Starting a Business in Montserrat: A Step-by-Step Guide (With Tax and Customs Incentives)

Starting a business in Montserrat can be a rewarding venture, especially with support from legislation designed to encourage micro and small enterprises. If you’re considering launching a new company on the Montserrat, this guide walks you through the key steps and how to access tax and customs exemptions to help you save money in the process.

This article is based on these two legal frameworks:

• Micro and Small Business Act: This act provides a regulatory framework to facilitate the growth of the small business sector in Montserrat. It outlines the definitions, requirements, and support mechanisms for micro and small enterprises. Download MSB Act
• Companies Regulations 2024: These regulations detail the procedures for company registration, reporting requirements, and exemptions applicable to certain businesses. (Financial Services Commission Montserrat)

Step 1: Choose the Right Business Structure

First, decide how you want to operate:

• Sole Proprietorship – Ideal for individuals operating under their own name.
• Partnership – For two or more co-owners sharing profit and liability.
• Company (Incorporated) – Offers limited liability protection.
• Non-Profit Organisation (NPO) – For charitable or community-focused missions.

Each has unique benefits and obligations, including different reporting requirements under Montserrat’s Companies Regulations 2024 available via fscmontserrat.org.

Step 2: Register the Business

• Name Reservation: Propose a unique business name and reserve it with the Registrar.
• Prepare Documentation: Depending on your business structure, prepare the necessary documents such as Articles of Incorporation, Partnership Agreements, or NPO constitutions.
• Submit Application: File your application with the Registrar, including all required documents and applicable fees.Financial Services Commission Montserrat
• Obtain Certificate: Upon approval, you’ll receive a Certificate of Registration or Incorporation.

To qualify for certain incentives, your business must be registered under the Micro and Small Business Act.

Eligibility Criteria:

• Micro Business: Annual sales ≤ EC$100,000; Net assets ≤ EC$75,000.
• Small Business: Annual sales between EC$100,001 and EC$1,000,000; Net assets ≤ EC$500,000.

How to Apply:

Submit *Form 1 along with:

• Your business name and incorporation/registration certificate.
• The applicable fee (EC$100 for micro businesses, EC$150 for small businesses).
• Any additional details required by the Registrar.

Registrations are valid for 15 months and can be renewed using Form 2.

*Forms located at the back of the MSB Act.

Step 3: Apply for Tax and Customs Exemptions

Montserrat’s government offers several fiscal incentives for registered micro and small businesses, including:

Available Exemptions (Section 14 of the Act):

• Import duty and consumption tax waivers on:
  • Building materials
  • Furniture and furnishings
  • Equipment, appliances, machinery, and tools
  • A business vehicle
• Income tax exemption for up to five years.
• Stamp duty exemption, including on land transfers.

How to Apply:

1. Complete Form 6 (Application for Exemption), which requires:
   • Your registration certificate (or renewal certificate)
   • Business and contact details
   • Type and value of items you want exemptions for
   • The purpose of each exemption
   • Declaration of past exemptions
2. Submit to the Micro and Small Business Committee, which will assess your application and recommend it to the Minister responsible for Trade.
3. Final Approval comes via an Order issued by the Governor, based on Cabinet’s advice, confirming the exemptions granted.

Note: You must present this Order to Customs or Inland Revenue when claiming the exemption.

Step 4: Maintain Compliance

To keep your benefits:

• Stay current with your Social Security contributions.
• Submit annual financial statements to the Registrar within three months of your financial year-end.
• Maintain proper records of all exempted goods and allow inspections by Customs and the Committee.
• Licensing: Obtain necessary licenses or permits specific to your industry.(Financial Services Commission Montserrat)
• Tax Obligations: Register for and remit taxes as required by the Inland Revenue Department.(Financial Services Commission Montserrat)
• NPO Registration: If operating as an NPO, register with the NPO Supervisor and adhere to reporting and record-keeping obligations. (Financial Services Commission Montserrat)

Failure to comply may result in revocation of your registration and repayment of exempted amounts.

Step 5: Leverage Government Support

The Ministry of Trade offers technical assistance to help with:

• Business planning
• Marketing and packaging
• Export readiness
• Participation in overseas trade events

Stay connected with relevant government departments for ongoing support.

• Financial Services Commission (FSC): Provides guidance on financial regulations and compliance.(Financial Services Commission Montserrat)
• Government of Montserrat: Offers information on business incentives, grants, and support programmes.
• Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC): Offers loan guarantee products to help micro-entrepreneurs grow their small businesses. (eccb-centralbank.org)

Ready to Start?
Visit fscmontserrat.org to access updated forms and regulations. You can also find the full Micro and Small Business Act and guidance from the Financial Services Commission.

Download MSB Act

Montserrat is open for business. Make sure yours is ready to thrive.