The International Business and Financial Services Unit
The policy setting mandate of the IBFSU is exercised by a technical staff complement of 10 persons who are supported by 6 clerical and administrative staff. The work of the Unit is divided into 4 programmes, key pillars of a framework which is critical for the realization of Government’s vision for Barbados as the financial services and wealth management centre of choice in the western Hemisphere.
The 4 programmes of the IBFSU are Trade in Services, Treaty Expansion, Supervision and Regulation and Research and Development.
Trade in Services
International financial services constitute a major component of all the services traded by Barbados. For this reason the Government has seen fit to include a “Trade in Services” component as part of the portfolio of the International Business Division. With the continued expansion of global trade in services and its significant impact on the rising income capacity of small economies, the Government of Barbados remains committed to exploring new opportunities for growth through export of services.
The export of services across all four (4) modes of supply continues to be the primary engine of growth for Barbados. The services sector is responsible for in excess of sixty (60) percent of the Gross Domestic Product (GDP) and is a major employer within the economy.
It is accepted that increasing the value added of services exported from Barbados is essential for ensuring the continued economic development of Barbados. To this end the IBFSU has a role to play in the development of the traditional and the non-traditional services sector.
The IBFSU continues to support the development and implementation of all aspects of the Treaty of Chaguaramas such that the single market and economy become a reality. Its work also takes the form of making recommendations and responding to commentary in relation to ongoing trade in services negotiations within the World Trade Organisation (WTO), related matters emanating from the G20, the G8, the European Union (EU) and other international fora facilitating the global trade in services.
It is in this context that the IBFSU will continue to develop and implement initiatives to further support the expanded development of services trade from Barbados using the facilities available in the international business sector and the wider economy.
Treaty Expansion
The negotiation of Double Taxation Agreements (DTAs) and Bilateral Investment Treaties (BITs) continues to play an integral part of the Government’s strategic plan for enhancing Barbados’ position as a well-regulated, transparent, treaty-based domicile. In light of the vision of the Government for the development of the Barbadian economy using international business as one of its pillars for doing so; and in the interest of reinforcing Barbados’ position as a serious player in the foreign direct investment market, the International Business and Financial Services Unit has simultaneously pursued the negotiation of agreements that mitigate the effect of double taxation while promoting and protecting investment in the country.
The IBFSU plays a key coordinating role in the Barbados Treaty Negotiating Team which has the task of negotiating these agreements on the Government of Barbados’ behalf.
DTAs are essential components of favourable investment regimes and usually serve as additional stimulus for the trade of goods and services. The avoidance of double taxation is a key element in international trade and thus promotes economic growth through serving as an efficient incentive to attract foreign investment. In particular a DTA is a very valuable tool for companies and individuals seeking comparative advantages in the global market place.
The conclusion of these agreements has been recognized as one of the most effective mechanisms for developing new and strengthening existing ties between Barbados and other countries. Indeed the Government of Barbados is of the view that the widening of its treaty network also constitutes a pragmatic approach to dealing with some of the challenges faced by small international financial centres.
To date Barbados has 36 DTAs in force, 2 DTAs awaiting entry into force dates, 5 DTAs and 1 protocol awaiting ratification and 4 DTAs awaiting signature.
In addition to DTAs, the Ministry and the Government of Barbados continue to view Bilateral Investment Treaties (BITs) as important instruments of economic policy for Barbados given their use not only to protect and promote investment, but also to send a positive signal, and constitute a competitive and judicial surety to both real and potential investors. Barbados has signed eleven (11) BITs, nine (9) of which are currently in force. The other 2 BITs are awaiting ratification.
Supervision and Regulation
Effective supervision and regulation of international business entities remains high on the list of priority areas for the International Business and Financial Services Unit. The protracted global financial crisis and global slow-down in business continue to serve as reminders of the importance of effective supervision and regulation.
Throughout the past year, the IBFSU has therefore sought to ensure that Barbados’ reputation as a transparent, well-regulated, responsible, and user-friendly domicile remains intact. These efforts are continuing given the dynamic nature of the sector and the wider international business environment. In this vein, the IBFSU remains committed to the strengthening of its administrative and operational systems which underpin the Unit’s critical role of supervising and regulating IBCs, ISRLs and International Trusts.
In August 2014 new licensing arrangements in the form of an indefinite licence system were implemented in the Supervision and Regulation Section of the IBFSU. The indefinite licence seeks to facilitate a more efficient and speedy processing of applications for licence renewals. Indefinite licences are valid until cancelled in accordance with the relevant legislation.
The International Business and Financial Services Unit is also in the process of finalising processes which would address the regulation of International Trust and Corporate Service Providers in Barbados. The Corporate and Trust Service Providers Act 2015 was passed on March 11, 2015 and proclaimed on May 1, 2015. Licensing of such providers is set to begin by November 27, 2015. Please find here the Application Form For Corporate and Trust Service Providers and the last Guidance Note #3 issued to the sector.
Research and Development
This programme describes the IBFSU in its ‘brainstorming’ mode. In association with traditional and non-traditional external partners the IBFSU looks ahead to the initiatives and projects that will enable Barbados to continue to develop a flexible, market oriented policy framework for the expansion and diversification of the international business sector. This programme seeks to drive the transformation of proposal to legislative imperative. It does this, through continuously keeping the IBFSU informed of matters of interest locally, regionally or internationally, which may then be brought under the spotlight for further development through the work of groups like the The Joint Policy Working Group. The goal of this programme is to increase the institutional capacity of the IBFSU and to maintain a policy platform for international business that is governed by creativity and innovation.
The new Strategic Plan 2014-2019 for the international business and financial services sector is the product of a collaborative process between the sector’s stakeholders and was spearheaded by the Division. This strategic plan outlines the blueprint to guide the sector in fulfilling the Government’s vision of Barbados becoming the wealth and financial management centre of choice in the Western Hemisphere.
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