2017 Investment Climate Statements: Barbados

Policies towards Foreign Direct Investment

The Government of Barbados, through Invest Barbados, encourages foreign direct investment with the stated goals of creating jobs and earning foreign currency while having a positive impact on its citizens.

Through Invest Barbados the government instituted a number of investment incentives for businesses considering the possibility of locating in Barbados, encouraging both domestic and foreign private investment. Invest Barbados’ foreign direct investment policy is to actively promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors.

Barbados encourages investment in the following key sectors: international financial services, tourism, information technology, education, health, cultural services, agro-processing, hydroponics, and alternative and renewable energy. In the international financial services sector, the government maintains its regulatory oversight through standards designed to prevent money laundering and tax evasion.

Limits on Foreign Control and the Right to Private Ownership and Establishment

There are no limits on foreign control in Barbados. Nationals and non-nationals may establish and own private enterprises and private property in Barbados. These rights extend to the acquisition and disposition of interests in private enterprises.

No industries are closed officially to private enterprise, although the government reserves the right not to allow certain investments. Some activities, such as telecommunications, utilities, broadcasting, franchises, banking, and insurance require a license from the government. There are no quotas, or other restrictions, on foreign ownership of a local enterprise or participation in a joint venture.

Other Investment Policy Reviews

In 2015, Barbados conducted an investment policy review through the World Trade Organization. This report, which addresses the general investment climate in Barbados, can be found at https://www.wto.org/english/tratop_e/tpr_e/tp408_e.htm .

Business Facilitation

Invest Barbados is the main investment promotion agency facilitating foreign investment in Barbados in the identified key sectors. All potential investors applying for government incentives must submit their proposals for review by Invest Barbados to ensure the projects are consistent with national interests and provide economic benefits to the country.

Invest Barbados has the authority to offer guidance and direction to new and established investors seeking to pursue investment opportunities in Barbados. The process is transparent and takes into account the size of capital investment as well as the economic impact a proposed project will have on the country.

Invest Barbados offers a website that is useful for navigating applicable laws, rules, procedures and registration requirements for foreign investors. This can be found at http://www.investbarbados.org . Based on the type of business a foreign investor wishes to set up, there are different steps that must be completed. Potential investors should contact Invest Barbados for guidance in this process.

The Corporate Affairs and Intellectual Property Office (CAIPO) maintains an online e-registry filing service for matters pertaining to the Corporate Registry. It is available to registered agents (usually attorneys). Further information can be obtained at www.caipo.gov.bb .

According to the World Bank Doing Business Report 2017, Barbados is ranked at 101^st of 190 countries in ease of starting a business, which takes 8 procedures and 18 days to complete. The general practice is to retain an attorney to prepare relevant incorporation documents. A business must register with the Corporate Affairs and Intellectual Property Office, the Barbados Revenue Authority, the Customs and Excise Department and the National Insurance Scheme.

Outward Investment

While no incentives are offered, the government encourages companies to invest in other countries, particularly within the region. Such outward investment is generally encouraged, except where there may be political/diplomatic considerations. Local companies in Barbados are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the Caribbean Community and the Caribbean Single Market and Economy. The Barbados Investment Development Corporation provides market development support for domestic companies seeking to enhance their export potential.

Barbados has no bilateral investment treaty with the United States, but has a double taxation treaty and tax information exchange agreement. Barbados has bilateral investment treaties with Canada, China, Cuba, Germany, Italy, Mauritius, Switzerland, the United Kingdom, and Venezuela. Tax information exchange agreements with Denmark, the Faroe Islands, Greenland, and South Africa are also in force. Bilateral investment treaties with Luxembourg and Ghana are awaiting ratification. Barbados has a vast double taxation agreement network including Bahrain, Qatar, the United Arab Emirates, Singapore, China, Austria, Iceland San Marino, Mexico, Panama and Canada, with others awaiting ratification or signature. Further information is available from Invest Barbados. Barbados is also party to the following:

Caribbean Community (CARICOM)

The Treaty of Chaguaramas established CARICOM in 1973 to promote economic integration among its fifteen Member States. Investors operating in Barbados are given preferential access to the entire CARICOM market. The Revised Treaty of Chaguaramas goes further, establishing the CARICOM Single Market and Economy (CSME), which permits the free movement of goods, capital, and labor within CARICOM States.

Economic Partnership Agreement (EPA)

The Economic Partnership Agreement (EPA) was concluded between the CARIFORUM States and the European Community and its Member States in 2008. The EPA replaced the now expired transitional trade regime of the Cotonou Agreement. The overarching objectives of the EPA are to alleviate poverty in CARIFORUM, to promote regional integration and economic cooperation and to foster the gradual integration of the CARIFORUM states into the world economy by improving their trade capacity and creating an investment-conducive environment. The Agreement promotes trade related developments in areas such as competition, intellectual property, public procurement, the environment and protection of personal data.

Caribbean Basin Initiative (CBI)

The objective of the Caribbean Basin Initiative is to promote economic development through private sector initiatives in Central America and the Caribbean islands by expanding foreign and domestic investment in non-traditional sectors, diversifying CBI country economies and expanding exports. It permits duty free entry of products manufactured or assembled in Barbados into U.S. markets.

