Bitcoin, blockchain, fintech along with countless terms and acronyms have inundated Barbados in recent years. Barbados has seen activity in this space in both the domestic economy with digital and mobile payments, as well as the international business sector, with many foreigners choosing to use Barbados as a launchpad for their global business.
Barbadians first sat up and took notice back in early 2016, when Overstock invested US$4 million of a total investment of US$16 million in Bitt, a local blockchain company. Barbados could now boast of having a homegrown, tech start-up, that raised millions from a well-known publicly listed U.S. company.
That announcement was followed a year later by other well-known blockchain companies, such as Aion, Polymath and Shyft, choosing Barbados as their base. Since then, many others have arrived on our shores.
Traditional businesses in Barbados are getting in the game too. The Barbados Stock Exchange has submitted regulations to list and trade digital assets and security tokens. While Cave Shepherd has launched the Cave Shepherd Card Mobile App.
International Business 2.0
Barbados has been a leading international business centre since the early 1980s, offering competitive tax rates, an educated population, a large tax treaty network and a sound regulatory environment.
There has been a lot of interest internationally in using Barbados as a hub for the large number of fintech and blockchain start-ups that are emerging daily. Here at DGM Financial Group, we noticed a huge increase in the number of questions about what Barbados is doing in the space from international tax planners and attorneys in 2018.
Barbados is not alone. The Cayman Islands, Bermuda, Switzerland, Malta, Gibraltar and Mauritius are all clamouring to get involved in the space. These countries are all well known international business centres that rely on attracting foreign investment to create job opportunities and drive the economy.
In Barbados, there is a lot of interest and demand to list and trade digital assets and security tokens. Many of these projects are seeking an affordable and regulated way for to raise capital internationally. We saw this demand with the Initial Coin Offerings craze in 2017. As the sector moves towards regulation, Barbados has an opportunity through the Barbados Stock Exchange, to transform the island into a hub, where blockchain and capital meet.
Foreigners are seeing the opportunities too. Daxnet, a company owned by foreign investors, has recently applied for a security exchange licence in Barbados. Barbados has the potential to become a hub for this type of activity, with the possibility of additional security exchanges registering in Barbados, bringing their overseas capital market contacts and funds with them, driving companies to incorporate and list in Barbados, creating a critical mass that will elevate Barbados’ standing in the space and transform the economy.
In addition, the companies that are already in Barbados, have hired Barbadian software developers. Polymath has recently launched a weekly workshop at the University of the West Indies for their students. These companies need talent and people, they want to hire Barbadians and transfer skills to them. They have shown a real community spirit, being willing to put in the time, money and effort to build this industry from the ground up, right here, in Barbados. It is a great opportunity for our computer science graduates to get well paid jobs and opportunities at home, reducing emigration abroad.
In addition, the OECD’s efforts on Base Erosion and Profit Shifting mean that there needs to be economic substance in all low tax jurisdictions. This means that companies incorporating in Barbados will now be further incentivised to speed up their efforts to build out large teams on the island. In addition, compared to our Caribbean competitors in this space, we have a larger local population, and as such, a larger talent pool to draw on, giving us a strategic advantage.
Barbados’ strength and experience as a leading international business jurisdiction can be leveraged to attract international business to Barbados, to drive growth and job opportunities in the local economy. We are well positioned to convert these opportunities to reality.
The first iteration of international business in Barbados has created great job opportunities for accountants and attorneys over the last 35 years and served us extremely well.
The next wave of international business will create exciting opportunities for software developers and transform Barbados into an international fintech hub. This is our future.