Daydreaming about escaping to a new life overseas? Chances are you are picturing a pristine sandy beach and a shining sun glinting off an azure blue sea. The waves lap gently against the shore as you enjoy the relaxed pace of island life, sipping at a rum cocktail. It’s tempting to daydream no longer and start packing!Antigua and Barbuda is one Caribbean country made of the titular islands and a handful of smaller ones, sitting east of Puerto Rico. Although not the most famous of Caribbean paradises, the country has escaped the intense development seen in the tourist trap resorts elsewhere in the region.
The country is a former British colony and remains part of the Commonwealth, speaking English and still celebrating Queen Elizabeth as head of state. The sleepy pace of life in Antigua and Barbuda is complemented by stable government and a diverse economy.
Although the paradise landscape and relative lack of trouble can make Antigua and Barbuda sound like the perfect place to settle down, it may not be the best spot to start up a business. The economy is beginning to slow down following a number of tragedies and scandals.
Tourism makes up about half of the country’s GDP, although this figure was once much higher. A series of strong hurricanes in the 90s saw much of the infrastructure destroyed and travellers opting to take their cash elsewhere. In 2017, Hurricane Irma swept through the islands, destroying 95 percent of Barbuda’s buildings and prompting a complete evacuation of island. Combined with some airlines cancelling services to the country, it looks like this mainstay of the economy is on the decline.
Although not classed as a tax haven, the country is advertised as “an attractive offshore jurisdiction.” The 2000s saw an influx of financial service businesses advising offshore investors in this area and rapidly developing the country as an industry sector. Investigations into illegal activities and money laundering found that Antigua and Barbuda’s regulations were found wanting. Although the government overhauled its regulations, a 2009 investigation by regulators in the United States revealed a massive investment fraud run by the Antigua-based Stanford Financial Group. The banking group has since collapsed and an ongoing investigation is revealing other irregularities.
One business that does seem to be going from strength to strength across the Caribbean is the hosting of online casinos. Antigua and Barbuda is a little behind the curve compared to Dominican Republic, for example.
Actually starting up a business in Antigua and Barbuda is not overly difficult; in theory, it is a simple as registering a name with the correct officials and signing up for medical cover, insurance and social security. In practice, the nuts and bolts of trading can be more involved.
The World Bank lists the country as 107th for ease of doing business, earning a rank of ‘medium’. British passport holders are free to come and go, as are Americans, Canadians, Australians and EU citizens. However, working in the country requires employers to show that a local person could not reasonably fill the role in order for expats to be eligible for expensive work permits.
Just getting a roof over your head can be difficult. Being a small island nation, space is at a premium, driving property prices higher and higher. Non-nationals need to apply for a licence to own property in Antigua and Barbuda, which is just one of many limiting factors for migrants.
Local banks are often reluctant to provide mortgages for non-nationals and there are even two-tier pricing systems for utilities. Getting a property connected to mains water and electricity can cost an unexpected fortune. Some new-build projects propose to include the connection costs in the final price tag, but regular payments need to be made when buying off-plan to ensure the building progresses.
Buying can cost up to USD$200 per square foot, with renting being almost as costly. Many visitors to the island are looking for a temporary escape rather than permanent move, and so end up renting luxury apartments for months rather than years at a high rate. Anyone looking to stay for the long haul may struggle to find business or living accommodation within their price range, and may also find financing options severely limited.
Property is not the only cost to be inflated in Antigua and Barbuda. As all supplies need to be flown or shipped in, the range of goods is limited and expensive. Classed as somewhere between moderate and expensive, the cost of living in the country is higher than for equivalent lifestyles in Europe or North America.
Business websites for the Caribbean all agree that Antigua and Barbuda is in a downswing, with the once-reliable tourism industry no longer promising growth. The cost of recovering from Hurricane Irma has stunted government investment in promotion of the islands and investment in new industry. Although fishing, cotton and retail have seen some improvement, they cater for a domestic market and are unlikely to spark any booms.
What Antigua and Barbuda does have in abundance is spectacular scenery and some prime spots for water sports and diving. Without a steady string of visitors, there is slim chance of this alone being a wise business investment for expats. However, if fun in the sun is reason enough for setting up overseas, it may be worth the risk.
Caribbean business articles advise entrepreneurs to get creative, pooling resources with other businesses and outsourcing when limited island resources make life difficult.
Nobody should go into a new business venture unprepared, but when setting up in an uncertain economy on a small island, failing to plan is as good as planning to fail.