What is an International Business Company?
The International Business Companies Act is designed to attract and facilitate the wide range of business activities, allowing Barbados to become recognized as a modern and responsible international business centre for foreign and domestic investment.
An International Business Company (IBC) is a company that is licensed to carry on business in manufacturing, trade or commerce from within Barbados for customers residing outside of Barbados. An IBC may therefore manufacture, process or otherwise prepare products for export outside of Barbados or provide services to non-residents of Barbados. The IBC legislation encourages local and non-resident participation in diverse activities including financing, investment management, futures trading, and information services among many others.
The legislation stipulates that an IBC:
- Must be financially capable of carrying out the business
- May not carry on business under any other offshore incentive legislation
- Must not carry on a trade in buying or selling goods and services in Barbados
Why Establish an IBC in Barbados?
- Tax rate of 2.5% - 0.25% depending on the level of profits of the IBC
- Foreign tax credit can be taken in respect of taxes paid outside of Barbados, provided that the election to take the credit does not reduce the tax payable in Barbados to less than 0.25% of taxable income
- No withholding tax on dividends, interest and other payments made to non-residents or to another IBC
- No capital gains tax nor estate duties
- Exemption from ad valorem stamp duty, except in respect of real estate situated in Barbados
- Exemption from taxes and duties on plant, machinery, raw materials, goods and other articles imported into Barbados for use in the IBC's business
- Exemption from exchange control
- Guarantee of benefits and exemptions for a period of 15 years
- Tax concessions for specially qualified employees
- Exemption from taxes on the transfer of any securities or assets of the IBC, other than the transfer of real property situated in Barbados
Establishing an IBC
A company must first be incorporated or registered in Barbados under the Companies Act. An application for an IBC licence may be made immediately after incorporation or registration of the company, after which the company may commence business in Barbados. The application for an IBC licence must include a brief description of the intended business of the company, the name and address of the proposed shareholders and the percentage of shares to be held. Certain other due diligence information must also be supplied with the application. The application fee is US$125.
- An IBC licence must be renewed annually on or before December 31.
- The annual licence fee is US$500.
- There is an audit requirement where the gross assets and revenues of the company exceed the statutory threshold of US$2,000,000.
- Financial statements are to be filed with the renewal application.
- An annual return must be filed by January 31 each year.
Click here for a copy of the International Business Companies Regulations.
Application and Annual Forms for IBC licences are available here.