Caribbean / Canada Trade Agreement (CARIBCAN)

CARIBCAN is an economic and trade development assistance program for Commonwealth Caribbean countries in which Canada provides duty free access to its national market for the majority of products originating in Commonwealth Caribbean countries.

Transparency of the Regulatory System

Barbados’ legal framework fosters competition and establishes clear rules for foreign and domestic investors with regard to tax, labor, environmental, health, and safety concerns. These regulations are in keeping with international standards. The Ministry of Finance and Economic Affairs and the Invest Barbados Agency each provide oversight aimed at ensuring the attraction and channeling of investment occurs transparently.

Rulemaking and regulatory authority rests with Parliament. This bicameral legislature is made up of the House of Assembly and the Senate. The House of Assembly consists of 30 members who are elected in single seat constituencies. The Senate consists of 21 members who are appointed by the Governor General.

Foreign investment into Barbados is governed by the national laws of Barbados and their implementing regulations. These laws and regulations are developed with the participation of relevant ministries and are drafted by the Office of the Attorney General and enforced by the relevant ministry or ministries. Additional compliance supervision is delegated to specific agencies, by sector, as follows:

• Banking and financial services – Central Bank of Barbados
• Insurance and non-banking financial services – Financial Services Commission
• International business – International Business Unit, Ministry of International Business
• Business incorporation and intellectual property – Corporate Affairs and Intellectual
• Property Office (CAIPO)

The Ministry of Finance and Economic Affairs monitors investments to collect information for national statistics and reporting purposes.

All foreign businesses must be registered or incorporated through CAIPO and will be regulated by one of the other aforementioned agencies, depending on the nature of the business.

Although Barbados does not have legislation that guarantees access to information or freedom of expression, access to information is generally available in practice. The government maintains a website and an information service to facilitate the posting of information such as government office directories and press releases. The Government Information Service website is available at: http://gisbarbados.gov.bb/ . The government also maintains a parliamentary website, where it posts legislation prior to parliamentary debate and live streaming of House sittings. The government budget is also available on this website, available at: http://www.barbadosparliament.com/ .

Although some bills are not subject to public consultation, input from various stakeholder groups and agencies is enlisted during the initial drafting of legislation. Public awareness campaigns, through print and electronic media, are used to inform the general public. Copies of regulations are circulated to stakeholders, government ministries and departments, and are published in the Official Gazette after passage in Parliament.

Accounting, legal and regulatory procedures are transparent. Publicly listed companies publish annual financial statements as well as any changes in portfolio shareholdings, including share values. Service providers are required to adhere to international best practice standards including International Financial Reporting Standards (IFRS), International Standards on Auditing (ISA) and International Public Sector Accounting Standards (IPSAs) for government and public sector bodies. They must also comply with the provisions of the Money Laundering and Financing of Terrorism Prevention and Control Act. Accounting professionals, in particular, must engage in continuous professional development. All Barbadian financial service providers are regulated by the Corporate and Trust Service Providers Act. Failure to adhere to these laws and regulations may result in revocation of the business license and/or cancellation of work permit(s).

The Office of the Ombudsman is established by the Constitution to guard against excesses by government officers in the performance of their duties. It is the objective of the Office of the Ombudsman to provide quality service in an impartial, timely and expeditious manner while investigating complaints by Barbadian nationals or residents who consider the conduct of a government body or official unreasonable, improper, inadequate or unjust.

The Office of the Auditor General is also established by the constitution and is regulated by the Financial Administration and Audit Act. The Auditor General is responsible for the audit and inspection of all public accounts of the Supreme Court, the Senate, the House of Assembly, all government ministries, departments, government-controlled entities and statutory bodies. The Office of the Auditor General’s annual reports can be found on the Parliament of Barbados website.

Barbados is a member of the Caribbean Community and the Caribbean Single Market and Economy, which regulates trade within the Caribbean Community.

International Regulatory Considerations

Barbados adheres to international standards of best practice and is recognized by the Organization for Economic Cooperation and Development (OECD) as largely compliant. Barbados is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax matters as well as the Multilateral Competent Authority Agreement.

The Barbados National Standards Institution was established in 1973 as a joint venture between the Government of Barbados and the private sector under the Companies Act. It oversees a laboratory complex housing metrology, textile, engineering and chemistry/microbiology laboratories. The primary functions of the Barbados National Standards Institution include the preparation, promotion and implementation of standards in all sectors of the economy, including the promotion of quality systems, quality control and certification. The work of the Barbados National Standards Institution is governed by the Standards Act (2006) and the Weights and Measures Act (1977) and Regulations (1985). As a signatory to the World Trade Organization Agreement on the Technical Barriers to Trade, Barbados, through the Barbados National Standards Institution, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Legal System and Judicial Independence

Barbados’ legal system is based on the British common law system. Modern corporate law is modeled on the Canada Business Corporations Act. The Attorney General, the Chief Justice, junior (puisne) judges, and magistrates administer justice in Barbados. The Supreme Court consists of the Court of Appeal and the High Court. Appeals are made in the first instance to the Court of Appeal. The High Court hears criminal and civil matters and makes determinations on the interpretation of the Constitution.

The Caribbean Court of Justice is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. The Caribbean Court of Justice has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. In 2005, Barbados became a full member of the Caribbean Court of Justice; thus making the Caribbean Court of Justice its final court of appeal and original jurisdiction.

