Business Barbados

Updated April 5, 2014

Audit Requirements

For a Company registered in the island of Barbados, there is an automatic requirement for an audit once the Company is a public company; or where the most recent financial statements show that its Gross Revenue or its Assets:

  • Exceed BB$1,000,000 for any period prior to January 1st, 2011;
  • Exceed BB$2,000,000 for any period from January 1st, 2011 to December 31st, 2013; or
  • Exceed BB$4,000,000 for any period from January 1st, 2014

In such a case, the financial statements are required to be filed with the relevant regulatory body along with a copy of an audit report.  All such audit reports should be signed by a professional member in good standing with the Institute of Chartered Accountants of Barbados, who holds a practicing certificate.

Other Reporting Requirements

The exact full reporting requirements are dictated by the particular incorporation details of each specific entity. The various Acts and corresponding reporting requirements are as follows. (Note that the particular Act should be read in detail for additional guidance)

Societies with Restricted Liability Act

Societies organised under the Societies with Restricted Liability Act.  The annual financial statements of a Society whose gross revenue or whose assets:

  1. Exceed BB$1,000,000 for any period prior to January 1st, 2011;
  2. Exceed BB$2,000,000 for any period from January 1st, 2011 to December 31st, 2013; or
  3. Exceed BB$4,000,000 for any period from January 1st, 2014

shall be audited at least once in every financial year by an auditor appointed by the Society.  A copy of the audited financial statements should be filed with the Registrar on an annual basis.

An annual tax return is also required to be filed with the Commissioner of Inland Revenue where taxes are paid on profits and gains of each income year at specified rates based on a sliding scale. See Tax section for further guidance.

Societies organized as Exempt Societies with Restricted Liability are required to pay an initial licencing fee of BB$850 and an annual renewal fee of the same amount.  Renewal of the licence is required on or before the 31st of December to avoid related penalties.

Exempt Insurance Act

Exempt Insurance Companies (EICs) are incorporated or registered under the Companies Act of Barbados and secure a licence under the EIC Act. This means that it is a Company in the business of insuring risks located outside of Barbados in respect of which premiums originate outside Barbados.

On an annual basis, audited financial statements are required to be filed with the Financial Services Commission (note 1). At this point in time, the documents to be presented are the audited financial statements and a solvency certificate. The solvency certificate indicates whether the Company has met the minimum solvency requirements of the Act. At any point in time, the minimum solvency is US$125,000.

Under the Act, the financial statements and solvency certificate are required to be certified by a suitably qualified auditor.

On an annual basis, financial statements are also required to be filed with the Commissioner of Inland Revenue. Exempt Insurance Companies are subject to tax at zero percent on its profits and gains for the first 15 years of its operations; then at 8% on its profits and gains up to BB$250,000; thereafter at zero percent.

Companies registered under the Exempt Insurance Act are required to pay an initial licencing fee of BB$500 and an annual renewal fee of BB$20,000. Renewal of the licence is required on or before the 1st of January of the year to avoid related penalties.

Insurance Act

Companies incorporated or registered under the Companies Act of Barbados are allowed to register as ‘Qualifying Insurance Companies’ under the Insurance Act, 1996.

A QIC is a registered insurer under the Insurance Act, 1996-32 in respect of which

  1. at least 90% of gross revenues from insurance premiums originate outside the Caribbean Common Market.
  2. at least 90% of all risks insured originate outside the Caribbean Common Market.
  3. the Financial Services Commission (note 1) has issued a Certificate of Qualification.

Companies registered under either this Act or the Exempt Insurance Act, are allowed to apply for registration under the other. However, at this point in time they need to satisfy the Financial Services Commission (note 1) that they meet the requirements of the other Act and would have to cancel their original registration under the first Act.

Qualifying Insurance Companies are required to maintain a minimum level of solvency based on the level of business written and there are certain qualifying assets and liabilities which are specified in the Act.

On an annual basis, audited financial statements are required to be filed with the Financial Services Commission (note 1). At this point in time, the documents to be presented are the audited financial statements and a solvency certificate. The solvency certificate indicates whether the Company has met the minimum solvency requirements of the Act.

