St.Kitts and Nevis economy: Minor hiccups.

Like most of its Caribbean counterparts, the Island of St. Kitts and Nevis is a tourist destination providing all the standard amenities expected of a first rate tourist center.

Tourism earns top dollar for the nation, while providing employment to a substantial number of the workforce. Star hotels, golf courses, beaches, cruise ship piers, et al are available and well maintained to cater to tourists, especially the upper end customers.

The Government has taken several steps to make the islands a preferred destination, not only for tourists , but also for investors. Free trade zones, export processing zones and industrial sites are strategically located and provide all sorts of inducements to the investors to set up shop here.

Exemptions from excise duties and income tax, provision for foreign currency account maintenance, and special labor agreements are some of the attractions that draw the foreign investors to the Islands. St. Kitts and Nevis has a unique system of Ordinances to provide relief to investors in the shape of the Hotel Aids Ordinance that gives relief from customs duties and pier fees.

The Income Tax Ordinance gives special tax relief and benefits for hotel owners. The St. Kitts and Nevis Investment Promotion Agency (SKIPA) has played a prominent role in promoting investment in the Islands. St. Kitts and Nevis is also a beneficiary of the Caribbean Basin Initiative that allows 95% of its goods duty free entry into the U.S. This is an important benefit that companies seeking entry to the U.S. markets can take advantage of, by setting up shop on the Island.

According to the IMF, St. Kitts and Nevis is likely to suffer in the short term on account of global downturn and heavy debt burden, but medium and long term growth prospects are bright.