2019 Investment Climate Statements: Barbados

Policies Towards Foreign Direct Investment

The government of Barbados, through Invest Barbados, welcomes foreign direct investment with the stated goals of creating jobs, earning foreign exchange, transferring technology, enhancing skills, and contributing to economic growth.

Barbados encourages investment in the following key sectors: international financial services, tourism, information technology, education, health, cultural services, agro-processing, medical schools, and renewable energy, as well as newer areas like financial technology.  In the international financial services sector, the government maintains its regulatory oversight to prevent money laundering and tax evasion.

Through Invest Barbados, the government facilitates domestic and foreign private investment. Invest Barbados’ mandate is to actively promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors.  Invest Barbados also provides customized support for investors to ensure the expansion and sustainability of the initial investment.

Limits on Foreign Control and 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 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 government license.  There are no quotas or other restrictions on foreign ownership of a local enterprise or participation in a joint venture.

Other Investment Policy Reviews

Barbados has not conducted a trade policy review in the last three years.

Business Facilitation

Invest Barbados is the main investment promotion agency attracting and facilitating foreign investment.  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 offers 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 is available at http://www.investbarbados.org  .  Steps to establish a business vary based on the type of business a foreign investor wishes to set up.  Potential investors should contact Invest Barbados for guidance.

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). Information is available at www.caipo.gov.bb.

Barbados ranks at 101 of 190 countries in the indicator of the ease of starting a business, which takes eight procedures and approximately 15 days to complete, according to the 2019 World Bank Doing Business Report.  The general practice is to retain an attorney to prepare relevant incorporation documents. A business must register with the CAIPO, the Barbados Revenue Authority (BRA), the Customs and Excise Department, and the National Insurance Scheme (NIS).

The government of Barbados continues to facilitate programs and partnerships to assist women entrepreneurs and people with disabilities.  The government of Barbados remains committed to working with civil society and other organizations to meet the UN Sustainable Development Goals by 2030.

Outward Investment

While no incentives are offered, Barbados generally encourages local companies to invest in other countries, particularly within the region.  Local companies in Barbados are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the Caribbean Community (CARICOM) and the Caribbean Single Market and Economy (CSME).  The Barbados Investment Development Corporation (BIDC) provides market development support for domestic companies seeking to enhance their export potential.

Barbados does not have a bilateral investment treaty with the United States, but does have a double taxation treaty and a tax information exchange agreement.  Barbados has bilateral investment treaties with Canada, China, Cuba, Germany, Italy, Mauritius, Switzerland, the United Kingdom, and Venezuela. In addition to the United States, Barbados also has tax information exchange agreements with Denmark, the Faroe Islands, Greenland, and South Africa.  Bilateral investment treaties with Belgium/Luxembourg and Ghana are awaiting ratification. Barbados has a vast double taxation agreement network of 40 countries including Spain, Italy, the United Kingdom, Bahrain, Qatar, the United Arab Emirates, Singapore, China, Austria, Iceland, San Marino, Mexico, Panama, and Canada, with others awaiting ratification or signature.  Additional information is available from Invest Barbados. Barbados is also party to the following:

Caribbean Community (CARICOM)

The Treaty of Chaguaramas established the CARICOM in 1973.  Its purpose is to promote economic integration among its 15 member states.  Investors operating in Barbados have preferential access to the entire CARICOM market.  The Revised Treaty of Chaguaramas (RTC) establishes the CSME, which permits the free movement of goods, capital, and labor among CARICOM states.  CARICOM has bilateral agreements with Cuba, Colombia, Costa Rica, the Dominican Republic, and Venezuela. In 2013, CARICOM entered into a Trade and Investment Framework Agreement with the United States.

Economic Partnership Agreement (EPA)

The Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) and the European Community signed an EPA in 2008.  The overarching objectives of the EPA are to alleviate poverty, promote regional integration and economic cooperation, and foster the gradual integration of the CARIFORUM states into the world economy by improving 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 the protection of personal data.

