The Government of Barbados has revised its policy on Special Entry Permits for High Net Worth Individuals (HNWI’s) and other property owners who wish to reside, retire or invest in Barbados. The policy revision was announced on Tuesday June 26 when Minister of Finance, Chris Sinckler, delivered the Barbados 2012 budget.
A HNWI is described as someone possessing assets in excess US$5m (BB$10m). An indefinite special entry permit may be granted subject to the sub-category the HNWI falls within. The individual may be required to submit copies of income tax returns or unaudited statements of net assets to show that they continue to meet the threshold. Should the threshold not be met for five years, the Special Entry Permit will be withdrawn.
Prerequisites for acquiring these permits include security checks, proof of adequate health insurance coverage and submission of police certificates of character. The Minister noted that changes were made given that existing immigration legislation was restrictive to the requests of credible foreign investors. He also noted that legislation did not adequately provide for retired staff of regional and international organisations who resided in Barbados for periods exceeding ten years and whose children were born here. Detailed information on immigration policy changes may be read by clicking the document labelled HNWI at the bottom of this article.
The Government also made amendments to the International Business and Financial Services sector in an effort to maintain Barbados’ competitive advantage as an offshore business jurisdiction. Changes were made to the tax rate on the highest band of taxable income for entities in the International Business sector for income years 2012 and 2013. The changes are applicable to International Business Companies (IBC’s), Societies with Restricted Liability (SRL’s) and International Banks.
The changes are as follows:
| Current Tax Rate | Proposed Tax Rate 2012 | Proposed Tax Rate 2013 |
|---|---|---|
|
2.5% |
2.5% |
2.5% |
|
2.0% |
2.0% |
2.0% |
|
1.5% |
1.5% |
1.5% |
|
1.0% |
0.5% |
0.25% |
The International Business and Financial Services sector contributes nearly US$500 million/BB$1 billion to the Barbados economy. The greatest portion of this spend does not emanate from direct taxes paid to the Barbados Government but from indirect spending in the Barbados economy. Real estate in particular, with earnings of just over US$15 million/BB$30 million in 2010 is one of the primary beneficiaries of this sector.
Rent of commercial office space and housing has increased over the period of 2008 to 2010, growing by 12% between 2008 and 2009 and more moderately by 5.6% between 2009 and 2010. This drop in growth is in line with the general economic downturn experienced over the period, and still being experienced currently.
Research conducted by the Economic Contribution Committee uncovered what has long been suspected, that the International Business and Financial Services sector is a major contributor to economic output in Barbados. In 2008 total earnings from the sector was US$430.1 million/BB$860.2 million. In 2009 this grew to US$486.5 million/BB$973 million and slipped to US$439 million/BB$878 million in 2010. These figures compare to US$2.15 billion/BB$4.3 billion in 2008, US$1.95 billion/BB$3.9 billion in 2009 and US$1.8 billion/BB$3.6 billion in 2010 for Travel and Tourism, according to the Travel and Tourism Economic Impact Report 2012 for Barbados, compiled by the World Travel and Tourism Council. Although not as high as the tourism numbers, the figures show that International Business and Financial Sector is very important to the Barbados economy.
The Economic Contribution Committee chaired by Dalia Littlewood of Freedom Financial Inc., was created to access the direct and indirect contributions of the International Business and Financial sector to the Barbados economy. The Committee was championed by the Barbados International Business Association (BIBA) whose mandate is to work in partnership with the Barbados Government towards development of the international business sector in the interest of both Barbados and its members. Detailed information on changes to the International Business sector may be read by clicking the below document labelled IB Sector.
IB sector