Size is Not Everything: Barbados as International Financial Services Jurisdiction
Travelling back to Barbados recently from a trip to our head office in Hong Kong in which I had also attended a number of meetings with established and prospective clients, I was ruminating on how Barbados as an international financial services jurisdiction stacked up against more developed, but small countries like Hong Kong. I have […]
By Connie Smith
April 22, 2014
Travelling back to Barbados recently from a trip to our head office in Hong Kong in which I had also attended a number of meetings with established and prospective clients, I was ruminating on how Barbados as an international financial services jurisdiction stacked up against more developed, but small countries like Hong Kong. I have to say, all things considered, I was able to tick a majority of the boxes for Barbados and thought that I could appreciate Kofi Annan’s earlier comment about Barbados when he said that Barbados punches above its weight. This comment is not without merit. As I now cast my eye down the table of some international rankings for Barbados, I feel very proud to be a Barbadian. A selection of these rankings includes:
Human Development Index which combines life expectancy, literacy, educational attainment and GDP per capita to measure a country’s development – 1st for Latin America and the Caribbean region and 3rd for the Americas, in the United Nations Human Development Report of 2013
Over the last four decades, Barbados has established itself as a leading international business and financial services centre, with a focus on negotiating double taxation and bilateral investment treaties, and maintaining its reputation of right-sized and appropriate regulation and standards. The island’s mature and increasingly sophisticated environment is home to an extensive range of products available from Barbados to the global market, including:
There are over 50 licensed financial institutions operating from Barbados all regulated by the Central Bank of Barbados. One has even been operating in Barbados for over 300 years. These licensed financial institutions in the main originate from Canada, United Kingdom, Latin America, Europe and the Caribbean providing products ranging from retail banking to international wealth management and everything in between.
Barbados has been attracting international insurance companies to its shores for decades. Barbados is ranked in the top seven captive domiciles in the world. The Insurance Division of the Financial Services Commission is responsible for the supervision and regulation of the domestic and international insurance sectors in Barbados. This comprises Exempt Insurance Companies, Qualifying Insurance Companies, Captive Insurance and Reinsurance Companies. Segregated Cell Companies are often used in this area of the business and Incorporated Cell Companies are also under active consideration.
Other International Entities
In addition to the internationally recognised International Business Company, Barbados offers other flexible options in the forms of International Societies with Restricted Liability, other hybrid companies, and a range of trusts, including International Trusts. The incentive legislations that support these different types of international entities are designed to attract and facilitate the wide range of business activities that allow Barbados to be recognized as a modern and responsible international business centre for foreign and domestic investment.
In the current environment of increased global scrutiny, requirements and shifting of goalposts by the likes of the OECD and FATF, it is critical that the business of the entities choosing to be established in international financial centres is indeed conducted from the jurisdiction. As a successful double taxation jurisdiction, this is precisely what Barbados has been doing for more than 40 years. In addition to the usual attorneys and accountants who may advise on the tax structure to be implemented, there are seasoned corporate and business services professionals like ourselves who have been working on the implementation and on-going maintenance to ensure that the central management and control of the international entities established in Barbados happens in Barbados. This could range from recommending knowledgeable directors who responsibly discharge their fiduciary duties and advise on active transactions being considered by the respective companies, operating bank accounts within Barbados, recruiting and supervising any staff employed by the company to ensuring that the appropriate documentation accurately reflects the business being transacted in Barbados.
Additionally, Barbados boasts a high quality of infrastructure that is essential to the efficient operation of businesses operating within its fair shores and certainly offers one of the most advanced business infrastructures in the Caribbean region, including world-class telecommunications, excellent international connectivity, good time-zone compatibility, highly skilled and educated workforce and adequate, reliable utilities. This is buttressed by a high respect for law and order, very low crime rate, a long tradition of democracy, a very high quality of balanced lifestyle, and jaw-dropping luxuriously spectacular views. Barbados has long recognised that as a small developing island state, its best strategy for development and growth centred around the provision of high value, weightless yet exportable professional services and specifically, those that support international financial services. With a very high percentage of graduates from the University of the West Indies and other international universities, Barbados is able to offer the necessary pool of experienced professionals including accountants, attorneys, corporate and business services professionals, architects, bankers, engineers, medical doctors, investment managers and insurance experts. Aside from the usual financing and holding structures, the cadre of qualified professionals is perfectly suited to attend to, for example, medical and other research, product development; really anything that uses the vast information and intellectual capital available from Barbados.
So, although small in size, from the foregoing, one can get a sense that for business in Barbados, size is not everything!
Governance, Compliance and Risk professional with broad experience in the establishment and maintenance of corporate vehicles, particularly in Barbados and the British Virgin Islands. Managing Director, Tricor Caribbean.