Doing Business with Barbados

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Doing Business with Barbados

  1. 1. DOING BUSINESS WITH BARBADOS May 2007Caribbean Export Development Agency (Caribbean Export) P. O. Box 34B, Brittons Hill St. Michael Barbados Tel: (246) 436-0578 Fax: (246) 436-9999 E-mail: info@carib-export.com Website: www.carib-export.com
  2. 2. DOING BUSINESS WITH BARBADOS DOING BUSINESS WITH BARBADOS TABLE OF CONTENTS1. GENERAL INFORMATION..................................................................................... 32. THE ECONOMY........................................................................................................ 5 2.1 Structure of the Economy ................................................................................... 5 2.2 Recent Economic Performance........................................................................... 5 2.3 Balance of payments ........................................................................................... 6 2.4 Overview of Trade .............................................................................................. 6 2.5 Barbados’ Trade with CARICOM ...................................................................... 73. GENERAL MARKETING FACTORS...................................................................... 8 3.1 Distribution and Sales Channels ......................................................................... 8 3.2 Transportation ..................................................................................................... 8 3.3 Use of Agents/Distributors ................................................................................. 8 3.4 Franchising.......................................................................................................... 8 3.5 Advertising / Trade Promotion ........................................................................... 8 3.6 Joint Ventures / Licensing .................................................................................. 9 3.7 Selling Factors / Techniques............................................................................... 94. MARKET ACCESS CONDITIONS ........................................................................ 10 4.1 Customs Tariffs................................................................................................. 10 4.2 Free Trade Agreements..................................................................................... 11 4.3 Non-Tariff Barriers ........................................................................................... 11 4.4 Prohibited and Restricted Imports .................................................................... 12 4.5 Import Documentation ...................................................................................... 12 4.6 Labelling and Marking Requirements .............................................................. 12 4.7 Sanitary and Phytosanitary (SPS) Measures..................................................... 12 4.8 Standards........................................................................................................... 12 4.9 Product Certification......................................................................................... 135. INVESTMENT PROFILE........................................................................................ 14 5.1 Investment Incentives Schemes ........................................................................ 14 5.2 Foreign Investment Regime .............................................................................. 14 5.3 Free Trade Zones .............................................................................................. 156. ESTABLISHMENT OF BUSINESSES ................................................................... 16 6.1 Right to Private Ownership............................................................................... 16 6.2 Establishing an Office....................................................................................... 16 6.3 Work Permit Requirements............................................................................... 17 6.4 Intellectual Property Rights .............................................................................. 17 6.5 Conversion and Transfer Policies ..................................................................... 187 CULTURAL PRACTICES....................................................................................... 19 7.1 Business Customs ............................................................................................. 19 7.2 Entry/Exit Requirements:.................................................................................. 19 2
