Introduction
Barbados is the eastern-most Caribbean island. The island, which is less than one million years old, was created by the collision of the Atlantic crustal and Caribbean plates, along with a volcanic eruption. Later coral formed, accumulating to approximately 300 feet. It is geologically unique, being actually two land masses that merged together over the years.
Initially occupied by the British in 1627, Barbados remained a British colony until internal autonomy was granted in 1961. The Island gained full independence in 1966, and maintains ties to the Britain monarch represented in Barbados by the Governor General. It is a member of the Commonwealth.
The total area of 431sq km is home to 279 000 (2007 est.) of Afro-Bajan (Igbo, Yoruba, Akan, others), European (English, Rastafarian other), Asian and Multiracial ethnicities. English is the official language and Hindi/Bhojpuri{Spanish) is second most spoken language from the Indo-Bajan population.
Business Environment
Barbados’ business environment is a diverse but stable one. Barbados is one of the most stable locations in the world for business. The island benefits from a long tradition of political and social stability, a highly-skilled and productive workforce, sophisticated international telecommunication services, and a superior infrastructure.
Looking towards the future, the National Initiative for Service Excellence, NISE, was launched in 2004 jointly by the trade unions, the private sector and Government to position Barbados to consistently deliver excellence in service in all aspects of business and social interaction. In this way, an enabling environment will be created within which Barbados will be able to attain its vision of being a developed country by 2025.
Economic Environment
Historically, the Barbadian economy had been dependent on sugarcane cultivation and related activities, but production in recent years has diversified into manufacturing and tourism. The start of the Port Charles Marina project in Speightstown helped the tourism industry continue to expand in 1996-98. Offshore finance and informatics are important foreign exchange earners, and there is also a light manufacturing sector. The government continues its efforts to reduce the unacceptably high unemployment rate, encourage direct foreign investment, and privatize remaining state-owned enterprises.
Barbados has an economy driven by tourism, business, financial services, agriculture, and manufacturing. Low tax rates, double taxation agreements and exchange of information treaties have provided Barbados with an ideal environment for its development into a major international business and financial services centre. In addition, Government has a liberal policy towards foreign exchange controls and is committed to moving towards the elimination of these controls.
The economy is usually looked at in terms of sectors. These are the real, financial/monetary, public or fiscal, external, regional and international sectors. The Central bank monitors these sectors and publishes information on them quarterly and annually
Taxation
Companies and individuals who are resident and domiciled in Barbados for tax purposes are subject to income tax on their world-wide income whether or not income is remitted to Barbados. Individuals who are resident but not domiciled in Barbados are taxed on their income derived from Barbados and on any overseas income remitted to Barbados. Non-residents are taxed only on income derived from Barbados.
With certain exemptions (e.g. financial services and the sale of real property), Value Added Tax (VAT) is levied on all goods and services produced in Barbados and goods imported into Barbados.
Banking
The Barbados banking sector has historically been controlled by British and Canadian branches of internationally recognized banks. There is also significant representation from The Barbados National Bank and other Caricom member countries.
There are over 40 licensed offshore banks. International banks and finance houses have been attracted to Barbados as a result of its tax incentives, quality of services and reputation as a reputable Offshore Banking Center.
The banking services offered on Barbados are comparable to any bank in North America or Europe.
Offshore Banking
All offshore banking activities in Barbados are controlled by the Offshore Banking Act which provides incentives to carry on business in Barbados by way of tax reductions and other exemptions. Offshore banking can be defined as the acceptance of foreign funds through foreign money deposits, the sale or placement of foreign securities and any similar activity involving foreign money, or through securities. Further to receiving such funds, they are to be used to make loans, advances and investments.
In order to engage in offshore banking in Barbados, the interested party must apply for a license from the Minister of Finance. Such a license will only be issued to an eligible company or to a qualified foreign bank.