The United States and Barbados are both parties to the World Trade Organization (WTO). The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

Laws and Regulations on Foreign Direct Investment

Invest Barbados’ foreign direct investment policy is to actively promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors. The main laws concerning investment in Barbados are the Barbados International Business Promotion Act (2005), the Tourism Development Act (2005), the Companies Act, and the Fiscal Incentives Act. There is also a framework of legislation concerning International Business Companies, Financial Services, and Trusts.

All proposals for investment concessions and incentives are reviewed by Invest Barbados to ensure proposed projects are consistent with the national interest and provide economic benefits to the country. All proposals are submitted through Invest Barbados for final consideration.

Invest Barbados provides “one-stop shop” facilitation services to investors to guide them through various stages of the investment process. It offers a website useful for navigating the laws, rules, procedures and registration requirements for foreign investors. This can be found at http://www.investbarbados.org .

Competition and Anti-Trust Laws

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to Caribbean Community (CARICOM) States. Member States are required to establish and maintain a national competition authority for facilitating the implementation of the rules of competition. At the CARICOM level, a regional Caribbean Competition Commission is established to apply the rules of competition in respect of anticompetitive cross-border business conduct. The CARICOM competition policy addresses anticompetitive business conduct, such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within the Community and actions by which an enterprise abuses its dominant position within the Community. The Fair Competition Act codified the establishment of the Fair Trading Commission (FTC) in 2001. The Fair Trading Commission is responsible for the promotion and maintenance of fair competition and participates in the Caribbean Competition Commission. The Fair Trading Commission regulates the principles, rates and standards of service for public utilities and other regulated service providers. Sectorial regulation of competition in the telecommunications field is provided for under the Telecommunications Act.

Expropriation and Compensation

There are no pending expropriation cases involving American citizens. In such a case, the Barbados Constitution and the Companies Act (chap. 308) contain provisions permitting the government to compulsorily acquire property for public use upon prompt payment of compensation at fair market value.

Dispute Settlement

ICSID Convention and New York Convention

The Government of Barbados wrote the New York Convention’s provisions into domestic law, but did not ratify the convention. The Arbitration Act (1976) and the Foreign Arbitral Awards Act (1980), which recognizes the 1958 New York Convention on the Negotiation and Enforcement of Foreign Arbitral Awards, are the main laws governing dispute settlement in Barbados.

Barbados is also a member of the International Center for the Settlement of Investment Disputes (ICSID), also known as the Washington Convention. Additionally, individual agreements between Barbados and multilateral lending agencies have provisions calling on Barbados officials to accept recourse to binding international arbitration to resolve investment disputes between foreign investors and the state.

Investor-State Dispute Settlement

The Barbados Arbitration Act (1976) and the Foreign Arbitral Awards Act (1980) contain provisions for arbitration of investment disputes.

Barbados does not have a Bilateral Trade Treaty or a Free Trade Agreement with an investment chapter with the United States. U.S. Embassy Bridgetown is not aware of any current investment disputes in Barbados.

According to the World Bank Doing Business Report 2017, dispute resolution in Barbados generally takes an average of 1,340 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolution of commercial disputes. Barbados is ranked 167^th out of 190 countries in resolving contracts in the World Bank Doing Business Report 2017. Through the Arbitration Act of 1976, local courts recognize and enforce foreign arbitral awards issued against the government. Barbados does not have a recent history of investment disputes involving either U.S. or foreign investors.

International Commercial Arbitration and Foreign Courts

The Supreme Court of Barbados is the domestic arbitration body and the local courts do enforce foreign arbitral awards.

Bankruptcy Regulations

Under the Bankruptcy and Insolvency Act (2002), Barbados has a bankruptcy framework that recognizes certain debtor and creditor rights. The Act gives a potentially bankrupt company three options: bankruptcy (voluntary or involuntary), receivership, or reorganization of the company. The Companies Act makes provision for the insolvency and/or liquidation of a company incorporated under this Act. The World Bank Doing Business Report 2017 addressed the strength of the framework and its limitations in resolving insolvency in Barbados and ranked Barbados 167^th out of 190 countries in this area.

Investment Incentives

The Government of Barbados implemented a series of incentives to increase investment. Most of these are tax incentives, although there are additional special programs for manufacturers. Potential investors should contact Invest Barbados, a licensed accountant, and/or an attorney in Barbados to find out which incentives fit best with their goals.

According to the Small Business Development Act (1999), a small business is defined as having no more than 25 employees. These must be registered under the Companies Act, which applies to domestic and foreign-owned micro and small-sized enterprises. Such small businesses are not eligible for incentives under the Tourism Development Act, the Fiscal Incentives Act, the Special Development Areas Act, or the Shipping Incentives Act.

The Fiscal Incentives Act provides a maximum 15-year tax holiday to any manufacturer of an approved product, provided it meets the definition of an enclave enterprise: manufacturing exclusively for export outside of CARICOM; manufacturing approved products containing a specified percentage of local value added; or being highly capital-intensive. Under the Fiscal Incentives Act, such enterprises may import duty-free equipment, spare parts, and raw materials from outside CARICOM. Dividends and other distributions to shareholders during the tax holiday are also exempt from assessment of income tax. Non-resident shareholders liable to tax in their country of residence are subject to Barbados withholding tax at a lower rate. Under the Fiscal Incentives Act, an approved enterprise may be granted an additional period of five years of benefit if it is engaged in the production of new products or it engaged in new investment in plant, equipment technology or innovative methods of production and management of USD 500,000 or more for the three-year period preceding application. To qualify for these incentives, the enterprise must apply to the Ministry of Industry, International Business, Commerce and Small Business Development.

