Barbados prides itself on being a well-regulated International Business and Financial Centre. Financial regulations are governed by the Financial Institutions Act (the “FIA”) and the International Financial Services Act (the “IFSA”). Domestic banks, trust companies, finance companies, merchant banks and brokerage houses are governed by the FIA and international banks are governed by the IFSA. Entities governed by both the FIA and the IFSA are licensed, regulated and supervised by the Central Bank of Barbados (the “Central Bank”). The Central Bank is responsible for the promotion of sound financial structures in Barbados. To this end the Central Bank regularly publishes regulatory guidelines aimed and keeping Barbados a well-regulated and competitive jurisdiction.

All international entities carrying out banking business and international financial services fall under the supervision of the Central Bank.

In order to obtain a licence under the IFSA or the FIA an applicant must prove to be either:

  • a well-established regional or international bank or financial institution or their subsidiaries or affiliates and the international bank or financial institution has a proven track record and is subject to effective consolidated supervision;
  • a well-established domestic financial institutions or their subsidiaries or affiliates where the institution has a proven track record; certain joint ventures between well- established non- financial entities and regulated financial companies;
  • certain wholly owned subsidiaries of well-established domestic, regional or international non-bank corporations or their subsidiaries or affiliates;
  • or a single applicant or group of high net worth individuals (not exceeding five persons) whose net worth or combined net worth is at least BB$100 million (US$50 million) and is desirous of managing their own funds.

The FIA defines banking business as the business of:

  1. receiving money from the public on current account, deposit account or other similar account and paying and collecting cheques drawn by or over a period by customers, and making advances to customers; or
  2. receiving money on a savings account from the public repayable on demand or after not more than 3 months’ notice and generally the undertaking of any business appertaining to the business of banking provided that such business has not been specifically prohibited by the Central Bank.

According to the IFSA “international financial service” is:

  1. the business of receiving foreign funds through
  2. the acceptance of foreign money deposits payable upon demand or after a fixed period or after notice;
  3. the sale or placement of foreign bonds, foreign certificates, foreign notes or other foreign debt obligations or other foreign securities; or
  4. any other similar activity involving foreign money or foreign securities; or
  5. the business of using the foreign funds so acquired, either in whole or in part, for
  6. loans, advances and investments;
  7. the activities of the licensee for the account of or at the risk of the licensee;
  8. the purchase or placement of foreign bonds, foreign certificates, notes or other foreign debt obligations or other foreign securities; or
  9. any other similar activity involving foreign money or foreign securities; or
  10. the business of accepting in trust from person’s resident outside Barbados or from prescribed persons
  11. amounts of money in foreign currencies or in foreign securities or both;
  12. foreign personal property or foreign movable property; or
  13. foreign real property or foreign immovable property; or
  14. any other financial service, related or ancillary to an activity described in the IFSA, which the Central Bank may by regulations declare to be an international financial service for the purposes of the IFSA.
  15. The Central Bank is empowered with discretionary intervention powers to address identified areas of weaknesses in the financial condition or operational practices or non-compliance with applicable laws, regulations or supervisory instructions of all entities licensed under the IFSA and the FIA. The Central Bank’s intervention ranges between sending a formal letter outlining its concerns to the Board of Directors and Management in cases for example where there might be deficiencies as evident by weaknesses in corporate governance or risk management, to the most extreme case involving seizure of management and control of the entity in accordance with Section 59 Part V of FIA or Section 67 Part III of IFSA.

Barbados is fully committed to remaining a well-regulated jurisdiction and providers of international financial services and banking business strive to always complying with the legislations and the guidelines as set out by the Central Bank.

About the Author

Arlene Ross -

Arlene N. L Ross is Vice President, Trust and Corporate Service with DGM Financial Group.She is an Attorney-at-Law called to the Bar in Trinidad and Tobago, Anguilla and Nevis. Arlene holds a Bachelor’s Degree in English and a Bachelor of Law Degree from the University of the West Indies. She obtained her Legal Education Certificate from the Hugh Wooding Law School and holds the STEP designation of TEP.Before joining the DGM Financial Group Arlene was the Primary Relationship Manager, Trust Services with RBC (Barbados) Wealth Management.