Anguilla Economic Summary

Anguilla is one of the Caribbean's smallest islands but produced some of the region's highest growth rates during the late 1980's. This growth was a direct consequence of the Government's emphasis on up-market tourism which led to a period of rapid construction, (new hotels, rental villas, and condominiums), which substantially expanded the island's tourism sector. Several major infrastructure projects contributed to the construction boom, which helped to reduce unemployment from about 26 percent in the mid 1980's to barely 1 percent in 1990.

The rapid growth of the late 1980's has decreased. In 1991, real GDP experienced a negative growth of 3.7 percent compared with 6.6 percent in 1990 and an average of 12 percent during 1985-1989. The slow-down is attributed primarity to the completion of several major tourism and infrastructure construction projects and the effects of the U.S. recession. Despite the slow-down unemployment remains low at 7 percent and inflation is moderate at 3 percent.

Anguilla's traditional industries, fishing, farming, salt production, livestock rearing and boat building, have in recent years been overshadowed by commercial and residential construction, the tourism industry and a developing Offshore Finance Sector.

Two thirds of Anguilla's visitors are American but the British and European markets have been growing in recent years. In 1991, the number of tourists (long stay visitors) fell slightly reflecting a decline in U.S. visitors as a result of the Gulf War and the lingering recession. Despite the decrease in long-stay tourist arrivals, total visitors to the Island rose moderately in 1991 and again more significantly in 1992 and 1993. Output growth bounced back to 7.1 percent in 1992 and 7.7 percent in 1993.

Anguilla is currently actively promoting the island as not only a premier tourist destination, but as the offshore jurisdiction for discerning investors. The establishment of the offshore finance industry is aimed at diversifying and complementing the tourist industry.

In November, 1994 the Anguillian Legislature enacted an impressive package of financial legislation, a modern Companies Ordinance, an International Business Companies Ordinance, Trusts Legislation, Partnership and Limited Partnership Ordinances, a Limited Liability Companies Ordinance, a Fraudulent Dispositions Ordinance and a Company Management Ordinance. New domestic and offshore insurance legislation will also be prepared in 1995.

The Companies Registry will be fully computerized by late 1995 to provide on-line registration of companies and remote filing for both local and overseas agents. It is envisaged that the Registry will be able to provide services worldwide - 24 hours a day, 365 days a year. This will facilitate overseas agents operating in different time zones.

Key Economic Indicators (1993)

Currency and Exchange Rates:
       EC $1.00 = US $0.37 (fixed)
       US $1.00 = EC $2.70 (fixed)

Annual Rate of Growth of GDP (constand dollars):   7.7%
GDP                US $51.6 million
Per Capita GDP:    US $5,378 
Unemployment Rate: 7%

Exports of Goods and Services
    US $51.17 million.  Includes chiefly fish and lobster.

Imports of Goods and Services:
    US $69.81 million.  Composed of fuels, food products,
    chemicals, manufactured goods and textiles.

Balance on Current Account:  US $10.57 million

Major Trading Partners (Exports and Imports):
    U.S.A., Puerto Rico and St. Maarten

                       1990      1991     1992     1993
Visitor Arrivals:     90,506    90,544   93,180   111,350
Inflation:              1%        7%       3%       4%
Balance of Payments:   2.8m      0.2m    (1.3m)   (1.1m)

Trade Investment Incentives

Anguilla has a consumption-based tax system that promotes savings, investment and growth. As such, there are no personal or corporate income taxes, capital gains taxes, or inheritance taxes.

Foreign Exchange: There is no restriction on foreign exchange or exchange controls; monies in any currency are freely transferable in and out of Anguilla. The Government levies a 2% charge on the exchange of EC$ to US$. Although the official currency is the East Caribbean dollar, the US dollar is widely traded and accepted.