Caribbean Basin Initiative (CBI)

The trade programs known collectively as the CBI facilitate the economic development and export diversification of the Caribbean Basin economies.  The CBI promotes economic development through private sector initiatives in Central America and the Caribbean by expanding foreign and domestic investment in non-traditional sectors, diversifying CBI country economies, and expanding their exports.  The CBI provides beneficiary countries with duty-free access to the U.S. market for most goods. It permits duty-free entry of products manufactured or assembled in Barbados into the United States.

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 Invest Barbados provide oversight aimed at ensuring the attraction and channeling of investment occurs transparently.

Rulemaking and regulatory authority rest with the bicameral parliament of the government of Barbados.  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 a series of laws and their implementing regulations.  These laws and regulations are developed with the participation of relevant ministries, 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 – CBB
• Insurance and non-banking financial services – Financial Services Commission (FSC)
• International business – International Business Unit, Ministry of International Business
• Business incorporation and intellectual property – 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 dissemination of information such as government office directories and press releases. The Government Information Service (BGIS) 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 streams House sittings.  The government budget is also available on this website, 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, and 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 and 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. The Corporate and Trust Service Providers Act regulates Barbadian financial service providers.  Failure to adhere to these laws and regulations may result in revocation of the business license and/or cancellation of work permit(s). The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Barbados to be largely compliant.

The Office of the Ombudsman is established by the constitution to guard against abuses of power by government officers in the performance of their duties.  The Office of the Ombudsman aims to provide quality service in an impartial and expeditious manner when 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, government 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.

International Regulatory Considerations

The OECD recognized Barbados as largely compliant with international regulatory standards.   Barbados is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the Multilateral Competent Authority Agreement, and the Multilateral Convention to Implement Tax Treaty Related Matters to Prevent Base Erosion and Profit Shifting.

The Barbados National Standards Institution (BNSI) was established in 1973 as a joint venture between the government of Barbados and the private sector.  It oversees a laboratory complex housing metrology, textile, engineering, and chemistry/microbiology laboratories. The primary functions of the BNSI 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 Standards Act (2006) and the Weights and Measures Act (1977) and Regulations (1985) govern the work of the BNSI. As a signatory to the World Trade Organization (WTO) Agreement on the Technical Barriers to Trade, Barbados, through the BNSI, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Barbados ratified the WTO Trade Facilitation Agreement (TFA) in 2018.  With full implementation, the Agreement improves the speed and efficiency of border procedures, facilitates trade costs reduction, and enhances participation in the global value chain.  Barbados has implemented the Automated System for Customs Data (ASYCUDA).

Legal System and Judicial Independence

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

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the RTC. In 2005, Barbados became a full member of the CCJ, making the body its final court of appeal and original jurisdiction of the RTC.

The United States and Barbados are both parties to the 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 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), and the Companies Act.  There is also a framework of legislation that supports the jurisdiction as a global hub for business including insurance, ships’ registration, and wealth management.

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

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

Competition and Anti-Trust Laws

Chapter 8 of the RTC outlines the competition policy applicable to 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 (CCC) applies the rules of competition. 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 Barbados Fair Trading Commission (FTC) in 2001. The FTC is responsible for the promotion and maintenance of fair competition and participates in the CCC. The FTC regulates the principles, rates, and standards of service for public utilities and other regulated service providers. The Telecommunications Act regulates competition in the telecommunications field.

Expropriation and Compensation

The Barbados constitution and the Companies Act (Chap. 308) contain provisions permitting the government to acquire property for public use upon prompt payment of compensation at fair market value.  U.S. Embassy Bridgetown is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in Barbados.

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.  Individual agreements between Barbados and multilateral lending agencies also 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) provide 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.

Barbados ranks 170 out of 190 countries in enforcing contracts according to the 2019 World Bank Doing Business Report.  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.  Through the Arbitration Act of 1976, local courts recognize and enforce foreign arbitral awards issued against the government. Barbados does not have recent cases 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.  Local courts 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 provides for the insolvency and/or liquidation of a company incorporated under this Act. Barbados was ranked 34 out of 190 countries in resolving insolvency in the 2019 World Bank Doing Business Report.

