Barbados enjoys many shared inheritances and values with other Commonwealth countries. The Parliament of Barbados is said to be the third oldest legislature (after Westminster and the Bermuda House of Assembly), and, with a history in excess of 375 years, it is among the oldest in the Commonwealth. Yet, with all of its old world history, it is a modern day international financial centre.
International trade within the Commonwealth is on a growth path. There can be no doubt that some of the world’s largest and most dynamic economies are those of the Commonwealth. Economies such as India, Africa and Asia have been recognised as global engines of growth.
In addressing the Commonwealth Business Forum during the recently concluded Commonwealth Heads of Government Meeting held April 2018 in London, British Prime Minister, the Rt. Honourable Theresa May, noted that international trade within the Commonwealth is flourishing. She stated: “The 2018 Commonwealth Trade Review predicted that trade between member states will be worth $700 billion by 2020.” The Commonwealth Trade Review is a research publication issued the Commonwealth Secretariat. The previous review was published in 2015.
The Commonwealth is a diverse community of 53 independent and sovereign nations. Although not a formal trading block, it accounts for 20% of global trade, assisted, in a large part, by Regional Trade Agreements (RTA’s). Within this context Barbados, a Commonwealth nation and an international financial services centre, offers a number of opportunities for investors across areas such as international banking and insurance. Barbados also offers a suite of international business legislation for wealth and trusts management, including the Private Trust Company Act and the Foundations Act.
Barbados offers a number of cost advantages in other areas such as the Barbados Ships’ Registry. White-listed in Paris MOU, accredited to ISO9001, and headquartered in London, Barbados Ships’ Registry offers all aspects of ship registration. A member of the International Maritime Organisation (IMO) since 1971, Barbados has ratified and adheres to all major international maritime conventions to date.
The 2018 Commonwealth Trade Review also looked at Commonwealth Foreign Direct Investment (FDI) flows in a global context. Overall, in examining global inflows of FDI, Commonwealth countries held about one-fifth of global FDI stock, the top five recipients being the UK, Singapore, Canada, Australia and India. Barbados’ major markets for FDI include the Commonwealth countries of Canada and UK. The Review noted five major findings:
- Intra Commonwealth exports of goods and services stood at US$560 billion in 2016, with a rising share of intra-Commonwealth trade in members’ total world trade of approximately 20 percent.
- Although the global trade slow down adversely affected intra-Commonwealth trade, the Commonwealth is on track to achieve USD$700 billion in trade by 2020, although proactive policy measures could trigger even greater gains.
- Global foreign direct investment (FDI) flows to the Commonwealth in general are on an increasing trend, with FDI stock now exceeding US$5 trillion.
- Intra -Commonwealth productive investment (‘greenfield investment’) is projected to reach almost US$1 trillion by 2020, under certain conditions
- In 2017, cumulative intra-Commonwealth ‘greenfield’ FDI was estimated at US$700 billion, creating 1.4 million jobs through 10,000 projects.
There are opportunities for investors amidst such potential for growth. Barbados is globally recognised as a compliant and well-regulated jurisdiction. The jurisdiction joined the Global Forum on Transparency and Exchange of Information for Tax Purposes in September 2009, and received a compliance rating in 2016. It is a signatory to the OECD’s Multilateral Convention on Mutual Administrative Assistance on Tax Matters, and is a signatory to the Multilateral Competent Authority Agreement that enables full commitment and compliance to the automatic exchange of financial account information.
Barbados has also co-signed the Foreign Account Tax Compliance Act with the USA, and joined the Base Erosion and Profit Shifting (BEPS) inclusive framework. Under this framework, over 100 jurisdictions collaborate to implement measures to address BEPS.
Barbados’ bilateral treaty network comprises thirty-seven Double Tax Agreements, (DTA’s) including the Commonwealth countries of UK, Canada and Singapore, nine Bilateral Investment Treaties including UK, and Canada and five Tax Information Exchange Agreements. Across the Commonwealth Caribbean, within CARICOM, there are 10 DTA’s. With the exception of Belize, the DTA’s are with Commonwealth Caribbean countries, such as Antigua, Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and the Trinidad and Tobago.
At the conclusion of the Meeting, the 53 Commonwealth Heads of Government, of which Barbados is a member nation, stressed the importance of international trade and investment in boosting employment and income. They collectively recognised international trade and investment “as an engine for generating inclusive and participative economic growth”. This commitment was contained in the Declaration which launched the Commonwealth Connectivity Agenda for Trade and Investment. Secretary-General of the Commonwealth, The Right Honourable Patricia Scotland QC, has on a number of occasions urged companies to seize fresh opportunities to do business within the Commonwealth.
It is time to seize the fresh opportunities.