Barbados, island country in the southeastern Caribbean Sea, situated about 100 miles (160 km) east of Saint Vincent and the Grenadines. Roughly triangular in shape, the island measures some 20 miles (32 km) from northwest to southeast and about 15 miles (25 km) from east to west at its widest point. The capital and largest town is Bridgetown, which is also the main seaport.
The geographic position of Barbados has profoundly influenced the island’s history and culture and aspects of its economic life. Barbados is not part of the nearby archipelago of the Lesser Antilles, although it is usually grouped with it. The island is of different geologic formation; it is less mountainous and has less variety in plant and animal life. As the first Caribbean landfall from Europe and Africa, Barbados has functioned since the late 17th century as a major link between western Europe (mainly Great Britain), eastern Caribbean territories, and parts of the South American mainland. The island was a British possession without interruption from the 17th century to 1966 when it attained independence. Because of its long association with Britain, the culture of Barbados is probably more British than is that of any other Caribbean island, though elements of the African culture of the majority population have been prominent. Since independence, cultural nationalism has been fostered as part of the process of nation-building.
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Barbados has been a popular jurisdiction for incorporating international businesses – especially for Canadians which enjoyed certain benefits under DTAs. However, the jurisdiction has also gone through several legislative amendments to avoid being classified as having a ‘harmful preferential tax regime’ by the OECD / EU.
Under these amendments, the International Business Companies (IBC) Act has been abolished, and the Societies with Restricted Liabilities Act has removed preferences to International Societies with Restricted Liability (ISRL).
IBCs and ISRLs licensed after October 17, 2017, have been converted to regular Barbados companies and societies, and are subject to local corporate taxation. Those incorporated and licensed before October 17, 2017, will be grandfathered until June 30, 2021 – at that point, they will need to be converted to regular Barbados companies.
Note that Barbados companies earning 100% of their income in foreign currency would be able to apply for a Foreign Currency Permit under the Foreign Currency Permits Act, 2018, to avoid capital controls under the Exchange Controls Act.
The Income Tax Act has been also amended. Since January 1, 2019, all Barbados entities, except those that are grandfathered are taxed on a sliding scale from 5.50% (for taxable income below BBD 1 million) to 1% (for taxable income over BBD 30 million). Previously, IBCs and ISRLs were subject to tax on a sliding scale between 2.5% and 0.25% and local companies were subject to tax at a 25% rate.
Company limited by shares
|Governing corporate legislation||Companies Act|
Barbados Companies may be formed by one or more shareholders, who can be either natural or legal persons, residents or non-residents.
At least one director is required, who may be a natural person or a legal entity, as long as the legal entity is registered in Barbados. Directors’ details are available to the public.
|Information published relating to company officers|
Details of shareholders are not publicly disclosed. Nominee shareholders are allowed.
Directors’ details are available to the public. Nominee directors are permitted.
The liability of the shareholders is limited up to the amount of the shares they hold.
|Accounting requirement/ compliance|
Barbados companies must keep accounting records, which may be kept in or outside Barbados. Companies are required to submit financial statements and tax returns annually. Financial statements are not available to the public. an audit may be required if gross revenue or company assets exceeds approximately US$2,000,000. Audit reports should be signed by a professional member of the Institute of Chartered Accountants of Barbados.
|Corporate income tax|
Companies are taxed on their worldwide income.
All Barbados entities are taxed on a sliding scale from 5.50% (for taxable income below BBD 1 million) to 1% (for taxable income over BBD 30 million). Previously, IBCs and ISRLs were subject to tax on a sliding scale between 2.5% and 0.25% and local companies were subject to tax at a 25% rate.
|Shared capital/paid up|
There is no authorized share capital established, however, the usual authorized share capital is US$1,000, divided into 1,000 shares of US$ 1. The share capital may be expressed in any currency. There is no statutory requirement for capital to be fully or partly paid on incorporation.
|Basis of the Legal System|
Under Common Law.
The appointment of a locally licensed secretary is required.
Shares may be issued in any class, as long as they are denominated in non-par value. Bearer shares are not permitted.
A Barbados company must have a registered office in Barbados, provided by a licensed service provider.
Annual general meetings are mandatory, but can be held anywhere. The first annual general meeting must be held no later than 18 months from the incorporation of the Barbados IBC. Thereafter, annual general meetings should be held in intervals not more than 15 months.
|Time to form|
Barbados corporations can expect the entire process to take about 5 days. This completion time depends on the approval of the corporate name, as well as, how accurately the applicant completes its registration documents.
annually before or on December 31st
Convenient world time zone: GMT-4
Barbados ensures privacy for offshore corporations. The names of corporate stockholders and directors remain private, and nominee directors and shareholders may be selected for increased confidentiality.
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