The island state of Barbados with a small area (only 430 square meters) in the Atlantic Ocean, was for many years under British rule, but since 2021 has become a parliamentary republic. Accordingly, the official language is English, and the currency is the Eastern Caribbean dollar pegged to the U.S. dollar.

Now the state is one of the leaders in living standards among developing countries. The main income comes from sugar cultivation, tourism, and offshore business. There is no pressure from the state on foreign business, as it brings a significant part of profit to the treasury. For many years the government has built up an attractive system of benefits and incentives to attract investment. The authorities offer favorable tax rates, freedom in currency payments (there is no currency control), data confidentiality, and an expanded system of banks (about 40 recognized by the OECD) to register companies in Barbados and conduct international business. Also signed tax agreements with more than 40 countries: the USA and Canada (the main partners), China, Germany, Belgium, and Switzerland. Barbados remains a member of the Commonwealth of Nations, which gives its privileges.

Advantages of registering a company in Barbados

Attractive taxation.
A corporate tax rate of only 2.5%, no capital gains tax, customs duty, stamp duty, or gift tax.

Minimum requirements for incorporation.
No residency requirements for directors/founders, there should be only one shareholder. Company registration in Barbados costs about $1000.

Increased confidentiality.
Closed registers of company owners, as well as information about their property and capital.

Minimal financial reporting requirements.
Only a tax return is filed annually, and documents can be stored anywhere at the company’s discretion.

Financial stability and developed legislation.
Possibility to conduct any type of business, for banking and insurance activities it is necessary to undergo licensing.

Requirements for opening a company in Barbados

Company formation in Barbados requirements consist of:

  • Select a unique name for the company (may include abbreviations: Ltd., Inc., Corp. for IBC).
  • Provide company documents (contracts, memoranda, protocols, certificates, etc.).
  • Minimum one managing director (no residency requirements), but must provide residential address data.
  • Minimum one shareholder/owner (residency of any country), must notify the address of registration
  • No requirements for the number of directors’ meetings, and owners.
  • There is no norm for the amount of authorized capital, but banks require $1000, average capital size is about $50k.
  • Open a bank account (can be in US dollars)
  • Have a local registered office

The process of opening a company in Barbados

For company registration in Barbados it is necessary to go through the following steps:

  • Stage 1

Determine the type of business structure and the need to obtain a license

Among the possible options for registration are:

  • Limited Liability Company (the most common type)
  • charitable activity
  • insurance
  • Stage 2

Register a name

The name should be unique and not be repeated with companies already established on the island. Registration is carried out by the Office of Corporate Affairs and Intellectual Property, established back in 1988 (there is an option to reserve the name for 90 days before making a final decision).

  • Stage 3

Preparation and collection of documents

The package of documents includes founding documents, data on managers and owners, legal addresses, notarized Memorandum and Articles of Association, and other founding documents.

  • Stage 4

Open a bank account

More than 40 banks are operating in the territory, among them: RBC Royal Bank, Butterfield Bank, Firstcaribbean International Bank, RBTT Bank, and Republic Bank.
It usually takes approximately 4 weeks to open a corporate bank account.

  • Stage 5

Submit the documents to the tax office

Registration with the Barbados Central Tax Office is required, where the company will be assigned an income tax number.

  • Stage 6

Comply with all business requirements

Among the requirements:

  • Timely filing of annual returns, financial statements, and accounting documents can be kept outside the state
  • Changes in the structure of the company must be reported to the state authorities
  • Payment of corporate tax according to the amount of profit earned
  • If the profit exceeds 2 million BDS, an audit must be conducted

Documents required to register a company in Barbados

The package of documents may vary depending on the type of business chosen and the need for licensing (for banks, insurance organizations, investment trusts, and asset/capital management).
The general document package consists of:

  • For managers, shareholders/founders, and pass-throughs provide a resolution to appoint a director, copies of passports, proof of domicile address (bills, receipts, contracts, etc.), and a description of employment activities
  • Articles of Association (where the corporate policy is described), memorandum of association (with a description of the type of activity), office lease agreement/resolution, and minutes of the shareholders’ meeting.
  • Application for incorporation of the company to the Corporate Affairs and Intellectual Property Department

The registration process can be done remotely, lasting about one month.

