Barbados Sponsored by Invest Barbados
Why Us
Barbados is one of the leading international business and financial centres in the Western Hemisphere. It has established an excellent reputation among investors as a location from which to conduct international business of substance, such as financial services, information and communication technology (ICT) and niche manufacturing.
The OECD in its April 2009 "A Progress Report on the Jurisdictions Surveyed by the OECD Global Forum in Implementing the Internationally Agreed Tax Standard" recognised Barbados the only independent Caribbean nation that has substantially implemented the internationally agreed tax standard.
Barbados is an open economy, ranked by the Index of Economic Freedom 2009 as the 4th freest economy in the Americas and the 22nd in the world.
Business-friendly Environment
In Barbados, investors will find transparent policies and effective laws that enhance competition. No restrictions are imposed on foreign ownership of business enterprises.
Starting and operating a business are straightforward and free from burdensome regulation. An International Business Customer Charter details the commitments of regulatory agencies to provide swift, efficient and professional service to the international business sector.
Barbados has a strong legal system based on English common law. Property rights and intellectual property are well protected. An independent judiciary ensures the impartial and effective resolution of disputes.
The country’s low crime rate ensures a secure environment for investors.
Auditing and reporting standards are strong, ensuring transparency in the private sector. Barbados’ freedom from corruption rates highly: Transparency International’s Corruption Perception Index 2008 ranks Barbados as 4th in the Americas and 22nd among 180 countries.
Strong Human Capital
Barbados’ world class educational system produces a highly skilled, English-speaking labour force.
The UN Human Development Index 2008 ranks Barbados 3rd in the Americas, after Canada and the United States, and 37th in the world in respect of educational attainment, as measured by adult literacy and enrolment at the primary, secondary and tertiary level.
The presence of several tertiary and training institutions provides the work force with opportunities to continuously upgrade its skills. Barbados is home to a campus of the University of the West Indies (UWI), which has partnerships with universities in the US, Canada, Europe and China. The island also has institutions which offer training in management, business administration, foreign languages, and technical and vocational education.
In Barbados, investors can readily access the services of tax advisors, reputable international banks, global accounting firms, lawyers, management companies offering the full range of corporate services and institutional investment managers.
High-Quality Infrastructure and Technological Readiness
Barbados has a well-developed infrastructure. The World Economic Forum’s Global Competitiveness Index 2008/2009 ranks Barbados as 3rd in the Americas and 20th in the world in respect of the quality of its overall infrastructure.
The island features an extensive network of roads, an award-winning seaport and a modern international airport offering daily connections to countries in North America, the Caribbean and Europe.
The country has a solid and extensive telecommunications network. Firms have access to state-of-the-art technologies and ICT penetration rates are high.
Incentives and Treaty-based Business
Investors that use Barbadian entities to conduct international business enjoy tax and other incentives locally and may also benefit from the tax advantages offered by Barbados’ network of double taxation agreements.
Barbados is a reputable low-tax jurisdiction for international business, having a high level of transparency and disclosure and procedures for tax information exchange.
Incentives
Barbados offers a range of vehicles through which international business can be conducted.
The International Business Company (IBC) and International Society with Restricted Liability (ISRL) can be used to conduct business with non-residents. In practice, these entities are used for a diverse range of activities, including holding vehicles for real estate, trading, the provision of services and manufacturing. The cost enjoyed by IBCs and ISRLs in Barbados are summarized in the table below.
| IBC | ISRL | |
| Corporation Tax | Ranges from a maximum of 2.5% to a minimum of 1%, depending on the level of income Foreign tax credits are available to the extent that they don’t reduce the tax payable in Barbados to less than 1% of income Exempt if the company’s shares are all owned by an Offshore Trust, the company is managed by an International Bank and its activities are restricted to buying, selling, holding or managing securities | Ranges from a maximum of 2.5% to a minimum of 1%, depending on the level of income Foreign tax credits are available to the extent that they don’t reduce the tax payable in Barbados to less than 1% of income
|
| Income tax paid by specially qualified non-residents whose services are required for the business | 35% to 60% of the individual’s earnings or fees may be exempt, depending on the level of income earned | 35% to 60% of the individual’s earnings or fees may be exempt, depending on the level of income earned |
| Withholding Tax on income paid to non-residents | Exempt | Exempt |
| Tax on capital gains | Not imposed in Barbados | Not imposed in Barbados |
| Taxes on transfers of its securities and assets to non-residents | Exempt | Exemption granted in practice |
| Import of equipment and machinery necessary for conduct of business | Exempt from customs duty, consumption tax and stamp duties | Exempt from customs duty, consumption tax and stamp duties |
| Exchange controls | Exempt | Exempt |
| Guarantee of benefits | May be granted for 15 years | May be granted for 30 years |
Barbados also offers incentives to vehicles that are used specifically for the provision of international financial services, namely, International Banks, Exempt Insurance Companies, Qualifying Insurance Companies, Offshore Trusts and International Trusts. Special incentives are also extended to companies engaged in international manufacturing, ICT and the ownership and operation of ships. These incentives are detailed in the section on ‘Sector Strengths’.
Expanding Treaty Network
Double Taxation Agreements
Barbados’ network of Double Taxation Agreements (DTAs) offers tax advantages to investors that use Barbadian resident entities to conduct business in other countries.
Under Barbados’ DTAs, the other contracting state imposes preferential withholding tax rates on income paid to qualifying Barbadian resident entities or lower rates of tax on capital gains derived by qualifying Barbadian resident entities.
Barbados is a popular holding company jurisdiction for investment into China. Under its DTA with China, capital gains derived by a Barbadian resident from the disposal of shares in a Chinese company are exempt from tax in China, even if the assets of the Chinese company are composed mainly of immovable property situated in China. Barbados’ treaty with China is the last treaty with that country to provide for such a complete exemption from capital gains tax.
Generally, the benefits of these treaties extend to Barbados offshore entities, such as IBCs and ISRLs, which receive tax incentives in Barbados.
Bilateral Investment Treaties
Barbados has entered into treaties for the promotion and protection of investment with Canada, China, Cuba, Germany, Ghana, Italy, Mauritius, Switzerland, the UK and Venezuela.
- Non-discriminatory treatment of their investments
- Adequate, prompt and effective compensation in the event of expropriation of their investments by the host state
- The transfer of investments and returns held in the host state
- Recourse to international arbitration to settle disputes with the host state
