Barbados Financial Services — Personal Contact, Global Reach

Over the years, Barbados has developed a depth and breadth in financial services – from banking to investment management to pensions – that far exceeds the country’s size.

By Peter Arender, CFA

March 2, 2017

Port Ferdinand Unit 7 Port Ferdinand Unit 7

As anyone who has opened a bank account in the past few years knows, global regulations have made it harder to deal internationally and increased the administrative burden on clients and financial institutions alike. Banking and investing across borders now takes more time, and more work. Establishing yourself in Barbados, whether personally or for business purposes, will therefore involve getting to know what the institutions on the ground here can offer and how they can meet your needs. It is likely that some existing relationships overseas can be maintained, while also using Barbados providers as necessary or desired.

From its 439 km2 in the Atlantic Ocean, Barbados reaches all around the world with its international tax treaties and business activities. Naturally, financial services are an important part of this network. Over the years, Barbados has developed a depth and breadth in financial services – from banking to investment management to pensions – that far exceeds the country’s size. Barbados financial institutions offer personal contact and global reach by tapping into the same global platforms as institutions anywhere else in the world.

Banking is a good place to start. Global banks, especially those from Canada are no strangers to Barbados. Royal Bank of Canada opened its first branch here in the early 1900’s, reflecting the long history of commerce between Barbados and Canada. Other major banks in Barbados are CIBC FirstCaribbean, Scotiabank, Republic Bank and First Citizens. From accounts at these institutions, you can hold balances in local or global currencies, and make payments around the world. Banks are regulated and supervised by the Central Bank of Barbados (“CBB”). Of course nothing is perfect and it should be noted that client facing technology, while functional, can sometimes be less than cutting edge. You should enquire about the aspects of service and communication that are most important to you.

A quick note on currency: Barbados has currency controls which govern the flow of money in and out of the domestic economy. CBB approval is typically required for large transactions. International activities in U.S. dollars and other global currencies, though, do not fall under this regime and can move freely through the international departments of the banks here. Many international businesses and residents have very little interaction with the domestic banking system.

Once banking is looked after, you may look next for investment and related services, and here as well Barbados can provide an easy fit to various needs. Firms on the ground range from boutique fund managers to the wealth management arms of the Canadian banks, and everything in between. Whether you are investing for a captive insurance company, trading company, family office – or yourself personally – you can find an investment manager right here, or tap into a Barbados advisor’s network of external managers, or direct market access. For discretionary mandates, the professionals looking after the portfolios may be in other financial centres, but they are often right here in Barbados where you can have easy, direct contact with the people making the investment decisions. If you or your family have more comprehensive requirements, you can look to engage the services of a multi-family office, such as DGM Financial. Investment managers and fund administrators in Barbados are regulated and supervised by the Financial Services Commission.

If you are establishing a business in Barbados, a pension plan can be an important part of employees’ compensation. Barbados has longstanding pension legislation that helps both onshore and offshore companies and their employees invest for retirement. Some defined benefit plans are still operating, but most new plans are establishing defined contribution schemes where each employee selects appropriate investment vehicles and assumes the risk of how they perform in the future. At retirement, insurance companies such as Sagicor and ICB can offer conventional annuities, and innovators such as Fortress Fund Managers offer drawdown annuities similar to those available in the UK and Canada that allow participants to gradually withdraw from their investment accounts during retirement while maintaining ownership of them.

What about non-standard work, special projects, or if you need to hire in-house investment or financial expertise? Barbados is home to a well-trained and experienced group of advisors and investment professionals that can help. One resource for investment professionals in Barbados is the CFA Society Barbados. It has approximately 50 members, and supports the continuing education of CFA charterholders as well as those pursuing the CFA designation.

There is a lot to consider when looking at a new place to live or establish a business, and financial services are a key consideration. Thankfully, in Barbados there is an established financial services ecosystem. You will find a range of companies and professionals ready to work with you, with personal service and familiar products that will free you up to get on with business.

Peter Arender, CFA

Fortress Fund Managers is based in Barbados. Its range of funds covers the asset classes of equities and fixed income, providing creditable performances over the years. Fortress is also a leading provider of pension management and administration services to companies of all sizes, and to individuals.