Despite the several challenges facing Barbados on its path to full economic recovery, the international business sector continues to be one of this island’s success stories when we carefully consider how our 166 square mile speck in the ocean has risen to international prominence.
Fifty years ago, the 1965 Barbados International Business Companies (Exemption from Income Taxation) Act came into force. Since then, the international business sector has brought a wealth of benefits to Barbados in the areas of knowledge transfer, technological and infrastructural improvements along with economic and social development. Although being a small, open-economy with limited natural resources, Barbados has managed to achieve a standard of development, per capita gross income, and a global reputation that far belies its small size. Through the sheer strength of its human capital, this island has become ranked among the international business and financial services centres of choice in the world, including Top 7 globally for captive insurance domiciles and Top 3 recipient of Canadian direct investment.
The most recent company figures supplied by the Ministry of International Business show that Barbados has continued to attract new international business company (IBC) registrations in excess of 400 annually since 2007, achieving an average rate of 458 new registrations annually over that period. In relation to international insurance we continue to maintain our number at just over 240 active entities. Whilst our international banks have dwindled from 40 at the end of 2013 to 32 at the end of 2014, we should note that much of the business that was being carried on by companies holding banking licences is now being conducted through IBCs, Societies with Restricted Liabilities, or just regular Barbados companies.
This steady buzz of international activity is the result of the architects of our international business sector ensuring that Barbados had the required infrastructure and then harnessed its human resource capacity. This started with a groundbreaking legislative framework to allow this jurisdiction to function as a one-stop solution for overseas investors or multinational companies looking for headquarters outside of their home base.
The growth of international business services in tandem with tourism services has provided an elevated standard of living that benefits native and relocated Barbadians alike. The cross-fertilisation of ideas between the Barbadian workforce and their international co-workers has created two-way transfers of knowledge that have enriched the corporate environments for all involved.
Barbados is now an appealing bustling metropolis within the Caribbean, ensuring that the international investor, business manager or entrepreneur can enjoy a superior quality of life while conducting business seamlessly across time zones. What could be more appealing than knowing that your place of business allows you the luxury of being no more than 10 or 15 minutes’ drive from the nearest beach where you can enjoy a moonlit picnic with the family or friends rather than having to drive five hours to hop on a plane to do so? Such opportunities cannot be taken for granted given the fragility of life.
And Barbados has set its sights on going that step further and becoming the gem of the Caribbean financial services centres. This requires that our legislative agenda keep pace with international financial requirements and innovations. To assist in this, the Barbados Government has set up a working group to identify, inter alia, how our securities legislation and regulations can be transformed to be more enabling. The 2014 – 2019 Strategic Plan for the International Business Sector developed by the Ministry of International Business, in collaboration with the Barbados International Business Association and other strategic partners, has also set a number of important goals that require a concerted effort by all involved to bat for the same team to snatch the flag. These are:
- Goal 1
- To maximise the potential of international business sector as a key driver of sustainable economic growth and development in Barbados.
- Goal 2
- To expand and diversify our markets to attract clients consistent with our economic goals.
- Goal 3
- To continuously develop and deliver solutions that satisfy the needs of the market place.
- Goal 4
- To enhance Barbados’ image as a reputable centre for International Business.
- Goal 5
- To broaden the cadre of persons with the requisite knowledge, skills, and service-driven attitudes.
- Goal 6
- To enhance the infrastructure for attracting and facilitating the development of Business.
International business contributes close to BB $1 billion to the island’s economy each year through taxes, license fees, salaries, and payments for ancillary services. Out of season, the sector keeps the hotels and restaurants on the island well patronized as clients and company directors fly to the island year-round for meetings. The spillover effect for our social services, buoyed by inflows of foreign currency from international businesses and investments into the national coffers remains an under-recognised but important factor in the island’s continued social stability. Working together, it is now within our grasp to harness the further growth potential of this sector to allow our island to once again shine like a beacon for those who seek safe harbor in the economic fog.