshore IBC (International Business Corporation) established in Antigua and Barbuda can enjoy a tax exemption period of 50 years. This makes the twin island state incredibly popular with those looking for a secure, well legislated offshore jurisdiction.  The International Business Corporations Act establishes the legal framework for the operation of offshore banking business within Antigua and Barbuda.  A banking license must first be obtained from the Supervisor of Banking and Trust Corporations before commencing banking operations.

An offshore bank may engage in any generally acceptable banking activities from within Antigua and Barbuda and elsewhere but it shall not knowingly accept deposits in the legal tender of a country of the Caricom region.

Offshore banking is the business of receiving foreign funds through acceptance of foreign money deposits payable upon demand or after a fixed period or after notice, sale or placement of foreign bonds, certificates, notes or other debt obligation or other foreign money securities or any similar activity involving foreign money or foreign securities using foreign funds acquired as above to finance loans, advances and investments or the activities of the person carrying on the business.

US$5 million is required as a minimum paid up capital paid into a bank in Antigua or major international bank  prior to the issuing of an international banking license. An offshore bank is not subject to any reserve requirements as specified under the Banking Act which regulates the operation of local banks. The applicability of Antigua as an offshore destination for an individual’s banking, trust, company or general offshore needs should be determined with the assistance of an independent financial specialist.

Insurance

YACHT INSURANCE

Antigua now has quite a large number of vessels flagged in the country through the Antigua & Barbuda Department of Marine Services & Merchant Shipping (ADOMS) which has increased the demand for locally sourced insurance and, as a result, together with other factors, the insurance market in the Caribbean has changed substantially in the past few years.  Underwriters have become more aware of the real risk factors in the region and a growing market increases the areas influence in the re-insurance market. Along with the appreciation of the real risks, underwriters are now accepting the improved storage ashore facilities in Antigua which have increased substantially with the addition of two new boatyards and the expansion of others. All year round yacht insurance is now available in Antigua.

One of the biggest risks and causes of higher rates are the number of uninsured vessels.  Antigua’s Small Craft Control Act will make third party insurance mandatory and it is probably that Antigua will be the first island in the Caribbean to introduce this measure.


Insurance Antigua
PROPERTY INSURANCE

Due to the island being in the hurricane belt and suffering, rarely, the occasional small earthquake, property risks are quite high, however, by telephoning around as much as 25% can be saved on premiums and having hurricane shutters can often save you more in one year’s premiums than the cost of the shutters unless, of course, you chose to install the electrically operated type.

GENERAL INSURANCE

As with any relatively sophisticated country, every form of insurance is obtainable in Antigua either through local companies or through the affiliates of internationally renowned insurers.  Insurance has been available in Antigua since the mid 19th Century, originally for shipping but expanding into other risks as demand required.  Most general insurers will cover everything from household through vehicles to yachts either placed with Lloyds of London or other major insurers.  Both property and vehicle insurance is quite expensive particularly when compared with the U.K. but less so when compared to the U.S..

TRAVEL & HEALTH INSURANCE

Whether travelling to or living in Antigua insurance is always a consideration.  Not being an area subject to tropical diseases, the health risks in Antigua are no different from many of the more temperate countries however, travel insurance is always advisable as there are limited state medical facilities which will charge non-citizens and the private hospitals are not cheap.  Medical insurance is available in Antigua from a number of specialist companies, however, it is advisable to arrange travel insurance in advance.

MOTOR INSURANCE

Antigua’s drivers are not known for their driving skills and although the speed limits are quite low, accidents are not uncommon which pushes up premiums for vehicles.  Again, shopping around does produce more competitive rates.   The biggest way to save is by placing all your insurance risks with one company.  Multi-premium discounts apply to most companies.  For vehicles over ten years old only third party cover is generally available although there are exceptions. For comprehensive cover on older vehicles a valuation is required.


Property

Although in business as a commercial agent in Antigua for nearly 10, new to the residential market and making a big impact is Richard Watson & Company whose For Sale boards can be seen everywhere.  Like most of the world, Antigua suffered heavily through the financial crisis with property prices as nuch as halving in the post 2008 years but the green shoots of recovery are becoming evident with sales, particularly below US$500,000 although tere is also some movement between US$500,000 and $1 million.  However, there are still too many properties for sale at prices approaching the 2008 levels but if you look around carefully there are good buys to be had and many people will negotiate.  Always get advice when buying.

In Antigua there are a substantial number of properties owned by foreign nationals particularly on the coastal peripheries such as the English Harbour and Falmouth areas, much of the west coast including Jolly Harbour and the Dickenson Bay area.  Also, the east coast contains substantial new developments such as Nonsuch Bay.

The property market in Antigua is little different from that of most developed countries although Antigua's procedures are a bit of a mixture of U.K. and U.S. property selling practices but the law is essentially the same as the U.K..  Most property is priced in U.S. dollars but the local property market works in E.C. dollars and the values tend to be much lower with the locations being away from the popular coastal areas with construction, sometimes, of a lower standard.
Holiday homes are a big part of the property sales market in Antigua not only as somewhere to holiday but also, in many cases, as an investment.  Capital growth is roughly similar to any other country but the main return is from letting the property when vacant.  Most agents will handle lettings as well as sales although there are a few which specialise only in rental property.  There is also a good retirement market.

