Concessions important for investments says PM

Concessions to hoteliers like that offered under this country’s Hotel Aids Act are important for national development and attracting Foreign Direct Investment (FDI), said Prime Minister, Dr. Ralph Gonsalves.

He pointed out that these types of Acts are also popular in other parts of the Caribbean and the type of incentives offered are not new to St Vincent and the Grenadines (SVG).

He mentioned these matters on Monday, November 17, 2025 at Cabinet Room at the signing of an agreement with American investor Zachary Bayman- who signed the agreement on behalf of Limestone and Palm Island Resorts Limited- that is expected to see the redevelopment of the Palm Island Resort and Spa, and the Anchorage Yacht Club on Union Island. Both businesses were destroyed by Hurricane Beryl on July,1, 2024.

Dr. Gonsalves said the increased revenue that is generated by the construction of hotels and other tourist-related accommodation strengthens the financial performance in other areas and helps build out on critical, transformative infrastructure, like the Argyle International Airport (AIA).

He said the signing of the agreement means that the government is doing its part to facilitate the realization of the redevelopment of Palm Island Resort and Anchorage, and they have provided fiscal incentives under the Hotels Aids Act.

“We are providing 100% duty free concessions on construction material and equipment during the construction phase.

“That’s normal, 100% duty free concession during the operating phase on all items required for the running of a five -star resort, including a 15 year, under the Hotel Aids Act, a 15-year tax holiday, after which 50% of the going rate will be paid for five years thereafter…full rate of income tax would be applicable,” the Prime Minister pointed out.

He said that by facilitating with concessions, the country gets a US$100 million investment in the Palm Island Resort of which the government owns 12 percent.

“Now if we don’t facilitate with concessions, we wouldn’t have the investment. We now have the workers being employed during the construction phase…we wouldn’t have the 200 full time employees, and we wouldn’t have all the requisite spin-offs with farmers and fisherfolk and local businesses,” he pointed out.

“That’s why the incentive regime is put in in this way. There are some people who think that you could attract significant capital without giving concessions. They’re living in dreamland. They’re not realistic people.”

The concessions given to Sandals Resort has led to much talk, including in political circles. Sandals has since announced they will be building another resort here.

The PM said that the concessions are on par with what happens “all throughout the Caribbean”.

“In fact”, he said on Monday, “in some Caribbean countries…the concessions are far more significant than these”.

The Prime Minister also pointed out that the agreement states, “for the avoidance of doubt” that the Value Added Tax (VAT) on accommodation, food and beverage and the climate resiliency levy payable by each guest shall be collected by the company and handed over to the government, while the government will also earn revenue through Pay as you Earn (PAYE), taxes paid by the 200 or more full time employees who will be working at both facilities

Dr. Gonsalves pointed out as well that the development of the Palm Island Resort and Spa, the Anchorage Resort will contribute to the revitalization of the economy in the Southern Grenadines, and by extension, the entire domestic economy.

The contract will see a complete redevelopment of the Palm Island Resort and Spa and the Anchorage Yacht Club on Union Island and is expected to inject some US$100 million into the Grenadines over the next 20 to 30 months.

It was noted on Monday that Hurricane Beryl destroyed more than 60 percent of Palm Island’s infrastructure and as a result, owner James Lane sought new investment partners, eventually joining forces with Bayman.

Palm Island will be rebuilt as a luxury five-star resort with 34 free-standing hotel bungalows (24 one-bedroom suites and 10 two-bedroom suites) and 31 private villas (three- and four-bedroom units).

There is also expected to be two restaurants, two swimming pools, a beach club, a kids club, a spa and fitness center, a tennis court and a yoga studio. The resort will also feature expanded aquatic activities.

The redeveloped Anchorage Resort on Union Island will be constructed as a four-star, bohemian-style property with 30 to 40 rooms, a pool, restaurant, beach club, and the re-establishment of the popular kite-surfing school.

More than 200 full-time jobs are expected to be provided once the resorts are operational and during construction. Phase one will see the employment of between 100 and 150 workers, increasing to 150 to 200 in the other phases.