  3. 3. DOING BUSINESS WITH BARBADOS1. GENERAL INFORMATIONOfficial Name: Barbados Principal Cities and Population: (2005 est.)Capital: Bridgetown Bridgetown, 89,840 Holetown, 20,771Area: 431 sq km Airports: The island of BarbadosPopulation: 280,946 (July 2007 est.) has a single major airport, the Sir Grantley Adams International Airport. ItPopulation growth index: 0.369% receives daily flights by several major(2007 est.) airlines from points around the globe, as well as several smaller regionalPopulation density: 651 per square commercial airlines and charters. Thekilometer airport serves as the main air- transportation hub for the EasternOfficial language: The countrys Caribbean. It is currently undergoing aofficial language is English, the local US$100 million upgrade and expansion.2dialect of which is referred to as Bajan,spoken by most. Ports: The Deep Water Harbour (a.k.a. the Port of Bridgetown), lies onCurrency: Barbadian dollar (BBD) the Western coast of the country, and handles all of the bulk ship-based tradeExchange rate: U.S. dollar = and commerce. BDS$ 2 Holidays:Climate: The climate of Barbados New Year’s Day Jan 01is typically tropical, the weather Errol Barrow Day Jan 21generally sunny and warm. Daytime Good Friday Apr 6temperatures in Barbados hover around Easter Monday Apr 924 to 29°C (75 to 85°F), the heat National Heroes Day Apr 28dampened slightly on occasion by Labour Day May 1northeast tradewinds. Although Whit Monday May 28Barbados is in the hurricane belt, the Emancipation Day Aug 1island is fortunate to be bypassed by Kadooment Day Aug 6most of the storms, but it is subject to the Independence Day Nov 30odd intense tropical rainstorm that is Christmas Day Dec 25usually short-lived. The dry season in Boxing Day Dec 26Barbados stretches from January toJune.1 Life Expectancy: Total Population - 73 years 1http://www.climateandweather.com/Climate/Cou 2ntries/Barbados http://en.wikipedia.org/wiki/Barbados 3
  4. 4. DOING BUSINESS WITH BARBADOSLiteracy Rate: problem with dengue fever, a mosquito-Total population - 99.7% borne viral illness.4Local Time: UTC-4 (1 hour ahead ofWashington, DC during Standard Time)Business Hours: Business hours aregenerally 8am to 5pm Monday to Friday.Telephone Codes: 246Health: There are no mandatoryrequirements regarding vaccinations forvisitors to Barbados, however a yellowfever vaccination certificate is requiredfrom travellers over one year of agecoming from infected areas, andHepatitis A vaccinations arerecommended for those aged over twoyears. There has been an increase in theoutbreaks of dengue fever and mosquitorepellent is strongly recommended.Medical care is good but very expensiveand serious cases are usually transferredoverseas (usually to the USA). Healthinsurance is therefore stronglyrecommended. Ambulances take hoursto respond and attendants may notadminister life-saving techniques enroute to hospital.3The main hospital is the 600-bed QueenElizabeth Hospital in Bridgetown, andthere are several well-equipped healthclinics distributed throughout the island.The medical community includesspecialists trained in the Caribbean, theUnited States, Canada, and Europe.Barbados is experiencing a growing 3 4http://www.wordtravels.com/Travelguide/Countr Doing Business in Barbados: Aies/Barbados/Basics Country Commercial Guide for U.S. Companies, 2006. 4
  5. 5. DOING BUSINESS WITH BARBADOS2. THE ECONOMY September 11 terrorist attacks and the global drop-off in tourism. Growth2.1 Structure of the Economy picked up again in 2004 and 2005, and the economy grew by 3.8 percent inHistorically, the Barbadian economy had 2006.been dependent on sugarcane cultivationand related activities, but production in Tourism drives the economy inrecent years has diversified into light Barbados, but offshore banking andindustry and tourism. The development financial services have become anof the "offshore" international business increasingly important source of foreignand financial services sector, which exchange and economic growth. Thebegan around 1977, now also contributes sugar industry, once dominant, nowto national income. makes up less than 1 percent of GDP and employs only around 500 people. TheOver the last two decades, the most labor force totaled 142,000 persons atdynamic sectors overall were tourism, the end of 2006. The average rate ofand transport and communications. unemployment during the last quarter ofNegative overall growth rates were 2006 was estimated at 7.6 percent. Therecorded for sugar production, while current account deficit expanded to 12.5GDP in manufacturing stagnated. In percent of GDP, and government debtterms of national expenditure, personal rose above 80 percent of GDP in 2006.and public consumption by far outpacedthe expansion of trade and that of capital Economic activity in Barbados wasstock. estimated to have grown by 3.4% in real terms during 2006 compared withThe government continues its efforts to growth of 3.8% recorded for 