Enterprises not eligible for benefits under the Fiscal Incentives Act and generating export profits (other than from exports within CARICOM) may receive an export allowance expressed as a rebate of corporate tax on those profits. The maximum rebate of 93% applies if more than 81% of an enterprise’s profits result from extra-regional exports. The Export Development Allowance permits a company to deduct from taxable income an additional 50% of what the company spends in developing export markets outside CARICOM.

Initial allowances or investment allowances of up to 40% on capital expenditure are available for businesses making capital expenditures on machinery and plants, or on an industrial building or structure. Annual depreciation allowances on such expenditures are also available.

Barbados’ method of calculating exports allowance is as follows:

In the tourism sector, a market development allowance allows a company to deduct an additional 50% of what it spends encouraging tourists to visit Barbados. Under the Tourism Development Act of 2002, businesses and individuals that invest in the tourism sector can write off capital expenditure and 150% of interest. These entities are also exempt from import duties, value added tax, and environmental levies on furniture, fixtures and equipment, building materials, supplies, and equity financing. The Act expands the definition of tourist sector to include not just accommodation, but restaurants, tourist recreational facilities, and tourism related services. The Act encourages the development of attractions that emphasize the island’s natural, historic, and cultural heritage, and encourages construction of properties in non-coastal areas. The Ministry of Tourism must first be engaged on projects under this legislation.

The Act provides that “international business companies” may operate with a tax rate from 0.25 to 2.5%. An international company must, by the terms of its license, export 100% of its services or products in order to enjoy the following tax rates on gains and profits:

There are no withholding taxes on dividends, interest, royalties, or management fees paid to non-residents.

An international business company may import machinery and equipment into Barbados free from certain taxes and customs duties. International business companies in the information services sector have the same maximum tax rate of 2.5% on profits mentioned above, full exemption from import duties on production-related equipment, full and unrestricted repatriation of capital, profits, dividends, rental of subsidized office space, and training grants to subsidize worker training.

International financial service companies also enjoy several tax incentives. Under the Exempt Insurance Act, a company incorporating with a minimum capital of USD $125,000 and at least one Barbadian director will enjoy zero tax on profits for the first 15 years, and thereafter will be taxed at 8% on the first USD $125,000 of taxable income. The company would also be exempt from withholding tax on royalties and exchange control restrictions. Its beneficial shareholders must not be CARICOM residents. The law also allows companies involved in the international insurance business to register as “qualifying insurance companies,” entitled to a tax rate of 1.75%, after deducting a foreign currency earnings allowance, and exemption from withholding taxes and exchange controls.

The International Trust Act allows non-residents to create trusts for the benefit of non-residents, with no minimum capital requirements and no withholding taxes. However, a 35% tax applies to profits earned in or remitted to Barbados. Exempt “societies of restricted liability,” which may not acquire land in Barbados or transact business with CARICOM residents, enjoy certain concessions for up to 30 years, including exemption from exchange controls and withholding tax on dividends, royalties, interest, or other interest paid to non-residents.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are currently no foreign trade zones or free ports in Barbados. However, in August 2016, the Government of Barbados announced plans to establish a special committee to review a proposal establishing certain duty free zones. Such free zones would be established under the Duties, Taxes and Other Payments (Exemption) Act, the Tourism Development Act, and the Special Development Areas Act.

Performance and Data Localization Requirements

Companies must meet export performance requirements to take advantage of certain tax incentives. For example, “enclave enterprises” must produce goods exclusively for export outside the CARICOM region. Foreign investors must finance their investments from external sources or from income that the investment generates. When a foreign investment generates significant employment or other tangible benefits for the country, the authorities may allow the company to borrow locally for working capital. Invest Barbados may provide a training grant to qualifying manufacturing and information and communication technology enterprises during the initial operating period.

There is no requirement that locals own shares of a foreign investor’s enterprise, but some restrictions may apply to share transfers. The Companies Act does not permit bearer shares. Foreign investors do not need to establish facilities in any specific location, although there are some zoning restrictions on residential and commercial construction for environmental reasons. There is no requirement that enterprises must purchase a fixed percentage of goods from local sources. However, investors, particularly within the hospitality industry, are encouraged to use local products and produce wherever possible.

Non-nationals seeking to work in Barbados must apply for work permits. This is also required for all managerial and technical staff brought into Barbados. The work permit is specific to the job and employer and the permit may be granted for a period of up to five years for long-term permits. Short-term permits of up to six months are also available for staff that may be required to spend brief periods at the Barbados facility. One requirement for granting a work permit is that the expatriate must bring to the job special skills or knowledge not readily available in Barbados. While work permits are readily granted to senior management, the number of permits approved may be restricted depending on the amount of persons employed by the local company. No restrictions exist regarding foreign directors of boards. Further information can be obtained from the Immigration Department: www.immigration.gov.bb/pages/WorkPermit.aspx 

There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software turn over keys for encryption, etc.)