Investment Incentives

In January 2019, Barbados repealed its Fiscal Incentives Act, bringing the country into conformity with its obligations under the WTO and in particular the Agreement on Subsidies and Countervailing Measures (SCM Agreement).  Manufacturers may still benefit from some concessions. For further information, please contact Invest Barbados.

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

Enterprises 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 percent applies if more than 81 percent 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 percent of what the company spends in developing export markets outside CARICOM.

Initial allowances or investment allowances of up to 40 percent on capital expenditure are available for businesses making capital expenditures on machinery and plants or on an industrial building or structure.  The government also allows annual depreciation allowances on such expenditures.

In the tourism sector, the government’s market development allowance permits a company to deduct an additional 50 percent of what it spends to encourage 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 percent of interest. These entities are also exempt from import duties and environmental levies on furniture, fixtures and equipment, building materials, supplies, and equity financing.  The Act expands the definition of tourist sector beyond accommodation to include 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.

In response to concerns by the OECD and the European Union’s Tax Code of Conduct Group, the government of Barbados has reformed its international business sector regime by harmonizing the legislative and tax frameworks for domestic and international companies.   Companies conducting international business may operate with a tax rate from 1 to 5.50 percent. Companies exporting 100 percent of their services or products are able to apply for a foreign currency permit, affording them similar benefits previously enjoyed by international business companies and international societies with restricted responsibility.  For fiscal years commencing on or after January 1, 2019, all corporate entities will be taxed on the sliding scale shown:

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

Foreign Trade Zones/Free Ports/Trade Facilitation

There are currently no foreign trade zones or free ports in Barbados.

Performance and Data Localization Requirements

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.

Barbados does not require 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, including all managerial and technical staff, (but not nationals of CARICOM member states) seeking to work in Barbados must apply for work permits.  The work permit is specific to the job and employer and the permit may be granted for a period of up to five years. Short-term permits of up to six months are also available.  To grant a work permit, the government requires 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 government may restrict the number of permits approved depending on the number of people employed by the local company.  There are no restrictions regarding foreign directors of boards. More information is available at: 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 (for example, backdoors into hardware and software turn over keys for encryption).

As a member of the WTO, Barbados is party to the Agreement to the Trade Related Investment Measures.  The government strongly encourages investments that will create jobs and increase exports and foreign exchange earnings.  Barbados does not require participation by nationals or by the government in foreign investment projects. Barbados encourages local sourcing, but does not require enterprises to purchase a fixed percentage of goods from local sources.  Foreign investors receive the same treatment as Barbadians.

Real Property

There are no restrictions on foreign ownership of property in Barbados.  Foreign investors and locals are treated equally with regard to property taxes.  Civil law protects physical property and mortgage claims. The CBB must verify real property purchases for non-residents.  If a non-resident uses foreign funds and pays for the property in Barbados, the CBB will normally endorse the transaction. The sale of property is subject to a 2.5 percent Property Transfer Tax in addition to a 1 percent 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 percent on the improved value of the property.  Holders of a certificate from the Barbados Tourism Authority enjoy rebate of 50 percent for hotels and 25 percent for villas. The Commissioner of Land Tax charges an annual fee based on the assessed property value on residential property as follows:

• 0 percent on the first $75,000
• 0.10 percent on amounts between $75,001 and $225,000
• 0.70 percent on amounts between $225,000 and $425,000
• 1 percent on excess of $425,000
• 0.8 percent on vacant land under 4,000 sq. ft.
• 1.0 percent on vacant land over 4,000 sq. ft.

Barbados ranks 129 of 190 countries in ease of registering property in the 2019 World Bank Doing Business Report.  It takes approximately 105 days to complete six procedures and the cost is about 4 percent of the property value.

Intellectual Property Rights

Barbados has a good legislative framework governing intellectual property, but enforcement needs improvement.  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, Barbados also approved legislation covering integrated circuits topography, geographical indications, and protection against unfair competition.  In addition, Barbados revised its Trademark and Industrial Designs Acts to meet international standards.

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the CSME commits all 15 members to implement stronger intellectual property protection and enforcement.  The EPA signed between the CARIFORUM states and the European Community contains the most detailed obligations regarding 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).”