Establishing an International Business Corporation (IBC) in Barbados

In Barbados, business activities are regulated by the Companies Act (1982) as amended in 2019.

The most popular form for conducting international business has been the IBC:

  • A prerequisite for an IBC is registration on the island with a local office
  • IBC company is prohibited from owning real estate on the island, to do business with residents
  • Managers and owners can be both individuals and legal entities, there are no residency requirements.
  • It is obligatory to have at least one director, one shareholder, and a secretary (must reside in the territory of the state).
  • No tax on income received from non-residents of the country
  • Progressive income tax scale
  • Auditing if income over $500 thousand from the Association of Accountants of Barbados.

To obtain an IBC permit, you must apply to the International Business Department (MIBI) and specify:

  • Type of activity (trading, service, financial services, etc.)
  • Provide the names and addresses of the shareholders (Commonwealth Caribbean residents cannot hold more than 10%)
  • Provide information on the percentage of shares (Caribbean Commonwealth residents cannot receive distributions/dividends of more than 10%)

The IBC registration package includes:

  • Articles of Association, Memorandum of Association, minutes of meetings, contracts
  • Authorized capital of $50,000 with proof of the origin of the money. It is also necessary to explain the origin of the money for shareholders with 10% capital.
  • A document confirming the entry into office of the managing director, as well as his passport data
  • Proof of local office
  • Resolution on the opening of a bank account (with a description of who will have the right to sign)
  • Applications for registration

Documents for obtaining IBC status must be submitted in English and notarized, the registration period may take up to 3 months.

Types of companies in Barbados

Barbados provides opportunities to register various types of business under the Companies Act. Different types of legal entities have different requirements, all depending on the purpose and size of the company.
A brief description of the different types:

  • Regular Barbados Company (RBC), doing international business is possible with authorization from the Central Bank. This type of business is suitable for doing business with residents of Barbados. Limited Liability Companies (SRL), international activities only with the authorization of the Central Bank. No requirements for authorized capital, no currency control, and no taxes on payments to non-residents.
  • International Business Company (IBC) operates based on the Law on International Business Companies and conducts activities such as buying and selling goods outside the country, services for non-residents, and export; must have a license from the Ministry of Industry and International Business and pay an annual fee ($100). The obligatory condition is to have an office in the territory of the state, to provide data on directors and shareholders, and to pass the audit of financial statements for income over $500 thousand.
  • International Limited Liability Companies (ISRL) are regulated by the Limited Liability Companies Act (SRL Act) of Barbados and must obtain a permit for international activities. Cannot do business with residents, nor can they purchase land in Barbados.

Taxation in Barbados

There is no capital gains tax or VAT for an IBC company, and there is no stamp duty.
Corporate income tax here is defined as profits derived from business or property for the year. Taxation of company dividends is governed under the Barbados Income Tax Act (BITA) and depends on the residency of the company.
Barbados Income Tax Rates:

  • For resident and non-resident commercial companies: 25%.
  • Insurance organizations (life): 5%, general insurance: 25%
  • Manufacturing firms:15%
  • IBC (banks, commercial companies, international business): 0.25%-2.5% depending on income
  • For branches: 10%

FAQ about Company formation in Barbados

How do I incorporate a company in Barbados?

Gather the necessary documents and submit them to the Corporate Affairs and Intellectual Property Department

How much does it cost to register a company in Barbados?

Depending on the chosen business structure, the need to obtain a license. Registration will cost from $1000

How long does it take to register a company in Barbados?

Registration can take up to one month and for IBC up to 3 months.

Can foreigners open a business in Barbados?

Yes, there are no residency restrictions in the laws of this country. The owner, director, and shareholder can be both resident and non-resident.

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