As a member of the World Trade Organization, Barbados is party to the Agreement to the Trade Related Investment Measures. The government strongly encourages investments that will create jobs, increase exports and foreign exchange earnings. There are no requirements for participation either by nationals or by the Government in foreign investment projects. There is no requirement for enterprises to purchase a fixed percentage of goods from local sources, but the government encourages local sourcing. Foreign investors receive national treatment.

Real Property

There are no restrictions on foreign ownership of property in Barbados. Foreign investors and locals are treated equally with regards to taxation on property. Civil law protects physical property and mortgage claims. The Central Bank of Barbados must verify real property purchases for non-residents. If a non-resident uses foreign funds and pays for the property in Barbados, the Central Bank of Barbados will normally endorse the transaction. The sale of property is subject to a 2.5% Property Transfer Tax in addition to a 1% stamp duty. Brokerage and legal fees are not included in those levies. Buyers should seek the advice of a local attorney when purchasing property.

With respect to commercial, industrial, hotel and villa properties, the applicable rate of land tax is 0.65% on the improved value of the property. A rebate of 50% is granted to hotels and 25% to villas, on production of a certificate from the Barbados Tourism Authority. The Commissioner of Land Tax charges an annual fee based on the assessed property value on residential property as follows:

In the World Bank Doing Business Report 2017, Barbados is ranked 130th of 190 countries in ease of registering property. It takes about 105 days to complete six procedures and the cost is about 5.6% of the property value. The report details the procedure to facilitate the purchase and registration of property in Barbados.

Intellectual Property Rights

While Barbados’ legislative framework governing intellectual property (IP) could be considered strong, enforcement generally could be strengthened. Barbados signed the Paris Convention on Intellectual Property Rights (IPR), the Nice Agreement, and is a member of the United Nations World Intellectual Property Organization (WIPO). The Government of Barbados adopted a new Copyright Act in 1998 and amended it in 2004 to provide tougher penalties. In the early 2000s, the government also approved legislation for Integrated Circuits Topography, Geographical Indications, and Protection against Unfair Competition. In addition, the government revised The Trademark and Industrial Designs Acts to meet world standards.

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the Caribbean Single Market and Economy commits all 15 members to implement stronger Intellectual Property protection and enforcement. The Economic Partnership Agreement (EPA) signed between the CARIFORUM States and the European Community in 2008 contains the most detailed obligations in respect of intellectual property in any trade agreement to which Barbados is a party. The EPA provides for the protection and enforcement of intellectual property. Article 139 of the EPA requires parties to “ensure an adequate and effective implementation of the international treaties dealing with intellectual property to which they are parties and of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS).”

In spite of this, Barbados remained on the Office of the United States Trade Representative’s Special 301 Report Watch List in 2016. The Special 301 Report noted while Barbados’ legal framework largely addresses IPR, the United States continues to have concerns about the interception and retransmission of U.S. cable programming by local cable operators in Barbados and throughout the Caribbean region without the consent of, and without adequately compensating U.S. right holders. The United States also has continuing concerns about the refusal of Barbadian TV and radio broadcasters and cable and satellite operators to pay for public performances of music. Barbados’ slow legal system, inert state of enforcement, and lack of reform contribute to their inclusion on the Watch List.

It is the responsibility of the importer to pay for and destroy counterfeit goods. Failure to observe certain National Standards Institution IPR standards regarding the importation of goods may result in a recommendation to the Comptroller of Barbados’ Customs and Excise Department to have the goods destroyed. If the goods fall under Ministry of Health jurisdiction, they are destroyed under that ministry’s guidance. If the goods are prohibited and do not pertain to the Ministry of Health, the Customs and Excise Department will destroy as appropriate. Information on the prevalence of counterfeit goods in the local market is not readily available, as there is no tracking method in place to collect data.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

Barbados has a small stock exchange, an active banking sector, and opportunities for portfolio investment. Local policies seek to facilitate the free flow of financial resources, with the exception of periods of low liquidity. Such was the case in late 2016 and early 2017, leading the government to intervene in the local credit market to control interest rates, limit the volumes of funds available for borrowing, and borrow on the local market. Historically, the Central Bank of Barbados independently raised or lowered interest rates without any government intervention. There remain a variety of credit instruments in the commercial and public sectors that local and foreign investors may access.

The government continues to review legislation in the financial sector in an effort to strengthen and improve the regulatory regime and attract and facilitate retention of foreign portfolio investments. During 2013, the Central Bank of Barbados underwent a Financial Sector Assessment Program (FSAP) assessment by the International Monetary Fund and The World Bank. The resulting Financial System Stability Assessment Report was published in February, 2014. The Report noted that since the 2008 FSAP Update, Barbados substantially improved its legal, regulatory, and supervisory frameworks to support the banking system. The International Financial Services Act, which replaced the Offshore Banking Act in June 2002, incorporates Basel standards, and provides for on-site examinations of offshore banks. This allows the Central Bank of Barbados to augment its offsite surveillance system for reviewing anti-money laundering policy documents and analyzing prudential returns.

In 2000, under the authority of the Money Laundering and Financing of Terrorism Prevention and Control Act, the government established the Anti-Money Laundering Authority and its operating arm, the government’s Financial Intelligence Unit. In 2001, the Bank Supervision Department of the Central Bank of Barbados, in conjunction with the Anti-Money Laundering Authority, introduced the Anti-Money Laundering Guidelines for Licensed Financial Institutions, which were revised in 2006, 2011, and most recently in October 2013.

