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Barbados

Barbados is a small island in archipelago of the Lesser Antilles (Caribbean Sea), near Venezuela.

Official language

English

Capital

Bridgetown

Form of government

Parliamentary constitutional monarchy of Westminster type.

Legal system

Based on English common law

Currency

Barbados Dollar (BBD)

Economy

The main income of the country is provided by tourism, sugar industry, information technology, financial services, offshores. The country exports light industrial products, sugar and molasses, rum, chemicals, components for electrical appliances.

Corporate law

• The Companies Act 1982
• International Business Companies Act 1991
• Societies with Restricted Liability Act 1995
• Limited Partnerships Act, Cap. 312
• International Trusts Act 1995

Forms of companies

• International Business Company
• Limited liability company
• Company without share capital
• Mutual insurance company
• External Company
• Foreign Sales Corporation
• General Partnership
• Limited Partnership
• Societies with Restricted Liability
• Trust
• International Trust

International Business Company, IBC

Limited Liability Companies which acquire a special status of International Business Company (IBC) are used for offshore purposes in accordance with the Law on International Business Companies.

• International business companies (IBC) have can be engaged in any activity not prohibited by law. To obtain the status of an IBC company a relevant license must be obtained and annually renewed.
• These companies are not allowed to conduct business with residents of Barbados and own real estate in Barbados.
• The authorized capital of IBC is declared, there is no requirement for its mandatory payment, and there are no fixed minimum and maximum amounts. The minimum issued capital may constitute one share of par value. Issued shares must be paid in full.
• The shareholders of a company can be both legal and natural persons who are residents of any country in the world. The minimum quantity of shareholders is one. Information on beneficial owners and shareholders is confidential.
• Directors of companies can be both legal (a company incorporated in Barbados), and individual residents of any country in the world. Minimum one director is required. Companies in Barbados must have a secretary who may be an individual or entity.
• Details of constituent documents, copies of which are stored in the Registrar of Companies can be provided to third parties only after a court decision made on the basis of evidence about the involvement of the company into illegal business.
• International business companies are not required to keep accounts and financial statements, but, nevertheless, they must submit annual audited financial report. Financial statements of companies are verified by auditors if the size of total assets or revenues exceeds 500,000 U.S. dollars.

Limited Liability Company

LLC may have one shareholder and one director (incl. legal entity), a public company must have at least three directors. There are no minimum capital requirements. Bearer shares are not permitted; shares with no par value are allowed.

International Trust

Regulated by International Trusts Act 1995. No restrictions on duration. Trusts enjoy tax incentives and are exempt from exchange control requirements. Mandatory requirement is the following: Founder of a Trust at its creation must be a non-resident. Trust property is not included in the real estate register in Barbados.

Taxation

Tax on income for IBC companies is 1% - 2.5% depending on the size of the company's revenue. The standard rate of VAT on most goods and services is 17.5% (effective from December 2010). Reduced VAT rate is 8.75% (effective from May 2011) and applies to hotel accommodation. Certain types of services are not subject to VAT. Exports of goods is subject to VAT at 0%.

International business companies are exempt from withholding tax on dividends, interest, royalties. If a company resident of Barbados receives dividend income from subsidiary non-resident, such income shall be exempt from taxation, provided that the Barbados company owns more than 10% of subsidiary's equity if it is not a portfolio investment.

Agreements on avoidance of double taxation

Concluded with the United States, Britain, Seychelles, the Netherlands and some other countries (at the beginning of 2011 - 27 countries).

Exchange control

Exchange control is carried out in accordance with Exchange Control Act 1967. There are no restrictions on direct investment in Barbados but a non-resident investor shall register the foreign currency in Exchange Control Authority, if he intends to repatriate the currency in future.