Barbados
International Business Company (Company limited by shares)
Companies incorporated under the International Business Companies Act of Barbados are a versatile vehicle for companies who want to headquarter their international operations on the island.
International Business Companies (IBCs) may not conduct trading with residents in Barbados. An IBC may manufacture, process or otherwise prepare products from within Barbados for export outside of the CARICOM area or trade and provide services exclusively to non-CARICOM residents.
Registering an IBC will benefit from a very low tax rate from of 2.5% of income down to 0.5% depending on the income level. Tax-exemption on capital gains, no withholding taxes, exempt from exchange controls on foreign currency and exempt from import duties and taxes on materials, machinery, plant and equipment.
In addition, a tax credit is available for foreign tax paid, if it does not reduce total tax payable in Barbados to less than the 0.5% minimum tax rate.
Barbados has concluded trade agreements with several jurisdictions, including the U.S., Canada and the European Union.
International Business Companies are vehicles often used for the business of making, processing, preparing or packaging within Barbados any product that is exclusively for export, broker, agent, dealer, seller, buyer or factor within Barbados of goods existing outside Barbados or of goods to be trans-shipped through or from Barbados, providing services which are to Barbados non-residents.
Barbados has signed up the OECD's Automatic Exchange of Information for tax purposes (AEoI) and is committed to undertake the first exchanges of information through Common Reporting Standard (CRS) in 2018.
All in all, Barbados International Business Companies are a powerful tool for international trade, commerce, manufacturing operations and holding company for both intellectual property and for investments in foreign subsidiaries, with low costs and minimum requirements.
Legal
Country code – BB
Legal basis – Common law
Legal framework – International Business Companies Regulations 1992, International Business Companies (Amendment) Act, 2012, International Business (Miscellaneous Provisions) Act 2014-9.
Company form – International Business Company (Company limited by shares)
Liability - The liability of the shareholders is limited up to the amount of the shares they hold.
Business restrictions – International Business Companies (IBCs) may not conduct trading with residents in Barbados. An IBC may manufacture, process or otherwise prepare products from within Barbados for export outside of the CARICOM area or provide services exclusively to non-CARICOM residents.
Share capital – There is no authorized share capital established, however, the usual authorized share capital is US$1,000, divided into 1,000 shares of US$ 1. The share capital may be expressed in any currency. There is no statutory requirement for capital to be fully or partly paid on incorporation. Shares may be issued in any class, as long as they are denominated in non-par value. Bearer shares are not permitted.
Shareholders – International Business Companies may be formed by one or more shareholders, who can be either natural or legal persons, residents or non-residents. Local or CARICOM residents’ shareholding is restricted to maximum 10%. Details of shareholders are not publicly disclosed. Nominee shareholders are allowed.
Directors – At least one director is required, who may be a natural person or a legal entity, as long as the legal entity is registered in Barbados. Directors’ details are available to the public.
Secretary – The appointment of a local licensed secretary is required.
Registered Address – An IBC must have a registered office in Barbados, provided by a licensed service provider.
General Meeting – Annual general meetings are mandatory, but can be held anywhere. The first annual general meeting must be held no later than 18 months from the incorporation of the Barbados IBC. Thereafter, annual general meetings should be held in intervals not more than 15 months.
Electronic Signature – Permitted.
Re-domiciliation – A foreign entity can be re-domiciled as a Barbados IBC, and vice versa.
Compliance – Barbados’ IBCs must keep accounting records, which may be kept in or outside Barbados. IBCs are required to submit financial statements and tax return annually. Financial statements are not available to the public.
Audit may be required if gross revenue or company assets exceeds approximately US$2,000,000. Audit reports should be signed by a professional member of the Institute of Chartered Accountants of Barbados.
IBCs are subject to a license fee, which must be renewed annually.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- USD 1 Minimum issued capital
- - Minimum paid up capital
- USDAny Capital currency
- Anywhere Location of annual general meeting
- 2017 AEOI
Taxes
Basis – Companies incorporated under the International Business Companies act are restricted to trade with CARICOM residents and are subject to tax on their foreign-source income.
Tax rate – International Business Companies (IBCs) deriving income solely from sources outside Barbados are taxed at regressive rates: 2.50% on net income up to BBD 10,000,000, 2% on net income between BBD 10,000,000 and BBD 20,000,000, 1.5% on net income between BBD 20,000,000 and BBD 30,000,000 and 0.25% on net income in excess of BBD 30,000,000.
Capital gains - Capital Gains are not taxable in Barbados.
Dividends – Dividends received from foreign entities may be tax-exempt, provided that the Barbados company holds at least 10% of the capital of the foreign entity the shares are not held as a portfolio investment.
Interests - Interest income is subject to taxation at standard rates.
Royalties – Royalty income is subject to income tax.
Foreign-source income – International Business Companies pay tax on their income accrued offshore. A tax credit for taxes paid outside Barbados is usually available, provided that this does not reduce the company's corporate income tax rate in Barbados to less than 0.25%.
Withholding taxes – International business companies are not required to pay withholding taxes on their remittance of dividends, royalties, interest, management fees, fees, or other income paid by IBCs to persons outside Barbados.
Losses – Losses arising from taxable income may be carried forward for 9 years. Carryback of losses is not allowed.
Inventory - Inventory valuations are generally stated at the lower of cost and net realisable value. First in first out method (FIFO) or average values may be used for book and tax purposes. Last in first out (LIFO) is not allowed for tax purposes.