Barbados was listed on the Office of the United States Trade Representative’s (USTR) Special 301 Report Watch List in 2019.  USTR cited an absence of commitment to enforcement of existing legislation. The country’s failure to accede to the WIPO Internet Treaties to protect works in both physical and online environments was also a factor in Barbados’ listing. USTR also cited 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, ineffective enforcement, and lack of reform also contributed to its inclusion on the Watch List.

It is the responsibility of the importer to pay for and destroy counterfeit goods.  Failure to observe certain 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 them 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.  Historically, the CBB independently raised or lowered interest rates without government intervention. There are a variety of credit instruments in the commercial and public sectors that local and foreign investors may access.

Barbados continues to review legislation in the financial sector to strengthen and improve the regulatory regime and attract and facilitate retention of foreign portfolio investments.  The government continues to improve its legal, regulatory, and supervisory frameworks to strengthen the banking system. The Anti-Money Laundering Authority and its operating arm, the government’s Financial Intelligence Unit, review anti-money laundering policy documents and analyze prudential returns.

The Securities Exchange Act of 1982 established the Securities Exchange of Barbados, which was reincorporated as the Barbados Stock Exchange (BSE) in 2001.  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 have assets of not less than $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 another 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 $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 CBB to trade securities on the BSE.

The BSE publicized its intent to fully immobilize traditional share certificates and to computerize clearance and settlement through the Barbados Central Securities Depository Inc., a wholly owned subsidiary of the BSE.  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.

The BSE adheres to rules in accordance with International Organization of Securities Commissions guidelines designed to protect investors, ensure a fair, efficient, and transparent market, and reduce systemic risk.  Public companies must file audited financial statements with the BSE no later than 90 days after the close of their financial year. The authorities may impose a fine not exceeding $5,000 for any person under the jurisdiction of the BSE who contravenes or is not in compliance with any regulatory requirements.

The BSE launched the International Securities Market (ISM) in 2016.  It is designed to operate as a separate market, allowing issuers from Barbados and other international markets.  The ISM is founded on a strong regulatory framework. To date, the ISM has five listing sponsors.

The BSE collaborates with its regional partners, the Jamaica Stock Exchange and the Trinidad and Tobago Stock Exchange, through shared trading software.  The capacity for this inter-exchange connectivity provides a wealth of potential investment opportunities for local and regional investors. The BSE obtained designated recognized stock exchange status from the UK in 2019.

Barbados has 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 government established the Central Bank of Barbados in 1972. The CBB manages Barbados’ currency and regulates its domestic banks.

The Barbados Deposit Insurance Corporation (BDIC) provides protection for depositors.  Oversight of the entire financial system is conducted by the Financial Oversight Management Committee, which consists of the CBB, the BDIC, and the FSC.  The private sector has access to financing on the local market through short-term borrowing and credit, asset-financing, project financing, and mortgage financing.

Commercial banks and other deposit-taking institutions set their own interest rates.  The CBB requires banks to hold 17.5 per cent of their domestic deposits in stipulated securities.

Bitt, a Barbadian company, introduced a blockchain-based electronic mobile wallet for consumers.  Advocates of the technology praise this digital e-commerce solution for being less expensive to use and more secure and traceable than cash.  Bitt offers a digital asset exchange, remittance channel, and merchant-processing gateway available via a mobile application. The CBB and the FSC established a Regulatory Sandbox in 2018 where financial technology entities can do live testing of their products and services.  This allows regulators to gain a better understanding of the product or service and to determine what, if any, regulation is necessary to protect consumers.

International banks domiciled in the United States, Canada and Europe are reviewing their correspondent banking relationships in regions they deem high-risk for financial services.  The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S. and European banks. CARICOM remains committed to engaging with key stakeholders on the issue.

