Business Barbados

Generally, business dealings which encourage public disorder or consist of offences against public decency are prohibited. Casinos are not permitted, but there are two authorised lotteries.

The Government of Barbados focuses heavily on improving the investment climate of Barbados and on enhancing the infrastructure to support increasing business activity. The Government’s policy is to support productive investment. There are therefore no restrictions on foreign ownership of business enterprises and bureaucratic requirements are kept to a minimum.

The investor’s liability to partners, investors or others will depend on the nature of his business. For example, as a limited partner his liability will be limited to the amount of his capital.

In relation to capitalisation, all foreign investment is subject to the approval of the Government (usually the Minister of Industry, Commerce and Business Development or the Minister of Finance) and the influx of finances to service any entity by foreign currency must be declared to the Exchange Control Authority at the Central Bank of Barbados.

Barbados is known for its well-developed network of bilateral investment treaties. Investors can enjoy incentives such as foreign currency tax credit mechanisms, tax concessions for informatics service companies and low tax rates when an international export business is conducted by licensed international business companies, licensed international financial institutions and international societies with restricted liability. Some investors can also benefit from exemptions from withholding tax on payments made to non-residents and exemptions from import duties and tax on capital gains.

The Barbados Investment & Development Corporation

The Barbados Investment & Development Corporation (BIDC) is the investment agency of the Barbados Government, with special responsibility for export promotion and the establishment or expansion of business enterprises in Barbados. In April 2014, the BIDC announced that it would be introducing a new fee structure for the certification of export documents. The BIDC also administers government’s incentive programme for investment promotion, providing free advisory services for companies looking to establish business entities on the island especially in the areas of information processing and manufacturing. The BIDC offers additional services through its offices in New York, Miami, Los Angeles, Toronto and London.

Invest Barbados

The Barbados International Business Promotion Corporation (BIBPC) was established as a statutory corporation on November 10, 2005. The corporation subsequently gained permission to trade under the new name Invest Barbados in 2005; however, it wasn’t until October 1, 2006 that the business became operational and the first employee was hired. Effective January 1, 2007 the International Business Division of the Barbados Investment and Development Corporation (BIDC) was transferred to Invest Barbados. Invest Barbados is responsible for the promotion of international business.

Invest Barbados (IB) is an economic development agency of the government of Barbados. IB is responsible for attracting, winning and sustaining international investment for Barbados. The corporation is also responsible for unleashing the export potential of the indigenous services sector and helping to develop and manage the Barbados Business brand. Please visit the IB website at www.investbarbados.org

Investment policies

Barbados welcomes investment. It is a low-tax jurisdiction. As of April 2009, Barbados was included on the OECD’s White List that identifies the jurisdictions that have substantially implemented the internationally agreed tax standard.

The International Business Unit of the Ministry of Industry & International Business was set up to develop international business and financial services within Barbados. The Unit has principal responsibility for coordinating intra-governmental liaisons affecting the international business and financial services sector and is responsible for oversight of international business companies and international societies with restricted liability.

Commercial and Residential Real Estate Development

Land in Barbados is zoned for specific usage and prior permission to build or for a change of use must be obtained from the Town and Country Planning Department. Planning permission for the carrying out of any development of land within specified areas must be obtained from the Chief Town Planner.

Each application to the Chief Town Planner must include a plan that sufficiently identifies the land to which the application relates, and such other plans and drawings as are necessary to describe the proposed development. An application may take a minimum of several months to be processed. The fees involved are stipulated in the Town and Country Planning Regulations.

Consumer Protection Laws

The Consumer Protection Act Cap 326D makes provision for the protection and safety of consumers and for connected purposes.

The Consumer Guarantees Act Cap 326E amends the law relating to consumers upon the supply of goods or services, and the rights of redress against suppliers and manufacturers in respect of a failure of goods or services to comply with any such guarantees.

The thrust of the Fair Competition Act Cap 326C is to promote and maintain and encourage competition; to prohibit the prevention, restriction or distortion of competition and the abuse of dominant positions in trade in Barbados and within the Caricom Single Market and Economy; and to ensure that all enterprises, irrespective of size, have the opportunity to participate equitably in the market place.

The Fair Trading Commission Act Cap 326B provides for the establishment of a Fair Trading Commission to safeguard the interests of consumers, to regulate utility services supplied by service providers, to monitor and investigate the conduct of service providers and business enterprises, to promote and maintain effective competition, and for related matters.

Price Controls

The Miscellaneous Controls Act Cap 329 of the laws of Barbados, grants the Minister of Commerce, Consumer Affairs and Business Development, the power to regulate the prices at which goods may be sold. It also establishes the Prices Commission whose role it is to advise and assist the Minister on matters relating to the control of prices of goods.

Assistance to Investors in the Hotel Sector in Barbados

Persons investing in the tourism industry in Barbados are assisted by two main types of incentives provided under the Tourism Development Act, Cap.341 (Tourism Development Act) and the Refurbishing Scheme.

An investor whose project is approved under the Tourism Development Act is entitled to import, free of duty, the necessary building materials and items from a wide ranging list. The investor is also allowed to write off the capital expenditure in building or extending (or purchasing) the hotel, against revenue for income tax purposes. If the capital expenditure is more than can be written off in one year, it may be carried forward for a maximum of fifteen years.

