Barbados Offshore Company
The Barbados International Business Company (IBC) is the widely most used corporate vehicle for offshore activities. The Barbados International Business Companies Act of was passed enabling the incorporation of Barbados offshore companies. Today, the Barbados offshore company is considered an excellent business company used by regional and international manufacturing and trading companies in Barbados.
Barbados International Business Companies are companies incorporated and registered in Barbados, strictly operating and trading outside Barbados. Offshore companies Act does permit the Barbados offshore company to have its control and management offices in Barbados and, the Barbados offshore company can also establish manufacturing, industrial and production facilities in Barbados as long as the goods are manufactured exclusively for export. No Barbados IBC is allowed to provide goods and services to the Barbadian public.
If a Barbados IBC is managed by a local resident, the company is considered a “resident” offshore company. The managing resident must have a license to conduct international business only after proving its capability as a functional Barbados IBC.
Non-resident Barbados IBCs are either directly or indirectly controlled by one or more persons who are not residents of Barbados. In this case, the beneficial owners (nonresident) can hold no less than 50% of all shares and classes of shares issued.
The Barbados offshore company cannot do business with residents of Barbados or CARICOM (Caribbean Community) member countries. Outside of these restrictions, the Barbados international business company can be used for business or trading any and every else in the world.
Within the context of the Barbados IBC Act, it is possible for Barbados international business companies from within Barbados to carry on any form of legal business activity for goods or services that are not physically in Barbados or intended to be transshipped from or through Barbados. This can include manufacturing, agent and brokerage services. Barbados IBCs may also offer services through another international business company or on behalf of a company which provides services to the local public. Manufacturing business carried on in Barbados by an international business company can involve preparing, packaging, making and processing products solely for export.
The first step to forming a Barbados offshore company is to incorporate a local Barbados company under the Barbados Companies Act. Once done, the application for the Barbados International Business License (the offshore license) is submitted to the Ministry of Finance which would qualify the Barbados Company to operate as an offshore company.
The application will include the names and addresses of the shareholders and directors of the Barbados offshore company. All Barbados offshore company names must indicate Limited Liability and therefore one of the following endings (or the abbreviation) must be used: Limited, Corporation and incorporation. Once the license for the Barbados offshore company is granted the Barbados offshore company is free to operate as such. Barbados offshore companies benefit from tax exemptions, which are provided for by legislation. Offshore companies incorporated in the offshore tax haven of Barbados will benefit from the low tax regime which has been put in place.
Barbados offshore companies require only one (1) shareholder and one (1) director for incorporation. The Barbados offshore company must appoint a resident company secretary.
Offshore legislation allows for the appointment of both corporate and individuals as offshore company directors in Barbados. Barbados offshore companies laws provide confidentiality for the owners and directors of Barbados offshore companies. Despite the fact that the names of these persons and other information have to be submitted to the Registrar General for registration it is not made part of public records. Barbados offshore corporations, similar to Belize corporation,’ should have a registered office in Barbados, where company documents such as meeting minutes, accounting records and registers are kept.
Annual returns are not required for the non-resident Barbados offshore company. Audits are required only if the assets of the Barbados offshore company exceed BDS1M.
The low tax Regime imposed on Barbados IBCs is imposed on profits and gains, but the Barbados Company does have access to a suite of tax exemptions. The profits and gains tax applied is based on value of revenue and ranges between 1% and 2.5%, or alternatively can be substituted with tax credits. If the taxable income listed below is paid to non-residents, Barbados Companies receive full Tax exemptions.
- Royalties, fees, interest, management fees and dividends that a Barbados IBC pays to another IBC or
- International share, securities or asset transfers and shareholders or transferees
- VAT, consumption tax, stamp duty, Customs duties on raw materials, spare parts, appliances, material, machinery, equipment needed for manufacturing
- Taxes on income, dividends, interest, succession, death and gifts.
Barbados international business companies can be exempt from the profit and gains taxes if an only if the company is managed by an offshore bank and if the company’s shares are part of the assets of a trust regulated under the International Banking Act. IBCs operating under this setup are restricted to selling, holding, buying and managing any securities.