Financial Services

• International Insurance Companies
  


• International Banks
  


• Trusts
  


• Mutual Funds
  

International Insurance Companies

• Exempt Insurance Companies (EICs) and Qualifying Insurance Companies (QICs) can be used to insure risks originating outside of Barbados with the latter also being able to insure a certain amount of local risk
  


• EICs as well as registered holding or management companies are exempt from income tax for 15 years, and thereafter are subject to tax of 2% on the first US$125,000 of profits and zero on the balance
  


• QICs may be taxed as low as 1.75% after deducation of a foreign currency earnings allowance
  


• Insurance businesses whose Articles of Incorporation so permit, may establish one or more separate accounts in respect of a Contract Liability
  


• Competitive cost structure for operating international insurance companies
  


• Multiple GAAP accounting environment
  

International Banks

• May engage in banking business with non-residents only
  


• Must have at least one director who is a resident citizen of Barbados
  


• Taxed on profits on a sliding scale, from a maximum of 2.5% to a minimum of 1%
  


• Taxes paid in a foreign country may be credited against tax payable in Barbados, provided that the credit does not reduce the tax payable in Barbados to less than 1% of taxable income
  


• Exemption from customs duties on imports of goods essential for doing business in Barbados
  


• Tax concessions for specially qualified non-residents whose services are required for the business
  

Trusts

• Trustee must be licensed under the International Financial Services Act 2002
  


• Settlor and beneficiaries must be non-residents
  


• Assets must consist of only foreign currency or securities
  


• Exempt from all Barbados taxes
  

• Trust deed must specify that the International Trusts Act (ITA) applies
  


• At least one trustee must be a resident of Barbados
  


• The settlor and the beneficiaries must be non-residents of Barbados
  


• The assets of the trust cannot include Barbados real estate
  


• Perpetuity period of 100 years
  


• Fraudulent disposition provisions in the ITA protect the rights of existing creditors and certain deferred future creditors
  


• Non-charitable purpose trusts permitted under the ITA
  


• May only incur tax on income earned in, or remitted to, Barbados

Mutual Funds

• Under the Mutual Funds Act 2002, persons must be licensed by the Securities Commission in order to carry on mutual funds business in or from Barbados
  


• Exempt mutual funds, or mutual funds that are licensed in a foreign jurisdiction approved by the Minister, can conduct business in Barbados if they have appointed an agent in Barbados and have been granted a licence by the Securities Commission
  


• Transactions concerning the acquisition or transfer of shares in mutual funds are exempt from stamp duty and property transfer tax


• Pursuant to the Income Tax Act 2003, amounts invested by an individual in mutual funds not exceeding $10 000 can be deducted from assessable income for tax purposes

Segregated Cell Companies

• Under the Companies Act, a company carrying on financial services activity including insurance, banking and mutual funds can operate as a segregated cell company
  


• This corporate structure allows risks and rewards relating to the businesses of different investors to be kept separately.