Investment Incentives
Let’s dig a little deeper. Here are some of the specific incentives that make Barbados the right choice for your business or investment.
• Foreign Currency Permit: Entities that earn 100% of their income in foreign currency, are entitled to receive a Foreign Currency Permit (FCP). Holders of a FCP benefit from exemption from exchange control, and exemption from property transfer taxes on transfers of shares or quotas.
• Duty free concessions: Some industries such as manufacturing, renewable energy and tourism have specific duty free concessions on imports, tax exemptions, training grants and more.
• Tax losses: Tax losses brought forward and available for offset are restricted to 50% of taxable income in any income year.
• Foreign tax credits: Tax paid to a foreign country may be credited against tax payable in Barbados, provided that the credit does not reduce the tax payable in Barbados to a rate of less than 1% of the tax payable in that income year.
• Double Taxation Agreements: These agreements offer reduced withholding tax ranging from 0-15%. Barbados has an expanding treaty network with 40 Double Taxation Agreements with countries including Canada, China, Cuba, Mexico, the UK and the USA.
Attracting Businesses of Substance
Economic substance is a G20/OECD global initiative that requires companies to demonstrate that the profits they register are commensurate with their economic presence and activities in the jurisdiction in which they reside. The Companies (Economic Substance) Act 2019-43 took effect on November 29, 2019, requiring companies to satisfy the economic substance test in relation to any relevant activity carried on in Barbados by the company. An entity whose business is directed, managed and controlled from Barbados is defined as a “Resident Company” and must satisfy the economic substance test.
More details on The Companies (Economic Substance) Act 2019-43 are available on the Invest Barbados website.
• Competitive tax rates: Barbados’ general corporation tax rate is 9% effective January 1, 2024.
Full details are available on the Invest Barbados website.