Measuring just 21 miles by 14 miles, and with a small population of just over 275,000, Barbados is by any standards a mere speck on the globe. However, this island in the sun has developed into an attractive destination of choice for international businesses and foreign investors.
At first glance, Barbados is known for its lovely sandy beaches, pleasant tropical climate and wide array of events including Crop Over and culinary festivals.
Once you crack the surface and venture into the inner workings of this tropical gem, one would begin to see that Barbados has more to offer a potential investor than meets the eye.
Barbados has been a haven of economic, social and political stability since achieving independence in 1966. In addition, there is a stable currency with an unchanged peg to the US dollar for over 30 years; a developed and thriving tourism industry; and a well-educated and trainable workforce.
It is not by accident that Barbados is ranked among top 10 captive insurance domiciles in the world, and is the second largest recipient of Canadian direct investment after the United States, with four of the largest Canadian banks located here.
For decades, Barbados has been strategically pursuing its quest to become the international financial and wealth management centre of choice in the Western Hemisphere, negotiating three dozen double taxation agreements and passing several pieces of legislation designed to create an attractive business environment for international technology companies, manufacturers, banks, insurance firms and trust companies seeking alternative jurisdictions from which to operate. This commitment by successive government administrations has served this island well as it is now home to over 3,600 active international businesses.
Barbados is constantly repositioning its business environment to be able to meet the needs of a growing and dynamic international business sector, in a timely, creative and innovative manner. Barbados offers a well-regulated, transparent and supportive environment for business and its competitiveness is further enhanced by transparent policies and effective laws. To this end, among the recent initiatives enacted were the amendments to the Income Tax Act to allow for “Product Warranty Services” to be included in the range of services eligible for foreign currency earnings tax credit, as well as the implementation of the indefinite licenses for International Business Companies and Societies with Restricted Liability. The latter initiative allows entities to have their licenses automatically renewed upon payment of the applicable fees. In addition, the recently enacted Private Trust Companies, Foundations, and the amendment to the Companies Act to provide for the formation of Incorporated Cell Companies, further enhance the island’s competitiveness and its attractiveness to investors.
Barbados’ incentives legislation combined with its ever-expanding network of double taxation and investment protection treaties create an attractive net tax rate and secure investment structures. International business entities can enjoy low rates of corporate tax, exemption from withholding tax on dividends or other income paid to non-residents, exemption from taxes on the transfer of certain assets or securities to non-residents and freedom from exchange controls. Capital gains are not taxed in Barbados and the recently instituted participation exemption regime, exempts from tax the dividends that a Barbadian resident company receives from an overseas company in which it has a substantial shareholding. International business entities which establish themselves as regular Barbados companies have available to them, for tax purposes, export allowances with the potential to reduce their effective tax rate to as low as 1.75%.
Barbados has earned a good reputation for its levels of security and integrity and enjoys positive international recognition for its regulatory systems, anti-money laundering, tax information exchange and other internationally recognized characteristic of a good and reputable business environment.
The country has long been perceived as having a robust education system. Indeed as far back as pre independence, Barbados had been known for its vibrancy with regard to educating the populace. Through its commitment to state-sponsored education right up to tertiary-level, Barbados has developed a deep talent pool from which businesses can draw upon not only for their in-house employment, but also requisite legal, financial, administrative and other professional services.
International businesses can establish in Barbados with the confidence that their management teams will enjoy a desirable quality of life. The island’s high quality of health care, education services and its standard of living are borne out in the country’s ranking of 7th in the Americas and 57th in the world in the UN Human Development Index 2015. The low crime rate also provides a secure environment for residents and visitors to enjoy.
Also, the recent introduction of the Special Entry Permits makes Barbados even more attractive to high net worth individuals who plan to visit the island often and stay for extended periods of time. These permits allow the individuals indefinite long-term visits without the ongoing need to visit the Immigration Department to renew their visitor status on the island.
The country has an excellent telecommunications infrastructure, along with modern and efficient air and sea ports with a strong network of international connections, good roads and public transportation – Barbados is connected in every way.
When we look beyond its well-known appealing physical characteristics, it is the high quality of life, great connectivity and proximity to the Americas, favourable solutions for global business strategies, excellent international business products, and an infrastructure designed to facilitate investment that make Barbados an attractive jurisdiction for potential foreign investors.