2005.reduce unemployment, to encouragedirect foreign investment, and to Growth was recorded for all sectorsprivatize remaining state-owned except agriculture. Unemployment 5enterprises. remained below 10%, while consumer prices continued to rise above trend, in2.2 Recent Economic Performance part reflecting the impact of rising international oil prices over the last twoSince independence, in 1966, Barbados years. Strong revenue growth led to ahas transformed itself from a low- lower overall deficit of US$24.6 mn onincome economy dependent upon sugar Central Government operations duringproduction into an upper-middle-income the first nine months of 2006 comparedeconomy based on tourism. Growth rates with an overall fiscal deficit of US$70.4averaged between 3-5 percent since mn during the corresponding period of1993 until 2001, when the economy 2005. Reflecting the broad-basedcontracted 2.8 percent in the wake of the expansion in economic activities, the monetary liabilities of the banking 5 system expanded by 6.7 percent orhttps://www.cia.gov/library/publications/the- US$219.1 mn during the first nineworld-factbook/geos/bb.html months of 2006. On the other hand, net domestic credit grew by 8.4% or $218.1 5
  6. 6. DOING BUSINESS WITH BARBADOSmn; consequently, net international 16.4% during 2005, suggesting therereserves grew only marginally. Net may have been some success in theinternational reserves had declined in fiscal and monetary measureseach of the preceding two years by a implemented to improve the balance oftotal of US$238 mn.6 payments outturn. On the other hand, imports of capital goods continued toGDP (2006): US$2.976 billion. increase, moving by 16.7% to US$249.1GDP growth rate (2006): 3.8%. mn compared with growth of 11.3%Per capita GDP (2006 est.): US$17,300 7 during 2005. The growth in imports ofUnemployment rate: 7.6% (2006 est.)8 intermediate goods slowed to 0.4% compared with growth of 1.7% during2.3 Balance of payments 2005. Imports of intermediate goods amounted to US$419.2 mn during firstThe small overall balance of payments nine months of 2006.9surplus reflected in the increase in netinternational reserves was underpinned 2.4 Overview of Tradeby an improvement in both the externalcurrent account and the external capitalaccount positions. During 2005, there 2.4.1 Exportswas an overall payments deficit ofUS$152.1 mn. A current account deficit Exports--US$359 million (merchandise)of US$206.7 mn during the first nine and US$1.41 billion (commercialmonths of 2006 was lower than the services)deficit recorded during thecorresponding period of 2005 by Major markets--United States (13.4%),US$42.4 mn. During the first nine European Union (12.4%), Trinidad andmonths of 2006 imports fell by US$64.3 Tobago (10.8%), St. Lucia (6.1%), andmn while exports fell by US$24.6 mn. Jamaica (5%)10The resulting decline in the merchandisetrade deficit, along with a US$61.4 mn 2.4.2 Importsincrease in net travel inflows, were the Imports--US$1.6 billion (merchandise)major sources of the improvement on the and US$636 million (commercialcurrent 32 CDB Annual Economic services).Review 2006 Barbados account balance.Imports of consumer goods declined by Major suppliers--United States (35.9%),11.9% to $374.9 mn during the first nine Trinidad and Tobago (21.2%), Europeanmonths of 2006 in contrast to growth of Union (13.3%), Japan (7.6%), and Canada (3.4%) 11 6 Caribbean Development Bank Annual 9Economic Review 2006, Overview, page 30. Caribbean Development Bank Annual 7 Economic Review 2006, External Sector pageshttp://www.state.gov/r/pa/ei/bgn/26507.htm 31b-32a. 10 8 http://www.state.gov/r/pa/ei/bgn/26507.htmhttps://www.cia.gov/library/publications/the- 11world-factbook/geos/bb.html http://www.state.gov/r/pa/ei/bgn/26507.htm 6
  7. 7. DOING BUSINESS WITH BARBADOS2.5 Barbados’ Trade withCARICOMIn 2006, Barbados exports to CARICOMwas EC$7 billion while imports wereEC$4.7 billion, a trade surplus ofEC$571 million.Barbados’ top exports from CARICOMin 2006 includes Margarine, Cement(grey), prefabricated steel, Paper andpaper board, medicaments and aeratedwater. While the top imports includepetroleum products, aerated beverages,beer, cigarettes, and bars and rods. 7
