Table of Statutes

This is a non-exhaustive list of the main Barbados statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute or the legal regime it forms part of.

Companies Act 1982
Exchange Control Act 1967
Exempt Insurance Act 1983
Fiscal Incentives Act 1974
Foreign and Commonwealth Judgements (Reciprocal Enforcement) Act 1922
Foreign Sales Corporations Act 1984
Foreign Sales Corporation (Amendment) Act 1994
Income Tax Act
International Businesses Companies Act 1991
International Financial Services Act 2003
International Trusts Act 1995
Limited Partnerships Act Cap 312
Offshore Banking Act 1979
Partnerships Act Cap 313
Proceeds of Crime Act 1990
Shipping Act 1994
Shipping Corporations Act 1996
Shipping Incentives Act
Societies with Restricted Liability Act 1995
Tourism Development Act 2003
Trustees Act Cap 250

In July 2000, Barbados pledged to make changes to its financial supervisory regime in order to have its name removed from an OECD blacklist.

The government of Barbados is planning to establish a Financial Services Authority, with the aim of enhancing the supervision and regulation of the non-bank international business sector.

Senator Lynette Eastmond, Minister of Commerce, Consumer Affairs and Business Development, disclosed in February 2007 that the proposed authority would integrate regulators of the Co-operatives Department, the Securities Exchange Commission, the Business Development Unit of the Ministry of Economic Affairs and Development and the Office of the Supervisor of Insurance and Pensions.

The minister revealed that “a variety of resources would be at its (the Commission's) disposal to further facilitate the growth and development of the financial sector of Barbados."

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Trust Law

Trusts in Barbados are governed by English common law and by the Trustees Act Cap 250 as amended, which deals with the powers of trustees. Appeal is to the Privy Council. There is no registration requirement or stamp duty; trustees can be non-resident as long as one is resident. A resident corporation acting as trustee must be licensed under the Offshore Banking Act (see Offshore Legal and Tax Regimes). Exchange controls apply to local trusts.

The Hague Convention has not been implemented; the maximum perpetuity period is 100 years.

Local (domestic) trusts are taxed as separate entities (see Domestic Corporate Taxation).

The International Trusts Act 1995 introduced purpose trusts and asset protection trusts, as well as strengthened protection against forced heirship provisions, non-recognition of foreign judgements, and protection against creditors. Creditors have three years in which to set aside the terms of a trust, but can only do so if they can establish an intent to defraud. A successful creditor can only set aside the terms of the trust in so far as he is prejudiced - he can't overset the whole thing unless that is necessary to satisfy him.

The rule against perpetuities does not apply, and accumulation of income is permitted for up to 100 years.

International trusts have considerable tax advantages (see Offshore Legal and Tax Regimes) and are exempt from exchange control; the following conditions must be fulfilled:

• the settlor must be non-resident when the trust is created and at subsequent times when property is added to the trust;
• trust property must not include Barbadian real estate or an interest in it;
• no beneficiary other than a Barbadian offshore entity can be a resident of Barbados at the time of creation of the trust, or at the time of any subsequent addition of property to the trust;
• at least one of the trustees must be resident in Barbados.

Note that beneficiaries can include Barbadian offshore entities - this means an exempt insurance company, an offshore bank, and an international business company. The Act defines 'resident' to include: ordinarily resident individuals, bodies, whether incorporated or not, majority-owned by residents; and trust management companies.

The Act lays down specific confidentiality rules, protecting the identity of settlor and beneficiaries, the workings of the trustees, the reasons behind trustees' actions, accounting information, etc. Confidentiality can only be broken by the Court or at the request of a beneficiary.

Trust Management has been a considerable activity in Barbados for 30 years or more, much of it conducted by the trust departments of banks. The International Trusts Act 1995 gave Barbados a modern, comprehensive, business-oriented trust regime which has proven attractive, particularly to corporate users. This new, wider market-place for trusts is not necessarily interested so much just in tax avoidance, but also in the efficient management of wealth in a more general sense.

There is a sophisticated community of professional advisers on trust matters in Barbados. Individuals can provide trust services without registration, but companies offering trust services must be licensed by the Central Bank under the Offshore Banking Act 1979. Foreign or Barbados-resident companies may obtain licenses.

See Offshore Legal and Tax regimes for details of the taxation of trusts in Barbados. Very tax-efficient structures can be formed using offshore trusts in combination with International Business Companies for international securities management.

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Banking Law

Barbados first established an offshore banking sector under the Offshore Banking Act 1979 as amended. The Act provided for the licensing of offshore banks, and contained a precise description of offshore banking. The Offshore Banking Act was repealed and replaced by the International Financial Services Act, 2003 which defines international financial service as the business of:

• Receiving foreign funds through:
  - Acceptance of foreign money deposits payable on demand, after a fixed period, or after notice;
  - Sale or placement of foreign bonds, certificates, notes or other debt obligations, or other foreign securities;
  - Any similar activity involving foreign money or foreign securities.
• Using the foreign funds mentioned above to finance:
  - Loans, advances and investments; or
  - Activities of the person carrying on the business.

Offshore/International Banking also includes the acceptance in trust of:

• Amounts of money in foreign currencies, foreign securities or both;
• Foreign personal or movable properties; and/or
• Real or immovable property outside Barbados from persons resident outside Barbados.

To qualify and obtain a license, an applicant must:

• Obtain the consent of the Minister to incorporate for the purpose of offshore banking. The government imposes a flat annual license fee of US$12,500.
• Show that it is an eligible company or a qualified foreign bank
• State the names and addresses of its director
• Submit a certified copy of its articles of incorporation;
• Give particulars of the proposed banking activity
• Submit the names of shareholders who are residents of Barbados and the number of shares held by them.
• Have at least one of the directors resident in Barbados.
• Minimum capital requirement for residents and non-residents of US $500,000 and US $125,000 respectively.

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