Grenada Digital Nomad Visa

Local tax regime and what it means for you

Grenada runs a territorial tax system, and for this Remote Employment Permit the regime is explicitly territorial: foreign-source income sits outside Grenadian income tax. That means your remote salary from a US, Canadian, UK, or EU employer, freelance invoices to foreign clients, and business-owner income from a company registered abroad are treated as foreign-source and, for this visa class, are exempt from local income tax. Likewise, dividends from ETFs in a foreign brokerage, interest from foreign bank accounts, and rental income from property in your home country remain outside Grenada’s tax net.

Where you do need to pay close attention is income actually generated in Grenada. If you started invoicing Grenadian companies, opened a local shop, or shifted your employer to a Grenadian entity, that would cease to be foreign-source and would be taxed locally under standard rules. The Remote Employment Act is drafted to block this scenario for permit holders by banning local work and local business income in the first place.

Capital gains on foreign investments

For holders of this digital nomad permit, capital gains on foreign investments – for example, selling index funds or ETFs in a US brokerage account – are treated as foreign-source. Under Grenada’s territorial approach for Remote Employment Permit holders, those gains are exempt from local income tax. So harvesting $50,000 in long-term gains from a Vanguard or Interactive Brokers portfolio while living in Grenada does not, by itself, trigger Grenadian tax, as long as the assets and broker remain offshore.

Tax residency triggers and filing

Grenada’s general tax residency tests and filing requirements for Remote Employment Permit holders are not publicly specified in the same structured way some larger jurisdictions publish. However, under the Remote Employment Act, holders are presumed non-resident for local tax on their foreign-source income, which is the only income stream most visa users have. There is no disclosed day-count threshold in the visa data for when a digital nomad becomes a local tax resident, and there is no separate tax registration or tax-status deadline listed for this visa type.

In practice, because local work is banned and foreign income is outside scope, many permit holders have no Grenadian income tax return to file at all. If you deliberately create Grenadian-source income (for example, you ignore the rules and start consulting for local companies), you would lose the protection of the Remote Employment framework and fall into ordinary resident tax rules, with associated filing duties.

Tax treaty status

The presence or absence of a comprehensive income tax treaty with the United States is marked as unknown in the data for Grenada. An “unknown” flag means you cannot assume any specific treaty protections on withholding tax, double taxation relief, or treatment of pensions and Social Security; those obligations default to each country’s domestic law. There is no indication of a totalization agreement for Social Security either. For non-US nationals, similar caution applies: check whether your home country has its own treaty with Grenada if you expect Grenadian-source income in the future.

For US Citizens and Green Card Holders

US persons on this visa still face full US worldwide taxation regardless of Grenada’s territorial regime and the local exemption of foreign income. The main US tools are the Foreign Earned Income Exclusion (FEIE), Foreign Tax Credit (FTC), and foreign asset reporting.

FEIE, elected via Form 2555, can exclude up to $126,500 (2024 figure) of *earned* income – remote salary, self-employment, or consulting – per qualifying person. It does not cover dividends, capital gains, rental income, pensions, or Social Security. Because Grenada is purely territorial for your foreign income and does not tax that income, FEIE’s value here is driven solely by your ability to meet the Physical Presence Test (330 full days outside the US in any rolling 12‑month period) or the Bona Fide Residence Test. On a 12‑month digital nomad permit where you are genuinely based in Grenada, the Physical Presence Test is usually the more straightforward path.

The Foreign Tax Credit on Form 1116 only helps where you pay non-US income tax on a given income stream. For the income you are earning under this visa – foreign-source salary or business income that Grenada does not tax – your Grenadian effective tax rate is 0%, so there is no foreign tax to credit against US liability. If you later earn Grenadian-source income (contrary to visa rules), any Grenadian tax paid on that slice could generate FTC relief, but that is outside the intended use of this permit.

Reporting obligations remain heavy even if your Grenada tax bill is zero. FBAR (FinCEN 114) is required if the aggregate value of your non-US financial accounts – including any Grenadian bank account or brokerage you open voluntarily – exceeds $10,000 at any point in the year. FATCA Form 8938 may also apply at higher thresholds, depending on filing status and whether you reside abroad. These are separate from your regular Form 1040 and carry steep non‑willful penalties starting around $10,000 per missed year.

For a US digital nomad or FIRE retiree in Grenada, the optimal setup usually involves: (1) using Form 2555 to shelter as much earned income as possible when you meet the 330‑day test, (2) accepting that passive income (dividends, capital gains, interest) is fully taxable in the US because Grenada does not create FTCs against it, and (3) staying on top of FBAR/FATCA for any non-US accounts you maintain. Budget $1,500–$3,000 in year one for a US CPA who specializes in expat taxation to handle FEIE/FTC/FBAR and a local Grenadian tax advisor to confirm you genuinely have no filing duty under the Remote Employment Act; the combination usually pays for itself in avoided penalties and clean positioning if the IRS or Grenadian authorities ask questions later.