  8. 8. DOING BUSINESS WITH BARBADOS3. GENERAL MARKETING FACTORS3.1 Distribution and Sales Channels 3.3 Use of Agents/DistributorsWholesalers are the major importers, Although the use of an agent oralthough some retailers import products distributor is not required, it isdirectly from manufacturers, recommended. A strong localwholesalers, and retailers in the United representative can place product andStates, Canada, and Europe. generate sales that otherwise may notDistribution agreements are common materialize.because manufacturers often grantcountrywide or regional exclusivedistribution agreements. 12 3.4 Franchising The Barbados Minister of Finance and3.2 Transportation Economic Affairs evaluates the potential competitive impact on non-franchised local businesses and must approve allGrantley Adams International Airport, franchises. Franchise holders pay anlocated about half an hour from the initial registration fee of BDS $10,000capital city of Bridgetown, handles (USD $5,000), and annual renewal feescommercial passenger and freight of BDS $2,000 (USD $1,000). Allaircraft, and serves as a sub-regional franchises must be registered with thehub. Direct flights from North America, Ministry of Finance in order to operateEurope and Latin America facilitate legally and repatriate profits and capital.tourist and business travel to other Process franchises, such as those used inislands of the eastern Caribbean. manufacturing or designs, must also be registered so that royalties can beThe port handles bulk exports, ocean- remitted abroad. Barbados currently hasgoing freighters and containerized cargo a policy of refusing to grant licenses tovessels, as well as the largest cruise foreign fast food franchises. 13liners that operate in the region. In2001, there were over 90 ships registeredwith a total tonnage in excess of 750,000 3.5 Advertising / Trade Promotiontons. The Barbados Ships registry is thesecond Ships Registry worldwide that Most businesses advertise inhas received Lloyd’s Registry Quality newspapers, radio or television.Assurance approval under the QualityManagement System Standard ISO 3.5.1 Direct Marketing9002. Direct marketing is not common in Barbados. The Barbados Investment and 12 13 Doing Business in Barbados: A Doing Business in Barbados: ACountry Commercial Guide for U.S. Companies, Country Commercial Guide for U.S. Companies,2006. 2006. 8
  9. 9. DOING BUSINESS WITH BARBADOSDevelopment Corporation (BIDC) can institutions or from foreign governmentbe helpful in arranging this type of aid sources that do not require purchaseactivity. from donor country companies. 143.6 Joint Ventures / LicensingThere is considerable joint venture andlicensing activity in Barbados. TheBarbados Investment DevelopmentCorporation can also be helpful inarranging this type of activity.3.7 Selling Factors / TechniquesIn sales of services and manufacturedgoods, Barbadians prefer to buy provenand brand name goods. Because pricesare high and storage space may belimited, Barbadians tend to purchasesmaller lots of consumer goods moreoften than is the norm in largercountries. All sales material and productlabels should be in the EnglishLanguage.3.7.1 Product PricingLocal companies adopt the cost plusmethod for pricing of their products. Thecost base is the CIF (Cost + Insurance +Freight) plus local charges. Markupsgenerally range from 20 percent to 50percent. Higher markups exist forspecialty items where there is little or nocompetition.3.7.2 Selling to the GovernmentSignificant opportunities exist for sellingto the government. This is particularlythe case when project financing isavailable from international financial 14 http://edis.ifas.ufl.edu/FE502 9
  10. 10. DOING BUSINESS WITH BARBADOS4. MARKET ACCESS Commodity Description and Coding CONDITIONS System (HS).4.1 Customs Tariffs Environmental Levy is charged at the rate of one percent of the CIF Value onBarbados allows duty-free imports from most goods. Since 1996, sales ofCARICOM members. However, the imported (but not domestic) goods fromCET allows each member to impose all countries are subject to animport duties on imports of scheduled environmental levy for the purpose ofproducts from other members.15 In the defraying the cost of disposing ofcase of Barbados, products scheduled are specific goods. The goods, which aremilk and cream, wheat flour, and specified in a schedule, include motormillfeed (pollard).16 vehicles, tyres, refrigerators, stoves and ranges, washing machines, dishwashingBarbados also accords tariff preferences machines, television sets, mattresses,to certain products imported from and electric accumulators. The levyColombia, and the Dominican Republic, rates vary from BDS$1.00 per item (forcountries with which CARICOM has bicycle tyres) to BDS$150 per item (forentered into free-trade agreements. motor vehicles). The levy may be refunded on re-exported goods.Import duty ranges from 0 to 20 percentof the CIF (Cost + Insurance + Freight) Excise Tax is charged on four categoriesvalue on most items. There are some of goods and these are:exceptions, which include bound rates • Motor Vehicleswhich range from 40 to 196 percent on • Tobacco Productsspecified agricultural and manufactured • Alcoholic Beverages andproducts. • Petroleum Products Excise taxes apply to the customs valueThe bound rates were reduced by 2.4 plus the customs duty and environmentalpercent every year until 2004. levy.Exceptions also include 60 percent onjewellery, 50 percent on watches and 