The Securities Exchange Act of 1982 established the Securities Exchange of Barbados (SEB), which was reincorporated as the Barbados Stock Exchange (BSE) in 2001. The 1982 Act was replaced by the Securities Act, which removed regulatory responsibility for the securities market activity from the BSE. This Act helped to strengthen the regulatory framework and development of the capital market. In 1987, the BSE began trading corporate stocks and fixed income securities, including government bonds (not commercial paper). Activities on the BSE include regional cross-border trading arrangements for shares listed on the Trinidad and Tobago and Jamaica stock exchanges.

The BSE operates a two-tier electronic trading system comprised of a regular market and a junior market. Companies applying for listing on the regular market must observe and comply with certain requirements. Specifically, they must inter alia have assets of not less than USD $500,000 and adequate working capital, based on the last three years of their financial performance, as well as three-year performance projections. Companies must also demonstrate competent management and be incorporated under the laws of Barbados or other regulated jurisdiction approved by the Financial Services Commission. Applications for listing on the junior market are less onerous, requiring minimum equity of one million shares at a stated minimum value of USD $100,000. Reporting and disclosure requirements for all listed companies include interim financial statements, and an annual report and questionnaire. Non-nationals must obtain exchange control approval from the Central Bank of Barbados to trade securities on the BSE.

The BSE publicized its intent to fully immobilize traditional share certificates where clearance and settlement is computerized through the Barbados Central Securities Depository Inc., which is a wholly owned subsidiary of the BSE Inc. The Financial Services Commission, under the Property Transfer Tax Act, can accommodate investors requiring a traditional certificate for a small fee. The Financial Services Commission also regulates mutual funds in accordance with the Mutual Funds Act.

Since 2014, the BSE introduced new rules in accordance with International Organization of Securities Commission guidelines designed to protect investors, ensure a fair, efficient, and transparent market, and reduce systemic risk. Public companies now have only 90 days from the close of their financial year to file audited financial statements with the BSE, 30 days fewer than before. Additionally, a fine not exceeding USD $5,000 was added to the list of possible penalties for any person under the jurisdiction of the BSE who contravenes or is not in compliance with any regulatory requirements.

In 2016, the BSE launched the International Securities Market (ISM). It is designed to operate as a separate market, thus allowing issuers from not only Barbados, but other international markets. This is aimed at developing the international business and financial services sector, a key contributor to Barbados’ economy. The ISM is founded on a strong regulatory framework that includes the BSE, the Central Bank of Barbados and the Financial Services Commission. To date, the International Securities Market has two listing sponsors.

On February 6th, 2017, The BSE announced a historic collaboration with its regional partners, the Jamaica Stock Exchange and the Trinidad and Tobago Stock Exchange, through the adoption of new trading software. The capacity for this inter-exchange connectivity will provide a wealth of potential investment opportunities for both local and regional investors as the BSE seeks to position itself as a globally-recognized international exchange.

Barbados accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement and maintains an exchange system free of restrictions on current account transactions.

Money and Banking System

The Barbados domestic financial sector consists of five commercial banks, twelve trust and finance companies and merchant banks; and 25 offshore banks. There are also 34 credit unions and two money remitters. Since 2001, the government required Barbados institutions and legal entities to reveal the identity of beneficiaries receiving dividends and/or interest. The total assets for the banking system stood at USD $6.65 billion as of December 2016. The local cash reserve requirement was five percent, the foreign cash reserve requirement was two percent, and the securities reserve requirement was 10% over the same period.

The Barbados Deposit Insurance Corporation, which was established under the Deposit Insurance Act (2006), provides protection for depositors of deposit-taking financial institutions. Oversight of the entire financial system is conducted by elements of the Financial Oversight Management Committee, which consists of the Central Bank of Barbados, the Barbados Deposit Insurance Corporation and the Financial Services Commission. The private sector has access to financing on the local market through short-term borrowing and credit, asset-financing, project-financing and mortgage financing.

In 2015, the Central Bank of Barbados announced the decision to deregulate interest rates for savings accounts by removing the minimum saving deposit rate. Accordingly, commercial banks and other deposit-taking institutions now set their own interest rates.

In 2016, Bitt, a Barbadian company, introduced a blockchain-based electronic mobile wallet for consumers. This digital e-commerce solution is praised by advocates of the technology as cheaper to use, more secure and more traceable than cash. Officially launched in 2015, Bitt offers a digital asset exchange, remittance channel, and merchant-processing gateway available via a mobile application. Bitt is widely seen as the frontrunner in the Caribbean’s burgeoning cryptocurrency ecosystem and is expected to invest across the region.

International banks domiciled in the U.S., Canada and Europe are reviewing their correspondent banking relationships in regions they deem high-risk for financial services. The Caribbean witnessed a withdrawal of these services by U.S. and European banks in the last three years. In 2015, the Caribbean Community declared the loss of correspondent banking to be a grave issue facing the region. The Caribbean Community is committed to engaging with key stakeholders on the issue and appointed a Committee of Ministers of Finance on Correspondent Banking to collate a collective response to this issue.