The introduction of ECONOMIC CITIZENSHIP known  as Citizenship by Investment had less impact on the property market than many anticipated although a few upmarket developments have done well most money went into the National Development Fund.
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Antigua is one of several Caribbean countries to offer economic citizenship and under the Antigua & Barbuda Economic Citizenship Programme Act of 2012, a person is required to make a significant economic contribution to the Country. In exchange, and subject to stringent application procedures, including thorough background checks, the applicants and their families are granted citizenship. To qualify for citizenship, the primary applicant must be over 18, meet the application requirements and select one of the following three investment options:-

(1) A contribution to the National Development Fund (NDF) of a minimum non-refundable amount of US$250,000.
 
(2) An investment of at least US$400,000 into one of the approved real estate projects and to be held for a minimum period of 5 years.
(3) An investment of a minimum of US$1,500,000 directly into an eligible business as a sole investor or a joint investment involving at least 2 persons in an eligible business totalling at least US$5 million and each of those persons individually invests at least US$400,000.

All three investment options are subject to government processing and due diligence fees which have recently been substantially reduced.

Comprehensive information on the ways of obtaining economic citizenship in Antigua & Barbuda can be found on the website - http://www.cip.gov.ag/

Recent changes in legislation have made it possible for investments to be made in Barbuda.  Previously, only persons born in Barbuda were permitted to own land but now major investors can buy land for specified development purposes and there are likely to be further changes to increase the availability of investment purchases in Barbuda.

BUYING A PROPERTY

Non Antiguan’s will require a Non Citizen’s Land Holding License which takes 3-6 months to obtain. The cost is 5% of the value of the property.  For vacant land, building must be started in compliance with the non-citizen’s license terms which usually means 2 years. Most property is fee simple or freehold. Leaseholds are rare and usually held by the Crown.

Government transfer fees are currently 2.5% for the buyer and 7.5% for the seller. Property taxes/rates are based on rental value and are low.  Legal costs for a transfer are 1% to 2% depending on the value of the transaction. There is no title insurance. Properties are registered at the Land Registry which is well organised. Copies of Land Certificates can be obtained for a small fee.  Always obtain a Cadastral Survey of the land/property from the Survey Office and have a land surveyor check the dimensions.  This is crucial as the boundaries are sometimes not where they appear to be from the fences. 

Estate agent commissions are 4% to 6% plus ABST (Antigua & Barbuda Sales tax currently 15%) on sale and free if you are purchasing unless you employ an agent to search for you.  Insurance coverage is approx. 2% of insured risk with a deductible of 2%. Insurance includes earthquakes and named storms.

Antigua & Barbuda offers attractive fiscal incentives to developers including exemption from or reduction of payment of duty on the importation or purchase of raw materials, building materials, furniture, fixtures, fittings, appliances, machinery, plant and equipment for use in construction.

SERVICES

Most houses are serviced by a septic tank. Water cisterns are required by law.  Government electricity and water are usually connected or available nearby as are cable TV, landline telephone and broadband. Cellular telephone coverage is island wide.  More remote properties may be accessed by little more than a dirt track but most houses have access to adequate roads. Although all property is supposed to have access to the main highway, check that the road outside a property is part of the public road network and not someone’s private drive.

RENTING PROPERTY

Short term rents range from US$50 per night out of season (June to November) for a basic apartment to a lush fully staffed villa at several thousand US$ per night during the season (December to May).  There is a large variety of property to rent which can be a great alternative to staying in hotels.  Most  rental villas have a swimming pool and close proximity to one of Antigua’s many great beaches. Villa rental also provides an opportunity for owners to get an income from their second homes while they are not using them. The property management fee is usually 10%. Rental commissions are 8.33% for long term rentals and 20% for short term rental.  Withholding taxes are 25% of net rental income for non-residents.
There are also many long term rental properties available and, dependent upon size and condition, can be had for less than US$500 per month.  A long term rental can be a serious alternative to purchasing property as the landlord is responsible for the upkeep and there are no risk of changing property values.

Time-share is not particularly common in Antigua but there are several older developments which were constructed in the times when time-share was very popular and they still have properties which occasionally come available.

RENTING PROPERTY

Short term rents range from US$50 per night out of season (June to November) for a basic apartment to a lush fully staffed villa at several thousand US$ per night during the season (December to May).  There is a large variety of property to rent which can be a great alternative to staying in hotels.  Most  rental villas have a swimming pool and close proximity to one of Antigua’s many great beaches. Villa rental also provides an opportunity for owners to get an income from their second homes while they are not using them. The property management fee is usually 10%. Rental commissions are 8.33% for long term rentals and 20% for short term rental.  Withholding taxes are 25% of net rental income for non-residents.
There are also many long term rental properties available and, dependent upon size and condition, can be had for less than US$500 per month.  A long term rental can be a serious alternative to purchasing property as the landlord is responsible for the upkeep and there are no risk of changing property values.

Time-share is not particularly common in Antigua but there are several older developments which were constructed in the times when time-share was very popular and they still have properties which occasionally come available.

Property for sale Antigua

FINANCE/MORTGAGES

Bank financing is available but interest rates are high by US or European standards and 30% or more cash deposit will be required.  If you are looking to buy a holiday home in Antigua consider raising a mortgage on your main residence in the country where you live.

The Antigua Barbuda Investment Authority offers attractive fiscal incentives to developers including exemption from or reduction of payment of duty on the importation or purchase of raw materials, building materials, furniture, fixtures, fittings, appliances, machinery, plant and equipment for use in construction.

For a selection of agents see our Trades & Services Directory listed under Real Estate Sales & Rentals.     

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