45 Value Added Tax is charged at the ratepercent on motor cars. There are also of 15 percent. This tax is compoundedsome items such as cigarettes and and is charged on the total of the CIFalcoholic beverage,s which pay specific Value and any other import taxes. Somerates of import duty. goods are zero rated. Most domestically produced agri-food supplies are zero-Rates of Import Duty can be obtained rated, as are drugs and medical devices.from the Barbados Customs Tariff, Financial services, sales of property,which is based on the Harmonised ground transportation, water distribution, and sewerage services are exempt from 15 VAT. In addition, investment incentives Annex to the Treaty Establishing theCaribbean Community, Chapter III, Article 13, generally include VAT exemptions onSchedule I. inputs used in construction projects. 16 The products belong to HS headings: Also, in order to assist local04.02, 11.01, and 23.02. 10
  11. 11. DOING BUSINESS WITH BARBADOSmanufacturers, the VAT has beenwaived on their purchases of equipment, Barbados has bilateral investmentmachinery and spare parts, fuel, diesel, treaties with Canada (CARIBCAN),and natural gas. This waiver avoids long China, Cuba, Germany, Italy,delays before manufacturers obtain their Switzerland, the U.K., and Venezuela.refund. • The Caribbean Basin Initiative, which covers exports into the US;Copies of the legislation governing all • The Lome Convention, which coversimport taxes can be obtained from the sugar and a number of other productsBarbados Government Printing and services, as imported into orDepartment. provided to the EU; • CARIBCAN, which provides duty-The normal office hours of the Customs free access to Canada for manyand Excise Department for the Caribbean products.processing of documentation and theclearance of goods are 08:15 hours until 4.3 Non-Tariff Barriers16:30 hours. Import licences have been used inImporters who have rush shipments and general to monitor import flows and towish to clear them outside of the official protect domestic production fromhours may do so, but would be required competition. Imports from CARICOMto pay fees and travelling costs for the members are free of any quantitativeextra attendance of Customs personnel. restrictions (QRs). Other quantitative restrictions such as prohibitions andAdditional fees are required where the controls are in place to ensure nationalextra attendance of personnel from other security, safeguard consumer health andregulatory agencies is necessary.17 morality, or to preserve domestic plant and animal life and the environment.4.2 Free Trade Agreements Barbados has eliminated restrictive licensing procedures and imposed WTO-1. EU/ACP (COTONOU) Agreement approved bound duty rates. However,2. CARIBCAN licenses are still required (automatically3. CARICOM / DOMINICAN granted). A complete list of items that REPUBLIC require an import license can be found in4. CARIBBEAN BASIN INITIATIVE a publication titled “Open Import5. CARICOM General License Regulation 1995”.6. CARICOM / VENEZUELA Importers must obtain licenses prior to7. CARICOM / COLUMBIA the importation of the goods. Goods8. CARICOM / CUBA18 subject to bound duty rates can be found 17 18http://customs.gov.bb/General/Trade2.php http://customs.gov.bb/General/Trade1.php 11
  12. 12. DOING BUSINESS WITH BARBADOSon the Customs Tariff (Amendment) 4.6 Labelling and MarkingOrder, 2000 S.I. 2000 No. 29. Requirements The Barbados National Standards Institution (BNSI) publishes the labeling4.4 Prohibited and Restricted and marking requirements in theirImports standards regulations. To inquire about the labeling and marketing requirementsAlmost all goods can be imported into for a specific class of goods, contact theBarbados, though some require import Barbados National Standards Institutionlicenses, including many agricultural at Tel: 246-426-3870.20products. Beer, fruit juices, and fruitdrinks can be imported with a license. 4.7 Sanitary and Phytosanitary (SPS) Measures4.5 Import Documentation Barbados requires that importers obtain permits, licenses or permission from theBelow are some of the documents that relevant authorities for specifiedmust be presented to Customs when products prior to importation.goods arrive in Barbados: Phytosanitary certificates are required from the exporting authorities for fresh• Airway bills or bills of lading, fruit, vegetables, and plants and plant depending on the method of import. materials, and must accompany the goods declaration before processing is• The CARICOM document invoice allowed. Similarly, overseas health (the Commercial Invoice is certificates must accompany meat and acceptable if all of the required meat products. Psychotropic and other information is present). controlled drugs are subject to licenses from the Ministry of Health.• The suppliers invoice documenting Additionally, there are a number of other all items in the shipment. products that must meet obligatory requirements from the Barbados• The C-60 form (a declaration of National Standards Institution.21 particulars relating to Customs value). 4.8 Standards• The C-63 form (indicating the items being shipped, the weight, the The Barbados National Standards shipper, the tariff code, etc.).19 Institution (BNSI) oversees product 20 Doing Business in Barbados: A Country Commercial Guide for U.S. Companies, 2006. 21 Doing Business in Barbados: A 19 http://edis.ifas.ufl.edu/FE502 Country Commercial Guide for U.S. Companies, 2006. 12
