On February 12, 2010 Barbados initialled a double taxation treaty with Belgium. This latest development follows closely on the heels of the signing of a tax treaty with Luxembourg and the initialling of tax treaties with Spain and Italy in 2009. In addition, there are ongoing discussions with Iceland and the Czech Republic as well as existing treaties with eight other countries in the Economic Community. It should be noted that one significant benefit of Barbados entering into tax treaties with the above countries is that, once the treaties enter into force, Barbados should be removed from the “blacklists” contained in the domestic laws of a number of those jurisdictions.
The above developments, together with the signing of the Economic Partnership Agreement with the European Union, will provide opportunities in the future by opening up the European market to investments from and through Barbados.
However, of immediate import, are the significant opportunities that exist in Europe, particularly in the UK, for attracting high net wealth individuals (“HNWI”) to relocate to Barbados. The changes to the UK’s tax rules as they relate to the taxation of non domiciled individuals who are resident in the UK for tax purposes, as well as the proposed increases in the tax burden of HNWIs in the UK, has driven such individuals to seek to relocate to jurisdictions that have more favourable tax regimes. It has been estimated that there are over one hundred thousand such individuals who are looking to relocate to other jurisdictions.
Although competition from other jurisdictions, such as Dubai, Hong Kong, the Isle of Man, Singapore and Switzerland for this type of business is fierce, there is nevertheless an opportunity for Barbados to attract its share of HNWIs to its shores. To this end, the pending enhancement of the income tax benefits available to such individuals in respect of remittances of their overseas income to Barbados, together with Barbados’ rapidly expanding tax treaty network, good business infrastructure and its reputation for safety, security and excellent quality of life, provide the Island with a distinct advantage over many of its competitors.