Barbados
Barbados is one of the premier traditional offshore jurisdictions, first entering the arena of international business and financial services in 1977. The Government of Barbados has been proactive in promoting the jurisdiction as an international financial centre, and not just an offshore centre, by enacting legislation for international business companies, international banking, exempt insurance and management companies, ship registrations and societies with restricted liability.
International Business Companies in Barbados
A key piece of legislation is the International Business Companies Act of 1991 which defines an International Business Company (IBC) as a company that carries on business in manufacturing, international trade and commerce from within Barbados. Features of the Act include:
- Tax on income on a sliding scale, from a maximum of 2.5% to a minimum of 1%.
- Exemption from all withholding taxes
- No capital gains tax or estate duty.
- Tax credit in respect of taxes paid outside of Barbados is allowable but only insofar as it does not reduce the tax payable in Barbados to a less than 1%.
- Freedom from exchange control.
- Audited financial statements, where required must be filed with the Ministry of Finance.
- Tax concessions for specially qualified persons
- Bearer shares are not permitted
- An IBC can keep books and records in a foreign currency.
- Imports of equipment and machinery free of customs duty, consumption tax and stamp duties
- May apply for a guarantee that all or any of the benefits and exemptions in the Act will be valid for 15 years.
- An IBC which is solely owned by an Offshore Trust under the management of a licensed Barbados International Bank is exempt from tax if its activities are restricted to buying, holding or managing securities.
Double Tax Agreements
A unique feature of Barbados, and which sets this jurisdiction apart from other offshore centres, is the existence of double tax treaties with the following countries: the United States, Canada, Austria, United Kingdom, Finland, The Netherlands, Norway, Malta, Sweden, Switzerland, Cuba, Venezuela, China, Mauritius, Botswana and the rest of the Caribbean Community (CARICOM).
The Mercatoria Group predicts that Barbados will be a significant jurisdiction from which to implement and administer offshore solutions to ultra high net worth clients resident in treaty countries to which Barbados is a treaty partner.
