By Paul Jenkins, Private Wealth Investment Adviser, CIBC First Caribbean
When selecting a domicile specialising in banking and wealth management, significant global competition requires that jurisdictions to be considered must have global credibility and maximum flexibility, and Barbados ranks high in both areas.
Barbados has become the 101st jurisdiction to join the Base Erosion and Profit Shifting (BEPS) inclusive framework. This framework was established in January 2016, when G20 leaders urgently requested the implementation of structures and policies to address tax avoidance strategies that exploit gaps and mismatches in tax rules, in order to artificially shift profits to low or tax-free jurisdictions. Under this framework, over 100 jurisdictions are now collaborating to implement measures to address BEPS.
Barbados has long held a highly respected reputation in international tax matters. The jurisdiction joined the Global Forum on Transparency and Exchange of Information for Tax Purposes in September 2009, and received a compliance rating in 2016. Further, Barbados ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in late 2016 and, in the previous year, signed the Multilateral Competent Authority Agreement that enables full commitment and compliance to the automatic exchange of financial account information.
Consequently, Barbados, an independent nation, continues to be globally recognised as a compliant and well-regulated jurisdiction in which to establish banking and wealth management structures and operations.
Barbados is truly an international banking centre, where individuals have access to personal and non-personal accounts, as well as personal and non-personal term deposits, in Canadian, US and other major currencies. Online banking and credit cards are available for select clients and access to facilities such as wire transfers, drafts and foreign exchange can be accommodated.
Many clients make further enquiries about money market instruments, such as treasury bills and commercial paper. Barbados can offer these securities via regulated financial companies.
Credit and access to capital has been an increasingly popular request, as savvy investors look to strategies that utilise the intelligent use of debt – specifically, the ability to leverage assets in terms of accessing credit, without diluting or selling current portfolio holdings.
London Interbank Offered Rate (LIBOR) and fixed-rate based loans can be accessed through many Canadian and regional banks. The availability of real estate financing in US dollars or GB pounds attracts international citizens looking to relocate or purchase a second home. Credit solutions for trusts have been an increasingly frequent request to service providers, evidencing a mature and respected banking and trust sector.
International investment solutions can be accessed from Barbados and a plethora of firms offer wealth management solutions.
Institutional and individual investors have access to discretionary investment management or wealth management services offered on an advisory basis. The full service model includes the following investments solutions:
o Access to global equities
o Access to global fixed income investments (bonds)
o Ability to make investments in emerging markets’ fixed income/bonds
o Multi-currency offerings for money market/cash equivalents
o Alternative investment programmes via Canadian and regional banking institutions
o Foreign exchange trading
o Ability to invest in international/offshore mutual funds
o Access to some of the world’s best money managers, through select and discrete wealth management experts
o Customised structured products
o Access to precious metals certificates backed by global organisations
International custody can be arranged for select clientele, as Barbados has a host of financial firms that utilise their global capacities as asset managers to offer local solutions, which include custody of financial assets and hedge fund foreign exchange alternatives that can hedge against select systematic or market risks.
Trust and fiduciary services can also be delivered from Barbados. Banking and wealth management operations usually have teams that can structure and administer a range of trusts to meet client needs. International companies often work in combination with one or more trusts. Such trusts, be they complex or simple, discretionary or non-discretionary, can be customised to meet client objectives in the distribution of assets, succession planning or in protecting assets for future generations.
To summarise, Barbados has taken steps towards meeting the requirements of international tax transparency and global standards, working with several other regulated nations and jurisdictions. In addition and in concert, Barbados has also highlighted its capabilities in wealth management and banking, enabling it to offer a globally competitive suite of services.
Financially speaking … what you can do in New York, London, Singapore and Toronto … you can complete right here in Barbados … why would you want to be anywhere else?