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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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