In addition, where a QIC carries on insurance business other than international insurance business, then it must publish its audited annual financial statements in the Gazette and in one daily newspaper within four months of year end.

Under the Act, the financial statements and solvency certificate are required to be certified by a suitably qualified auditor.

On an annual basis, financial statements are also required to be filed with the Commissioner of Inland Revenue. Qualifying Insurance Companies are subject to corporation tax under the provisions of the Income Tax Act of Barbados but are eligible for a foreign currency earnings allowance based on the percentage of the premiums from foreign insurance business to total premium income. QICs are exempt from premium taxes.

Companies registered under the Insurance Act are required to pay an initial licencing fee of BB$500 and an annual renewal fee of BB$20,000. Renewal of the licence is required on or before the 1st of January of the year to avoid related penalties.

Segregated Cell Companies

There is specific guidance as it relates to the solvency requirements and the audited financial statements for Segregated Cell Companies (SCC’s). The solvency requirements are as follows:

  • The solvency ratio for the core is required to be a minimum of US$125,000. If it conducts general or long-term insurance business, the solvency ratio is determined in accordance with the guidance.
  • The solvency ratio for each cell is required to be a minimum of US$12,500. This is amended based on the level of business written in any given period.

As it relates to the financial statements, with effect for periods commencing on or after January 1, 2010, the core and each cell are required to file separate audited financial statements along with a separate audit report on each. A full set of financial statements (i.e.statement of financial position, statement of income and retained earnings, statement of cash flows and notes to the financial statements) is required to be included in the submission for the core and each cell. These audited financial statements are required to be submitted no later than six (6) months after the year end.

International Business Companies Act

Companies incorporated or registered under the Companies Act of Barbados may procure a licence under the International Business Companies (IBC) Act of Barbados to carry on the business of an international business company if it intends to carry on from within Barbados the business of international manufacturing or international trade and commerce.

On an annual basis, the licence should be renewed to ensure that the Company can continue engaging in such business.

Such companies are required to pay corporation taxes on profits and gains on an annual basis at rates as specified under the Act and are required to file a tax return at that point in time with the Commissioner of Inland Revenue.

On an annual basis, provided that the assets or gross revenue:

  1. Exceed BB$1,000,000 for any period prior to January 1st, 2011;
  2. Exceed BB$2,000,000 for any period from January 1st, 2011 to December 31st, 2013; or
  3. Exceed BB$4,000,000 for any period from January 1st, 2014

audited financial statements should be forwarded to the Minister of Industry and International Business.

The benefits under this Act are available to a licencee for a period of fifteen years from the date of registration.

Companies registered under the International Business Companies Act are required to pay an initial licencing fee of BB$850 and an annual renewal fee of the same amount. Renewal of the licence is required on or before the 31st of December to avoid related penalties.

International Financial Services Act

Companies incorporated or registered under the Companies Act of Barbados may procure a licence under this Act, if they intend to receive foreign funds for loans, investments or other such purposes as approved. On a quarterly basis, licencees are required to submit to the Central Bank of Barbados in a prescribed form, a quarterly statement of its assets and liabilities. This should be submitted within 21 days after the end of the quarter.

On a quarterly basis, licencees are required to submit to the Central Bank of Barbados in a prescribed form, a quarterly statement of its assets and liabilities. This should be submitted within 21 days after the end of the quarter.

On an annual basis, audited financial statements are required to be submitted to the Central Bank of Barbados. This should be done no later than four (4) months after year end and should contain an auditor’s report and director’s report.

A copy of the audited financial statements should also be published in the Official Gazette.

Such companies are required to pay corporation taxes on profits and gains on an annual basis at rates as specified under the Act and are required to file a tax return at that point in time with the Commissioner of Inland Revenue.

Companies registered under the International Financial Services Act, which accept third party deposits or conducts third party business are required to pay an initial licencing fee of BB$100,000 and an annual renewal fee of the same amount.

Companies registered under the Act which fall outside of the above mentioned category (i.e. they do not accept third-party business) are required to pay an initial licencing fee of BB$50,000 and an annual renewal fee of the same amount.

The licence for companies registered under this Act is required to be renewed annually by the 1st of January. Penalties are not imposed on such entities for late filings.