The Fiscal Incentives Act and Approval Process

The Fiscal Incentives Act provides various tax and customs duty exemptions to corporations involved in manufacturing activities which qualify for these concessions.

The steps involved in securing Approved Enterprise Status are summarized below:-

1. Submit an application on the prescribed form to the Minister responsible for Industry with a copy to the Chief Executive Officer – Barbados Investment and Development Corporation (BIDC).

2. After receiving the application, the Government will advertise in Barbados that the Minister is being asked to grant Approved Enterprise Status to a company to manufacture a specific product.

3. The application should be supported by a recent plan (including a market and environmental survey) together with projected income and expenditure statements for the first three years.

4. The application is processed by the BIDC and a recommendation made to the Minister with particular emphasis being placed on the following:

a) Availability of adequate financing

b) Existence of an accessible market for the company's products

c) That the company has access to the necessary technical expertise

d) Likely foreign exchange earnings

e) Anticipated employment generation

f) Likely impact on existing industries

g) Overall benefit to Barbados

5. If all necessary information is submitted with the application form, the evaluation process is completed quickly and the new Approved Enterprise can be operational within approximately eight weeks.

Approved enterprises are classified as Group I, II, or III enterprises, depending on the local value added or as Enclave Enterprises or Highly Capital Intensive Industries. The classification granted determines the maximum length of the tax holiday which is as follows:

Group I: Local value added of at least 50%

Group II: Local value added of between 25% and 50%

Group III:  Local value added of between 10% and 25%

An Enclave Enterprise is an approved enterprise that manufactures exclusively for export outside of CARICOM.

A Highly Capital Intensive Industry is one with a capital investment of at least US$25 million.

The maximum period of the tax holiday, which begins from the date of the manufacture of the approved product, is determined by the classification of the enterprise and is as follows:-

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