  13. 13. DOING BUSINESS WITH BARBADOSstandards, labeling, and certification in Other marks are accepted on a case-by-Barbados. A nongovernmental case basis. A firm interested in having aorganization, it was established in 1973 mark accepted must submit the mark andunder the Companies Act as a joint relevant details to BNSI for assessment.venture between the Government ofBarbados and the private sector. The The procedures for product certificationactions of the Barbados National are as follows. The interested party mustStandards Institution were given legal submit an application and a non-weight by the following acts: refundable application fee of BDS $50.00 (USD $25.00) to BNSI. BNSI• The Control of Standards Act, Cap will then conduct a preliminary 326A; inspection of the manufacturing facility• The Weights and Measures Act, Cap to assess the testing facilities and the 331; quality assurance procedures for the• The BNSI Certification Marks Act, manufacturing process. In addition, Cap 325A. testing samples are taken to ascertain conformity to a standard’sQuality (CROSQ) is the body charged specifications. Testing costs are bornewith setting regional standards. BSNI by the applicant. After a report of thealso works with the Pan-American preliminary inspection is completed, aStandards Commission (COPANT) to scheme of testing and inspection isaddress standards issues as they relate to prepared for the organization. Thisthe Free Trade Area of the Americas. scheme includes information such as the points of production from where samplesOn August 6, 1997, BNSI accepted the would be drawn for testing and/orWTO TBT Agreement’s Code of Good inspection, the frequency, size andPractice for the Preparation, Adoption manner of drawing the samples, the testsand Application of Standards. 22 to be performed, the types of records to be maintained, corrective actions to be taken if necessary, and the method of4.9 Product Certification applying the mark. A marking fee, paid by the applicant, is negotiated whichThe BNSI Certification Marks Act, Cap covers the costs of the scheme of325A bestows the Barbados National inspection.Standards Institution with the authorityto certify products and processes and to At this point, a license to use the BNSIissue certification marks for which a mark can be issued. The license is goodBarbados National Standard exists. for one year and must be renewedBNSI practices a third party certification annually; there is a BDS $100.00 (USDsystem and also accepts third party $50.00) annual license fee. Anmarks of conformity from other application along with a BDS $20.00reputable and well-known agencies. (USD $10.00) application fee must be submitted in order to renew the mark. 22 Doing Business in Barbados: ACountry Commercial Guide for U.S. Companies,2006. 13
  14. 14. DOING BUSINESS WITH BARBADOS5. INVESTMENT PROFILE specific location, although there are zoning restrictions.5.1 Investment Incentives Schemes Most investment incentives in BarbadosInternational Businesses enjoy are tax incentives, although there aresubstantial tax incentives, including a some special programs formaximum tax rate of 2.5 percent, and manufacturers. Potential investorslengthy tax holidays for exporters. should contact a licensed accountant and/or lawyer in Barbados to find outWhile there are no formal performance which incentives fit best with their goals. 23requirements, government officials willmore likely approve investments theybelieve will create jobs and increaseexports and foreign exchange earnings. 