Under the Refurbishing Scheme, a person who owns or manages a hotel which is in operation and is registered with the Barbados Tourism Authority, may apply in writing to the Permanent Secretary, Ministry of Finance, Economic Affairs and Energy for permission to import, free of customs duty, items from a wide ranging list, which are required for the refurbishing or upgrading of the hotel. This list does not include building materials; those are covered under the Tourism Development Act.

Franchises

The Minister responsible for Finance has discretion to grant a franchise licence under the Franchises (Registration and Control) Act, Cap.I79A. The Act provides for the licensing, registration and control of businesses which operate on franchise in Barbados and for related matters. The purpose of the Act is to provide (a) for the licensing, registration and control of businesses operated on franchise and businesses operated by any person, other than a citizen or permanent resident, using his own mark, product, service, technique, device, copyright, industrial design, or invention and (b) the orderly development of such businesses.

Agricultural Investments

Barbados’ promotional efforts in agriculture are aimed at improving the health and food security of its citizenry. The Ministry of Agriculture is the umbrella body in Barbados for various agricultural, animal and food protection agencies. The mandate of the Ministry of Agriculture is to transform and reposition the Agricultural Sector in Barbados through the promotion of an agribusiness approach to farming, with particular attention being paid to the effective use of resources, as well as the adoption of appropriate technology and sound management practices in order to achieve internationally competitive production, processing and marketing enterprises, which contributes significantly to social and economic development and food security, as well as the sustainable management of the natural resource base of the country.

The Barbados Agricultural Development and Marketing Corporation Act, Cap.254 of the laws of Barbados provides for the establishment of the Barbados Agricultural Development and Marketing Corporation (the “BADMC”) and for related matters. Some of the functions of BADMC include: to develop agriculture and to operate and participate in such agricultural projects as the Minister may approve, to facilitate Government’s policy with respect to rural development and land reform, to foster co-operation in agricultural development between the public and private sector and to stimulate and improve the production, marketing and processing of produce.

Electric Light and Power

The legislative framework for the energy sector is outlined in the Electric Light and Power Act, 2013-21, the Fair Trading Commission Act, Cap. 326B, the Income Tax Act, Cap.73 and the Utilities Regulation Act, Cap.282.

The current legislation does not facilitate, without a licence, the establishment of independent power producers (IPPs) which are commercial entities that generate and transmit electricity to the national grid for profit. The law, however, allows for domestic generation and consumption without a licence. Electricity tariffs and standards of service are set up by the Fair Trading Commission (the “FTC”) in accordance with the provisions of the Utilities Regulation Act. The FTC is vested with the task of ensuring that the electric utility company complies with the aforementioned Acts, and this is achieved by active monitoring of the company’s financial and operational principles and practices.

The Electric Light and Power Act, 2013-21 (ELPA) is the principal Act that regulates the supply of electricity in Barbados. It is “an Act to revise the law relating to the supply and use of electricity, to promote the generation of electricity from renewable energy, to enhance the security and reliability of the supply of electricity and to provide for related matters”.

The Government of Barbados has instituted a number of fiscal incentives to support renewable energy initiatives. The Fiscal Incentives Act, Cap. 71A grants import benefits and tax exemptions to solar water heater producers. Under the Income Tax Act, taxpayers may directly and fully deduct solar water systems from their taxes. In addition, all electric water heaters are subject to 60% consumption tax, which makes them financially unattractive.

In a more recent commercial thrust towards the utilisation of renewables, Barbados Light & Power Company Limited (BL&P) has been given planning permission to construct a wind farm at Lamberts in St. Lucy. Its designed generation capacity is 32 million kWh/year. BL&P introduced a renewable energy rider pilot programme which allows eligible customers with renewable power sources to sell excess power to the grid. All kWh sold to the grid are credited at 1.8 times the Fuel Clause Adjustment or 31.5 cents/kWh, whichever is greater. This rider provides a model for broad-based decentralised domestic and IPP grid connections in the future. Eligible customers are encouraged to participate as there is compensation for excess energy that would otherwise be wasted.

The Government of Barbados’ objective for renewable/alternative energy is to have approximately 29 per cent of all electricity consumption in Barbados being produced from renewable energy sources, along with a 22 per cent reduction of overall electricity consumption by the year 2029.

Advertising

The Protection Against Unfair Competition Act Cap.329A prevents businesses from engaging in certain conduct generally, such as making false or unjustifiable allegations that are likely to discredit another’s enterprise, or engaging in conduct that is likely to mislead the public with respect to another enterprise.

Environmental considerations

Barbados is a small island state whose economy relies heavily on tourism and foreign investment; as a result, care of the environment is high on the Government’s agenda.

The Government provides a free garbage collection service to all households in the island. The Ministry of Health and the Ministry of Environment and Drainage encompass a number of specialised Units, including the Coastal Zone Management Unit, Environmental Special Projects Unit, National Conservation Commission and the Environmental Engineering Division.

The Ministry of Health is responsible for health services generally, as well as sewage and solid waste disposal and environmental health.

There are numerous environmental regulations governing everything from rodent and mosquito control, communicable diseases, collection and disposal of refuse, swimming pools, nuisances, use of the coastal zones to construction planning regulations.