Foreign Exchange and Remittances

Foreign Exchange

Barbados’ currency of exchange is the Barbadian dollar (BBD). It is issued by the Central Bank of Barbados. Barbados’ foreign exchange system is liberalized. The Barbadian dollar remains pegged to the United States dollar at a rate of BBD 2.00: USD 1.00 since 1975. As a result, the Barbadian Dollar does not fluctuate, creating a stable currency environment for trade and investment in Barbados.

Remittance Policies

Companies can freely repatriate profits and capital from foreign direct investment if they are registered with the Central Bank of Barbados at the time of investment. The Central Bank of Barbados has the right to stagger these conversions depending on the level of international reserves available to the Bank at the time capital repatriation is requested.

The Ministry of Finance and Economic Affairs controls the flow of foreign exchange and the Exchange Control Division of the Central Bank of Barbados executes foreign exchange policy under the Exchange Control Act. Individuals may apply through a local bank to convert the equivalent of USD $3,750 per year for personal travel and up to a maximum of USD $25,000 for business travel. One must apply to the CBB to convert any amount over these limits. International businesses, including exempt insurance and qualifying insurance companies, are exempt from these exchange control regulations.

Barbados is a member of the Caribbean Financial Action Task Force. In 2014, the government of Barbados signed an Intergovernmental Agreement in observance of the United States’ Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Barbados to report the banking information of U.S. citizens.

Sovereign Wealth Funds

The Central Bank of Barbados does not maintain a Sovereign Wealth Fund.

State-Owned Enterprises (SOEs) in Barbados work in partnership with ministries, or under their remit, and carry out certain specific ministerial responsibilities. There are currently about 60 SOEs in Barbados operating in areas such as tourism, investment services, broadcasting and media, sanitation services, sports and culture.

SOEs in Barbados are governed by their respective legislation and do not generally pose a threat to investors, as they are not designed for competition. However, many are established in the context of creating economic activity in areas where the private sector is perceived to have very little interest. As such, while Barbados recognizes the Organization of Economic Cooperation and Development (OECD) guidelines, SOEs in Barbados are not found in the key areas earmarked for investment. They are all wholly-owned government entities. They are headed by boards of directors to which senior management reports.

In addressing Barbados’ challenging fiscal situation, the IMF noted in a 2016 public statement that Barbados’ progress in reducing transfers to SOEs was slower than anticipated. Barbadian officials openly acknowledge the need to reduce the more than BDS 1.1 billion (USD 550 million) in annual transfers and subsidies consumed by the nation’s SOEs. In 2016, the government announced plans to privatize some SOEs in a bid to generate revenue and decrease fiscal liabilities. However, this process can be hindered by special interest groups, as is exemplified by delays in the sale of Barbados National Oil Company’s national oil terminal.

Privatization Program

Barbados does not currently have a targeted privatization program.

Responsible business conduct among both producers and consumers is positively regarded in Barbados. The private sector is involved in projects that benefit society, including in support of environmental, social and cultural causes. Individuals benefit from business-sponsored initiatives when local and foreign owned enterprises pursue volunteer opportunities and make monetary or in-kind donations to local causes.

The Non-Governmental Organization community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental and community projects. The government at times partners with NGOs. The government encourages philanthropy.

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. Corruption is generally not a major problem in Barbados, but one U.S. company reported unfair treatment by government officials. Barbados did not sign or ratify the Inter-American Convention on Mutual Assistance in Criminal Matters. Barbados signed, but did not yet ratify, the United Nations Convention on Corruption and the Inter-American Convention against Corruption.

In 2012, Barbados enacted the Prevention of Corruption Act (2010), which includes standards of integrity in public life. There is no separate integrity-related legislation.

In 2015, twelve Commonwealth Caribbean countries, including Barbados, established a new regional body to enhance transparency and help fight corruption. The formation of the Association of Integrity Commissions and Anti-Corruption Bodies in the Commonwealth Caribbean was heralded as a major step forward in regional efforts to support integrity and address corruption. It is hoped that the new body will help further strengthen public confidence in cross-border initiatives to enhance accountability, knowledge sharing and coordination.

Resources to Report Corruption

Financial Intelligence Unit
P.O. Box 1372, Bridgetown
246-436-4734
fiu@barbadosfiu.gov.bb

Anti-Money Laundering Authority
P.O. Box 1372, Bridgetown
246-436-4734
amla@sunbeach.net

Barbados does not have a recent history of politically motivated violence or civil unrest.

Barbados’ labor force was approximately 147,200 people at the end of September 2016. The total average unemployment rate toward the end of September 2016 was approximately 10.2%.

Labor regulations in Barbados are guided by a framework of laws and accepted best practices. These include the Holidays with Pay Act, the Sick Leave Act, the Public Holidays Act, the Protection of Wages Act, maternity leave, national insurance (social security) contributions, unemployment benefits, and severance pay. The eight core conventions of the International Labor Organization are among the 36 ILO Conventions ratified by Barbados. The Government of Barbados upholds the ratified Conventions and is guided by other Conventions of the International Labor Organization.

Wages in Barbados are some of the highest in the Caribbean. Minimum wages are administratively established for only a few categories of workers, and enforced by law by the Ministry of Labor’s Labor Department. The minimum wage for shop assistants is USD $3.13 per hour. The Ministry of Labor recommended that companies recognize this as the de facto minimum wage, though most employees earn more than this.

