Barbados: Offshore Business Sectors
Real Estate Holding
Barbadian International Business Companies have been put to a variety of uses, but one of the most popular has been as holding vehicles for US real estate, taking advantage of the terms of the US/Barbados double tax convention.
The US tax convention has anti-treaty-shopping clauses (strengthened in the Second Protocol ratified in 2004), but they are more favourable than is the case in many other double tax treaties. Essentially, a non-Barbadian person can use a Barbados International Business Company to hold the shares of a US real estate company (which should be income-producing); this structure can take advantage of the treaty provisions to escape US estate duty, among other tax benefits. See Double Tax Treaties and Offshore Legal and Tax Regimes for further details.
NB: This is a heavily simplified description. The interplay of US tax rules, Barbadian tax rules and the Barbados/US Tax Convention are complex, and professional advice is essential before entering any offshore transaction or structure.