Anti-avoidance rules – Barbados has not enacted transfer pricing regulations, although revenue authorities may amend assessable income of a company where they deem that the main purpose of a non-arm's-length transaction is to artificially reduce its assessable income. Thin capitalization and controlled foreign companies rules are not applicable.
Labor taxes – Employers and employees are required to make contributions to the National Insurance fund at 11.25% and 10.25 on employees’ monthly income, respectively, up to a maximum of insurable earnings of BBD 4,360 per month or BBD 1,006 per week.
Tax credits and incentives – A tax credit for taxes paid outside Barbados is usually available, provided that this does not reduce the company's corporate income tax rate in Barbados to less than 0.25%.
IBCs benefits from freedom from exchange controls, as well as duty-free concessions on certain imports.
Compliance – On average, a company in Barbados may require 28 payments and 237 hours per year to prepare, file and pay taxes.
Personal income tax – An individual is tax resident in Barbados if spends more than 182 in Barbados in a tax year. Residents are taxed on their worldwide income, while non-residents pay taxes on their Barbados-source income.
Income tax rate is 16% on the first BBD 35,000 and 33.5% on the excess. Capital gains are not subject to taxation.
Other taxes – V.A.T. standard rate in Barbados is 17.5%. A rate of 8.75% is applied on hotel accommodation. An increased 22% applies to mobile phone services. There are several goods and services tax-exempt.
Real property tax is levied on building and lands on their property value. Tax rate ranges from 0.1% to 0.75%, being the first BBD 150,000 zero-rated. Certain transactions are subject to a stamp duty. For transfer of real property is levied a 1% stamp duty.
There are no inheritance and wealth taxes in Barbados.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 2.5% Offshore Income Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 7 Losses carryforward (years)
- FIFO Inventory methods permitted
- 10.10% Social Security Employee
- 11.25% Social Security Employer
- 35% Personal Income Tax Rate
- 17.5% VAT Rate
- 44 Tax Treaties
Country details
Barbados is one of the twelve countries that form the Caribbean Antilles. Its capital and most populated city is Bridgetown.
Located in the Lesser Antilles, it is the most easterly of the islands, lying to the east of Saint Lucia and Saint Vincent and the Grenadines.
Spain conquered the island because that was where Columbus arrived on his first voyage in the 15th century. In the seventeenth century the English turned the place into a colony of the United Kingdom. This situation remained until 1966, when its town declared the independence the 30 of November. That year he joined the UN and the Commonwealth of Nations.
It is a constitutional monarchy, with Isabel II as head of state and Governor General Elliot Belgrave as its representative on the island. Its population exceeds 290,000 inhabitants. The official language is English and its official currency is the East Caribbean Dollar (XCD), which is pegged to the US $ at 2.7: 1 ratio.
Barbados is one of the most developed country in the Eastern Caribbean and has one of the highest per capita incomes in America.
Although the traditional Barbadian economy was based on the production of sugar, the main export commodity, currently tourism is its main economic activity, with tourists mainly from United States and Europe.
At present, it has partially diversified its economy with industries such as manufacturing, construction and mining.
Barbados is a CARICOM member and has concluded trade agreements with several jurisdictions, including the U.S., Canada and the European Union.
The international business and financial services sector is one of the most important contributor to the economy of Barbados, given its business-friendly legal framework and its low tax regime.
Tax treaties
Tax treaties Map
Services
Description
Barbados International Company (IBC/ISRL) – US$7,950.00 (All included)
We pride ourselves in providing the best possible professional service which includes our honest hassle free “No Hidden Fee” policy. Your incorporation package includes:
- Government incorporation and filling fee
- Bound set of Constitutional Documents
- Certified Copies of Constitutional Documents for bank account opening
- Registered Agent & Registered Office Fee
- Corporate Seal
- Courier fees
Time to form: 3 to 4 weeks.
All our incorporation services include a yearly consulting session, a dedicated account manager and access to our global network of trusted business services, including introductions to accountants, financial, tax and legal advisors at no cost.
Bank Account Options
- Barbados Bank Account (Remotely) – US$500.00
- Offshore Bank Account* (Remotely) – US$300.00
- Bahamas Bank Account (Remotely) – US$500.00
- Labuan (Malaysia) Bank Account (Remotely) – US$500.00
- Curaçao Bank Account (Remotely) – US$500.00
- Mauritius Bank Account (Remotely) – US$500.00
- Singapore Bank Account (In-person) – US$900.00
- Hong Kong Bank Account (In-person) – US$1,200.00
- Cayman Islands Bank Account (Remotely) – US$900.00
- Crypto-Friendly Bank Account (Remotely) – US$3,000.00
We include introductions to payment processors or merchant accounts with all of our incorporation services. Whether you just need standard credit card processing or specialized services for high risk processing, we are happy to help you with introductions that can empower your business.
*Offshore Bank Accounts: Belize, Puerto Rico, Nevis, Antigua, Saint Lucia. Other bank account options may be available depending on business profile and turnover.
Annual Fees (2nd year) – US$3,900.00
Including:
- Preparing and filing licence renewal
- Government fee for licence renewal
- Registered agent & registered office fee
Additional Services
- Audit fees – from US$7,000.00 to US$20,000.00 per year
- Tax compliance – from US$1,500.00 to US$4,500.00 per year
- Independent local resident director – US$3,000.00 per year