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
Substance Requirements
Resident companies engaged in insurance and shipping business are required to satisfy an economic substance test. The test involves an assessment related to the following:
- The extent to which the company is being directed, managed and controlled in Barbados (i.e., no. of board meetings and quorum of directors physically present in Barbados, knowledge and expertise of board members)
- Level of relevant activity (no. of employees, expenditure, physical assets in country)
- Confirmation of the core income generating activities.
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.