5.2 Foreign Investment RegimeThere are no requirements forparticipation either by nationals or by the The Barbadian Government introduced agovernment in foreign investment wide range of investment incentivesprojects. applying broadly to manufacturing industry offered by the BarbadosThere is no requirement that enterprises Investment and Developmentmust purchase a fixed percentage of Corporation. Some of these are asgoods from local sources, but the follows:government encourages local sourcing. • Full exemption from taxes onCompanies must meet export corporate profits for fifteen years forperformance requirements to take export-only manufacturingadvantage of certain tax incentives. For companies;example, “enclave enterprises” must • Special tax rate for export industriesproduce goods exclusively for export of only 2.5 percent after theoutside the CARICOM region. Foreign expiration of the tax exemptioninvestors must finance their investments period;from external sources or from income • Tax rate of 1 - 2.5 percent on profitsthat the investment generates. When a of Information Services companies;foreign investment generates significant • Full exemption from import dutiesemployment or other tangible benefits on components, raw materials,for the country, the authorities may production machinery and otherallow the company to borrow locally for production related equipment such asworking capital. computers and spare parts; • Expedited customs clearanceThere is no requirement that locals own procedures with minimal paper workshares of a foreign investors enterprise, and no delays;but some restrictions may apply to sharetransfers. The Companies Act does notpermit bearer shares. Foreign investors 23 Doing Business in Barbados: Ado not need to establish facilities in any Country Commercial Guide for U.S. Companies, 2006. 14
  15. 15. DOING BUSINESS WITH BARBADOS• Full and unrestricted repatriation of from import duty, value added tax and capital, profits and dividends; environmental levy in respect of• Subsidised factory/office space furniture, fixtures and equipment as well available for rental in well-planned as building materials, supplies and industrial parks; equity financing. 24• Industrial training grant scheme to subsidize the cost of worker training;• A one-stop service for investors is 5.3 Free Trade Zones provided by the Barbados Investment and Development Corporation, a There are no free trade zones in special agency established by the Barbados. The government permits Government to facilitate investors goods to be stored in licensed bonded and promote industrial development; warehouses with duties payable prior to• Tax rate of 1 - 2.5 percent on profits the removal of goods for home of International Financial Services consumption. Companies;• Tax rate of 1 - 2.5 percent for International Business Companies.The Industrial Incentives (FactoryConstruction) Act 1965 (as amended)provides for extensive tax benefits to begiven to certain companies that constructfactory premises.A number of incentives relating totourist development were introduced inthe 2004 Budget, in December 2004.Under the Tourism Development Act2003, a total of 11 new hotels accountingfor 406 rooms have been developed,with extensions and renovations to 10other hotels, representing an investmentof $306.7 million, resulting in anadditional 483 rooms and 442 new jobs.New multi-purpose developmentsinclude 100 hotel rooms and 605 villarooms and are expected to generate 506jobs on completion of the projects.The Act allows investors in tourismprojects to benefit from write-off of 24capital expenditure and 150 percent ofinterest costs. There is also exemption http://www.lowtax.net/lowtax/html/jbscfir.html 15
  16. 16. DOING BUSINESS WITH BARBADOS6. ESTABLISHMENT OF BUSINESSES The Articles of Incorporation must conform to the Companies Act. Among6.1 Right to Private Ownership the requirements is that the corporations principal officer must be at least 18There is a constitutional right for years old, be of sound mind and mustnationals and non-nationals to establish not have been declared bankrupt.and own private enterprises and privateproperty in Barbados. These rights also Any number of shares may be issued.pertain to the acquisition and disposition Shares must be fully subscribed and paidof interests in private enterprises. for before they are issued.No industries are officially closed to The Corporate Affairs and Intellectualprivate enterprise. Some activities, such Properties Office publishes a notice ofas telecommunications, utilities, the formation of the company in thebroadcasting, banking, and insurance, Official Gazette.require a license from the government.There are no percentage or other An IBC is required to obtain a licenserestrictions on foreign ownership of a from the Ministry of Industry andlocal enterprise or participation in a joint International Business in order toventure. operate. This is a fairly routine procedure and costs about BDS $200 (USD $100). There is an annual renewal6.2 Establishing an Office fee of BDS $200 (USD $100). 