Business in Beautiful Barbados
When you mention Barbados, the first thing that comes to your mind is the beauty of this island. However, of late, this nation has also become a favourite investment destination for many. This is mainly because of it’s simple entry requirements and procedures which is a combination of both due diligence and the ease of doing business. In fact, the United States has a huge market share in Barbados, with about 40 per cent of it’s imports coming from the US. The US and Barbados have such a close relationship that even some of the business formations are similar to each other. These include limited liability companies, limited partnerships and non-profit companies. To deal with the increasing number of inquiries and businesses into the island, Barbados has several company types to oversee and assist external business operations, such as the Barbados International Business Company. When you want to start a business there, the first thing is for you to register with The Corporate Affairs And Intellectual Property Office (CAIPO). Here you can either register your business as a sole proprietorship, partnership or a limited liability company.
For a sole proprietorship, you need to choose a business name acceptable to the Registrar and for a partnership, you and your partners need to sign a Partnership Agreement. If you opt to set up a limited liability company, it would be best to first consult your lawyer and the next to register your business trademark name with CAIPO. Another step to be followed is to register with the National Insurance Department and the Barbados Central Revenue Authority. Once you have done this, you will be given an Employer’s Income Tax number and a Value Added Tax number. As for those who may be seeking to venture into the entertainment business, then you will need to get a Public Entertainment License.
Choosing your line of business
At present in view of the current economic scenario in Barbados, there are four main sectors that rake in high foreign exchange. These sectors are mainly in international business services, manufacturing, tourism and agriculture. In terms of contributions to the country’s GDP, the main businesses are retail trade, wholesale trade, tourism and government services. In fact, due to it’s enchanting beauty, tourism is among the main industries in this country. In line with this, the favourite business option is for foreigners to set up bars, clubs, cafes, travel agencies and even art galleries. These businesses are mostly aimed at the booming tourism industry in the country and also the expat community.
Customs & Excise Requirements
As for this area, unless you are planning to import raw materials or certain equipment for your businesses, you will need to check with the Customs and Excise Department of the Central Revenue Authority whether you would need a particular licence. In the event a particular licence is required, the next step would be to register with the Customs and Excise Department. Here, you will be given an import number with which you can proceed to import the items you require. However, if you do not adhere to these procedures, you may end up facing unnecessary delays or even have your items rejected altogether from entering the country.
In terms of taxes, income taxes for company profits are based on a sliding scale starting at 2.5% for profits under $5 million USD to 0.25% for over $15 million USD. IBCs which pay taxes are allowed a tax credit which can be reduced to the minimum 0.25 per cent rate. There are also no capital gain taxes while IBCs owned by a Barbados Offshore Trust and managed in accordance with the International Financial Services Act. Also, one must remember that annual tax returns are required and companies and corporations whose year end is before September 30th must file by the following March 15th. All others must file by the following June 15th.
For those venturing into the business of food processing, childcare, opening a restaurant or even a salon, there are certain health requirements which must be followed before you get a license. Licensees for these areas will be issued by the Ministry of Health. This can be done either through their main offices or even though any other polyclinic in the island. However, you must note that your business’ premises will have to be inspected before a license can be issued.
Another plus point for investing in this beautiful island is the increased scrutiny and regulation of financial services by international organisations such as the OECD. This has, among others, determined that its regulations and tax and other bilateral treaties work effectively to provide adequate transparency and exchange of information to its trading partners. Over the years, Barbados has strongly built it’s reputation as an appropriately regulated jurisdiction which is built on a tradition of transparency. A further boon is the island’s well-educated and skilled workforce, as well as a developed infrastructure and telecommunications system. These provide significant benefits to International corporations and individuals. Furthermore, the cost of doing business in Barbados is less expensive than in many other International jurisdictions.