Foreign Exchange and Remittances

Foreign Exchange

Barbados’ currency of exchange is the Barbadian dollar (BBD).  It is issued by the CBB. Barbados’ foreign exchange operates under a liberal system.  The Barbadian dollar has been pegged to the United States dollar at a rate of BBD 2.00: USD 1.00 since 1975.  This creates 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 CBB at the time of investment.  The CBB has the right to stagger these conversions depending on the level of international reserves available to the CBB 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 CBB executes foreign exchange policy under the Exchange Control Act.  Individuals may apply through a local bank to convert the equivalent of $10,000 per year (effective July 1, 2019) for personal travel and up to a maximum of $25,000 for business travel. The CBB must approve conversion of any amount over these limits.  International businesses, including insurance companies, are exempt from these exchange control regulations.

Barbados is a member of the CFATF.  In 2014, the government of Barbados signed an Intergovernmental Agreement in observance of FATCA, making it mandatory for banks in Barbados to report the banking information of U.S. citizens.

Sovereign Wealth Funds

The CBB 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 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 their senior management reports.

As part of the ongoing Barbados Economic Recovery and Transformation Program, the government of Barbados is addressing the expenditure position of the SOEs by defining clear objectives for SOE reform, reducing the wage bill of these entities, and implementing other necessary reform measures.

Privatization Program

Barbados does not have a targeted privatization program.

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 volunteer and make monetary or in-kind donations to local causes.

The non-governmental organization (NGO) community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental, and community projects.  The government at times partners with NGOs and encourages philanthropy.

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. 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.  The Integrity in Public Life Bill 2018 is pending in parliament. This Bill seeks to establish an integrity commission, to promote the integrity of government officials, and strengthen measures for the prevention, detection, investigation, and prosecution of acts of corruption.

Barbados is a member of the regional Association of Integrity Commissions and Anti-Corruption Bodies in the Commonwealth Caribbean.

Resources to Report Corruption

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

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

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

Barbados’ labor force was approximately 144,300 people at the end of September 2018.  The total average unemployment rate at the end of September 2017 was approximately 10.7  percent.

Labor regulations in Barbados are guided by a framework of laws including the Holidays with Pay Act, the Sick Leave Act, the Public Holidays Act, and the Protection of Wages Act, as well as policies regarding maternity leave, national insurance (social security) contributions, unemployment benefits, and severance pay.  Barbados has ratified the eight core conventions of the International Labor Organization (ILO). Barbados upholds the ratified conventions and is guided by the ILO’s other conventions.

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 the Ministry of Labor’s Labor Department.  The minimum wage for shop assistants is $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 after one year of employment with their employer 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 tripartite consultative mechanism. Approximately 36  percent of the labor force belongs to trade unions, but despite this small percentage, unions in Barbados are influential. 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.  The law does not obligate companies to recognize unions or to accept collective bargaining, and no specific law prohibits anti-union discrimination or requires reinstatement of workers fired for union activity.  A tribunal may order reinstatement, re-engagement, or compensation under the Employment Rights Act. 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 were generally respected. Unions received complaints of collective bargaining agreement violations, but most were resolved through established mechanisms.

In general, Barbados effectively enforced the law in the formal sector, but, according to many companies, there is no information as to the adequacy of resources or inspections.  Penalties for violations include fines up to $500, imprisonment up to six months, or both. 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 Occupational Health at Work 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.  The Labor Department also enforces health and safety standards and follows up to ensure that management corrects problems. Trade union monitors can identify safety problems for government factory inspectors.  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.

The Shops Act of 2016 expanded permitted opening hours for retail businesses and removed mandatory closure requirements on most public holidays.

The government allows people to make withdrawals from their registered retirement plan annuities.  The amount withdrawn must not exceed 15 percent of the total value of the accumulated savings. The government adds a withholding tax of 16.5  percent of the amount withdrawn to the eventual repayment.

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 projects in Barbados.

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

* Source for Host Country Data: Central Bank of Barbados (CBB) hhttp://data.centralbank.org.bb/GeneralStatistics.aspx   . All CBB GDP figures for 2018 are estimates.

Table 3: Sources and Destination of FDI

Data not available; Barbados does not appear in the IMF’s Coordinated Direct Investment Survey.

Table 4: Sources of Portfolio Investment

Data not available; Barbados does not appear in the IMF’s Coordinated Portfolio Investment Survey for Sources of Portfolio Investment.

U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States
246-227-4000
Email: BridgetownPolEcon@state.gov