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Jurisdictions Barbados
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Jurisdictions - Barbados BASIC JURISDICTION INFORMATION Official Name: Barbados HISTORY The island was settled by the British in 1627, and was a colony for 350 years. Barbados gained independence in 1966 following the gradual introduction of social and political reforms in the 1940s and 1950s. Since the establishment of sugar plantations in the 1600s, Barbados was heavily dependent on sugar and molasses production as well as rum. Over the past 10 years, tourism, manufacturing, informatics and financial services surpassed the sugar industry in economic importance. GEOGRAPHY Barbados is situated 13 degrees 10 kilometers North East of Venezuela and 2,575 kilometers South East of Miami. It is the most easterly of the Caribbean Islands. The land area of Barbados is 430 square kilometers and most of the land is arable. The population is approximately 277,000 (Dec 2005 estimate). The Parliament was first established in 1639 which gave Barbados representative government. The Barbados Parliament is based on the Westminster model. It comprises a House of Assembly with 30 elected members and a Senate with 21 nominated members. It is the third oldest representative government in the British Commonwealth. The Democratic Labour Party and the Barbados Labour Party are the two major political parties. The Governor-General is the Queen's representative and Head of State. In the Government, the Prime Minister presides over the Cabinet. MONETARY SYSTEM The main currency in circulation in Barbados is the Barbadian Dollar (BDS$). Barbados has been a member of the International Monetary Fund since 1973. The parity of the Barbados dollar has been fixed since 1975 at BDS$1.0:US$ 0.5. COMMON LAW SYSTEM BASED ON ENGLISH LAW Barbados boasts English as its official language. The Barbados legal system is based on English Common Law as modified by Barbados Statutes to meet local requirements. The judiciary is completely independent of the Executive Council and Legislature. BUSINESS ENVIRONMENT Barbados opened its doors to International Business Companies (IBCs) as early as 1965 when it first enacted legislation providing tax incentives to offshore companies. It has since consistently re-invented its legislative framework to stay abreast of the competition and to prevent money-laundering or criminal activities. Barbados has a fully computerized stock exchange, which by the end of 2005 had capitalization of US$22bn. The island also benefits from a long tradition of political and social stability and a highly-skilled, productive workforce. STATUS WITH INTERNATIONAL AUTHORITIES In July 2000, Barbados pledged to make changes to its financial supervisory regime in order to have its name removed from the Organisation for Economic Co-operation and Development (OECD) blacklist, and in February 2002, Barbados was removed from the revised list. Barbados is not on the Financial Action Task Force’s (FATF) blacklist, which names the non-cooperative countries and territories (NCCTs) that have yet to comply with FATF recommendations in the prevention of money laundering and terrorist financing. Barbados is a member of the Carribean Financial Action Task Force (CFATF). TAX SYSTEM Barbados is a low-tax, treaty-based jurisdiction. As of 2006, it has tax treaties with: Botswana, CARICOM, Canada, China, Cuba, Finland, Malta, Mauritius, Norway, Sweden, Switzerland, Venezuela, the United Kingdom and the USA. IBCs are exempt from stamp duty on transfers to other IBCs or non-resident persons, property transfer tax and VAT, (introduced in 1997 at 15% on a range of goods and services to replace many previous sales taxes). However, IBCs are denied benefits of double tax treaties with certain countries, including Canada, UK and Sweden. A. Personal Tax D. Capital Gains Tax E. Estate Tax F. Transfer Tax at Death and on Gifts COMPANY REGISTRATION There are two forms of companies available including: “International Business Companies” (IBCs), and “Limited Liability Companies” (LLCs). Incorporation of a company in Barbados takes approximately 10 working days. Shelf companies are not available. TYPES OF COMPANIES Companies in Barbados are regulated by the Companies Act, 1982, which was modelled on the Canadian Business Corporation Act. Types of companies available under the Act are limited liability companies, companies without share capital (for non-profit purposes) and mutual insurance companies. Barbados’s most widely used form of offshore vehicle, the IBCs are incorporated under the updated companies legislation, the International Business Companies Act, 1991. IBCs are also regulated by the Companies Act, 1982. The International Business Companies Act, limits the issue of an IBC license to companies that are resident in Barbados (resident means incorporated in or managed and controlled from Barbados; registered foreign - ‘external’ - companies are deemed to be resident).
TRUSTS International Trusts An International Trust is deemed to be a non-resident of Barbados for tax purposes. As such, International Trusts are not subject to tax in Barbados, except for Barbados source income, and on any overseas income that is remitted to Barbados. Offshore Trusts
To qualify as an Offshore Trust the following conditions must be fulfilled: An offshore bank must act as a trustee; the settlor and beneficiaries must be non-residents of Barbados; the assets must consist solely of foreign securities and currencies. Domestic Trusts
A Domestic Trust is subject to tax in Barbados on trust income that is not distributed in the calendar year in which it is earned. Barbados tax only applies where the beneficiary is a Barbadian, or if the source of the income is Barbados. A trust administered in Barbados may also benefit from Barbados's treaty network. Most notably, use may be made of the Barbados/Canada treaty where Canadian assets are included in the trust property. The trust may serve to mitigate certain Canadian capital gains taxes. BANKING FACILITIES The Central Bank was established in 1972. Its main role is to act as banker, fiscal agent and financial advisor to the Government and to monitor and regulate the activities of the commercial banks and other financial institutions. Large international banks have correspondent relationships in Barbados and there are other commercial banks in Barbados such as Barclays Bank PLC and the Royal Bank of Canada. WHY ICS TRUST?Based in Hong Kong, ICS Trust (Asia) Limited incorporates companies in Hong Kong and most offshore jurisdictions including Barbados (Caribbean), where one of our affiliates is a registered agent. ICS TRUST is an independently owned, Hong Kong-registered trust company, also licensed as an Investment Advisor by The Hong Kong Securities and Futures Commission. With more than twenty five years experience, we are a market leader in helping entrepreneurs and multinationals establish and grow their businesses in Asia as well as providing comprehensive TAX, TRUSTS and TRADE services.
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