The standard legal workweek is 40 hours in five days and the law requires overtime payment for hours worked in excess of this. The law prescribes that all overtime must be voluntary. Workers are guaranteed a minimum of fifteen business days of holiday with pay and are covered by unemployment benefits legislation and national insurance legislation.

Trade unions enjoy a strong voice in the labor and economic affairs of the country through their representation in Barbados’ Social Partnership, a tri-partite consultative mechanism. Approximately 36 percent of the labor force belongs to trade unions, but this small percentage belies the power and importance of unions in Barbados; all key sectors are unionized, with all private and public employees in agriculture, tourism, the airport and seaport belonging to a single union confederation.

The major unions recognize the advantages accruing to Barbados from foreign investment and foreign expertise and are generally flexible and accommodating in their dealings with employers. However, local labor leadership is sensitive when it perceives a lack of respect for Barbadian laws and customs by large, visible foreign employers. It is generally cooperative with management in unionized shops.

The law, including related regulations and statutes, provides for the right of workers to form and join unions and conduct legal strikes but does not specifically recognize the right to bargain collectively. Moreover, the law does not obligate companies to recognize unions or to accept collective bargaining, and no specific law prohibits antiunion discrimination or requires reinstatement of workers fired for union activity. A tribunal may order reinstatement, re-engagement, or compensation under the Employment Rights Act, although no cases of antiunion discrimination were reported during the year. All private-sector employees are permitted to strike, but the law prohibits workers in essential services, such as police, firefighters, and electricity and water company employees, from engaging in strikes. With a few exceptions, workers’ rights generally were respected. Unions received complaints of collective bargaining agreement violations, but most were resolved through established mechanisms.

In general the government effectively enforced the law in the formal sector, but there was no information as to the adequacy of resources or inspections. Penalties for violations include fines up to USD 500, imprisonment up to six months, or both. The penalties were sufficient to deter violations. The Employment Rights Act of 2013 grants the right to have allegations of unfair dismissal tried before the Employment Rights Tribunal.

The law provides for a minimum working age of 16 and this provision is generally observed. Compulsory primary and secondary education policies reinforced minimum age requirements. The Labor Department has a small cadre of labor inspectors who conduct spot investigations of enterprises and check records to verify compliance with the law. These inspectors may take legal action against an employer who is found to have underage workers.

Under the Severance Payments Act, an employer is obligated to pay an employee a severance payment where the employee is terminated on account of redundancy. However, the Employment Rights Act, section 31, provides that dismissal of an employee on account of redundancy does not contravene the right not to be unfairly dismissed. Qualifying workers who are laid-off for economic reasons are generally entitled to receive a severance payment on a graduating scale that starts at 2.5 weeks’ pay for every completed year of employment. All unemployed workers are eligible for unemployment benefits upon meeting the qualifying contribution periods established by the National Insurance and Social Security scheme.

The government introduced the Occupation Health at Work Act in 2013. This Act governs the general health and safety of workers in all workplaces except the armed forces and private household domestic service. The law requires firms employing more than 50 workers (fewer in certain sectors) to create a safety committee that may challenge the decisions of management concerning occupational safety and health environment. The Labor Department also enforces health and safety standards and follows up to ensure that management corrected problems cited. Trade union monitors can identify safety problems for government factory inspectors to ensure the enforcement of safety and health regulations and effective correction by management. The Labor Department’s Inspections Unit conducts routine annual inspections of government-operated corporations and manufacturing plants. Workers have the right to remove themselves from dangerous or hazardous job situations without jeopardizing their continued employment.

In 2016, the new Shops Act came into force in response to demands from shop keepers that they be allowed to expand their hours of operation to accommodate tourist needs. Under the law, designated shops can now remain open for business from 7 a.m. on Mondays, continuously through to 10 p.m. on Sundays. The closing hours are between 10 p.m. on Sundays and 7 a.m. on Mondays. The Act also removes general public holidays from being “closed days”, with the exception of Good Friday, Easter Sunday, Christmas Day and Independence Day. However, according to the Act, the Chief Labor Officer may grant permission, upon application, for the opening of shops on closed days.

The government announced in 2016 that the Income Tax Act and Income Tax Regulations (1969) will be amended to allow people to make withdrawals from their registered retirement plan annuity. However, the amount must not exceed 15% of the total value of the accumulated savings. A withholding tax of 16.5% of the amount withdrawn must be added to the eventual repayment.

The Government of Barbados has yet to begin debate on certain pending legislation, notably the Employment Sexual Harassment (Prevention) Act and the Employment (Prevention of Discrimination) Act.

The Overseas Private Investment Corporation (OPIC) provides financing and political risk insurance to viable private sector projects, helps U.S. businesses invest overseas, and fosters economic development in new and emerging markets. Barbados is a qualifying country for OPIC projects. There are currently no active OPIC project in Barbados.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

The Central Bank of Barbados provides statics relating to commercial banks, non-bank financial institutions, interest rates, securities, public finance, foreign trade, and balance of payments. This data is available at: http://data.centralbank.org.bb/ 

Data referenced from the Host country source, the Central Bank of Barbados are estimated figures.
Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available; data referenced from the Host country source, the Central Bank of Barbados are estimated figures.

Commercial and Economic Affairs, Political/Economic Section
U.S. Embassy to Barbados, the Eastern Caribbean and the
Organization of Eastern Caribbean States
246-227-4052
WatsonJM@state.gov