Investment Incentives
Let’s dig a little deeper. Here are some of the specific incentives that make Barbados the right choice for you, 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 an FCP benefit from exemption from exchange control, and once engaged exclusively in the trade of services, machinery, equipment, appliances, fixtures, raw materials etc. are exempted from certain taxes and duties.
• 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.
• 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.
Following Barbados’ adoption of the global minimum tax, and increase in corporate tax rate to 9%, the Government repealed the stand-alone Companies (Economic Substance) Act, 2019-43, effective 1 January 2025, since this law is no longer considered necessary. The relevant substance requirements are now incorporated into the Income Tax Act through the Income Tax (Amendment) Act, 2025. This reform reflects Barbados’ ongoing commitment to simplifying compliance while maintaining its credibility and alignment with international tax standards.
The Income Tax (Amendment) Act, 2025 is available on the Invest Barbados website.
• Competitive tax rates: The general tax rate is 9% with lower rates for specific sectors: 5.5% for approved small business; 0%-2% for insurance, depending on class entity; 4.5% on income derived from intellectual property in Barbados.
Full details are available on the Invest Barbados website.