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BARBADOS EXECUTIVE SUMMARY
Barbados
Executive Summary
Barbados Is In The Caribbean And Caricom
Barbados
is a sub-tropical island in the Caribbean; it
is a member of Caricom, the Caribbean Common Market.
Quite densely populated, with 280,000 people of
mostly African descent on 430 sq km, Barbados
is an independent Commonwealth member. It is politically
stable; English is the official language; and
the Barbadian dollar is fixed against the US dollar
at 2:1. The climate is warm and humid; sea breezes
compensate for high summer temperatures. GNP/head
of US$19,700 at PP is reasonable.
One-Crop
Economy Has Successfully Diversified
Barbados
was mostly a sugar producer but the island has
diversified into tourism, manufacturing (with
a host of incentives), informatics and financial
services. After a bad time in the 1980s, Barbados
has grown well in the 1990s, although slowing
down in 1998/99. The impact of 9/11 was moderately
serious, with the economy contracting slightly
in 2002, but rebounding between 2003 and 2007.
Unemployment has been reduced from catastrophically
high levels to less than 10%. In the last ten
years the Government has been business-friendly
and economically sound.
Barbados's
Lowtax Specialisations
Barbados
has preferred quality to quantity, and has developed
a remarkably wide range of offshore formats to
suit all tastes! A good US tax treaty and the
Foreign Sales Corporation legislation (now repealed)
have particularly encouraged US interest; Canada
has also been a traditional partner. The offshore
insurance sector is as big as the BVI's, and there
are 57 offshore banks. Barbados is very picky
about who it will have, and probably stands in
better with the OECD than many OIFCs, although
it is nervous about current developments. There
is a stock exchange, fully computerised as from
July 2000, with a central depositary; but mutual
funds have not yet developed strongly. Barbados
probably has a good shot at becoming an e-commerce
centre if it plays the right cards - so far the
Government doesn't seem sufficiently aware of
this.
Lots
of Taxes In Barbados!
Alongside
a really large selection of corporate formats,
Barbados has many different taxes. Although the
introduction of VAT in 1997 got rid of eleven
of them, there are plenty left, and for a resident
person rates are quite high. The structure of
manufacturing and other incentives is complex,
but properly used can reduce the tax burden substantially.
It may be that fewer, simpler taxes would be beneficial;
anyway, an offshore business will be able to avoid
all taxation in one way or another.
In July 2000, Barbados
pledged to make changes to its financial supervisory
regime in order to have its name removed from
an OECD blacklist; in February, 2002, shortly
before the OECD finally published its long-delayed
revised list, Barbados was removed.
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