Barbados is a high quality center for International Business and is known as an important financial services center throughout the world. The factors which contribute to Barbados’ continued growth in the offshore financial sector include one of the highest degrees of political and social stability in the world, low rates of taxation, excellent communications, skilled expertise and a sensible regulatory environment.
Barbados’ Investment Framework
What distinguishes Barbados from other offshore locations is its relatively large pool of highly educated, motivated and trainable personnel, its reputation for quality, its network of tax and investment treaties and its lower operating costs. Among the advantages in choosing Barbados are: – Advanced communications infrastructure – Political stability – Well developed corporate and support services infrastructure – Strong links with Britain and Canada – Offshore incentives – Manufacturing incentives – An incentive regime for Offshore Banks – Free trade agreements – Sophisticated banking system
BILATERAL INVESTMENT TREATIES
Barbados currently has 36 DTAs and 9 BITs in force.
Bilateral tax and investment treaties encourage trade and investment activities, provide incentives for businesses and promote business contracts.
The combination of tax treaties and fiscal incentives provide many advantages to the international business and financial services sector, including reduced rates or exemption from taxes at the country of source on dividends, interest, royalties, capital gains, pensions and annuities.
From the late 1950s, the Barbados Government has deliberately pursued a diversification policy, in an effort to expand the country’s narrow resource base. In 1957, the Government established the Barbados Development Board to promote an organised form of manufacture and to woo investment by invitation. The policy adopted by this Board was one of ‘Industrialization by Invitation’. The Government offered incentives in an effort to stimulate investment, in the manufacturing sector in particular. These incentives took the form of tax holidays, duty-free concessions on equipment and raw materials, low-cost factory space and the presence of a facilitating agency. This development model utilizing foreign direct investment had as an overall objective, to supply the industrial sector with the institutional, technical, financial and policy support necessary to expand its output and improve its competitiveness, thereby enabling it to face successfully the challenges of international trade well into the 21stcentury.