25Barbados’ laws allow the formation of The “Corporate Affairs Section” of theseveral types of companies. One of these Corporate Affairs and Intellectualis the International Business Company Property Office has statutory(IBC). By law, a locally registered responsibility for the registration andattorney will be required to draft and file incorporation of various types ofArticles of Incorporation. The cost of companies, business names, bills of sale,filing the application at the Corporate pharmacies, trade unions, newspapersAffairs office is BDS $750 (USD $375) and limited partnerships. Numerousand BDS $30 (USD $15) to reserve the statutory registers are kept for the benefitname of the company prior to of the public at large, and the Registrarincorporation. This is mandatory. The is responsible under the law forcost of share certificates, a company maintaining the registers and ensuringseal, and other secretarial documentation that the particulars filed therein are keptrequired to commence operations usually current and are in a reliable state fordoes not exceed an additional BDS $250 inspection by the public.(USD $125). Attorneys fees are usuallyquoted at about BDS $3,000 (USD$1,500), but those fees are negotiable. 25Attorneys’ fees are normally lower for Doing Business in Barbados: Aincorporation of a local company. Country Commercial Guide for U.S. Companies, 2006. 16
  17. 17. DOING BUSINESS WITH BARBADOSAttorneys-at-Law, Corporate Secretariesand members of the public may visit the • Four photographsOffice to conduct searches in relation to • Police certificate of character (fromthe above-mentioned types of businesses home country)and companies registered here. The • Birth certificateregister of company mortgages and • Documentary proof of qualificationscharges and the bills of sale register may • Letter from employer, wherealso be searched by creditors and other applicableinterested members of the public to • Document certifying citizenship bydetermine the outstanding indebtedness descent, where necessaryof particular companies as well asindividuals. Non-residents require work permits to work in Barbados. These are processedSince the Registrar also functions as an in about six to eight weeks. There are noadjudicator of property transfer tax and statutory restrictions on the number ofstamp duty, commercial documents may foreign employees on the payroll of aalso be presented at the Office to be company at any time, but employers areassessed for government Stamp Duty or required to establish that the position inProperty Transfer Tax. question cannot be filled satisfactorily by a resident or national of Barbados. AMost registrations are affected by long-term work permit is valid for up tocompleting prescribed forms and paying three years. The cost per approval isa registration fee, whereupon a approximately Bds$3,600 -$4,000.certificate will invariably be issued by Short-term work permits are valid for upthe Registrar.26 to six months and are necessary for company personnel entering the country to assist with the setting up of the6.3 Work Permit Requirements operation and training employees. Approval will cost approximatelyRecent information from the Bds$600.00. 27Immigration Department indicates thatCARICOM skilled nationals are requiredto arrive in Barbados with return airline 6.4 Intellectual Property Rightstickets until they have been formallyregistered with the Immigration The ‘Intellectual Property Section’ of theDepartment as such. The registration Corporate Affairs and Intellectualprocess can take up to four weeks to Property Office is responsible forcomplete, and includes submitting to the administering Barbados’ intellectualImmigration Department a registration property rights system and for advisingform (available at the Immigration the Ministry of Industry andDepartment or at the BIDC), along with International Business on the technicalthe following documentation: and policy issues which underlie 26 27http://www.caipo.gov.bb/corp/corp.html http://www.lowtax.net/lowtax/html/jbscfir.html 17
  18. 18. DOING BUSINESS WITH BARBADOSBarbados intellectual property rights kinds, and which guarantee protectionregime. and legal recourse to rights-holders in line with internationally acceptedIntellectual Property comprises two (2) standards.28main branches, namely:1. Industrial Property for inventions 6.5 Conversion and Transfer Policies called patents, trade marks or service marks, integrated circuits, Companies can freely repatriate profits geographical indications, plant and capital from foreign direct breeder’s rights and industrial investment if they registered with the designs; and Central Bank at the time of investment.2. Copyright for literary, musical, The Central Bank may limit or delay artistic, photographic and conversions depending on the level of audiovisual works and related rights. international reserves under the Banks controlTo obtain protection for any form of“Industrial Property” the right-holder The Ministry of Finance controls themust make an application to the Office flow of foreign exchange, and thein the prescribed manner. After Exchange Control Division of theexamination of the application, the Central Bank of Barbados executesDirector may grant or renew these rights policy under the Exchange Control Act.as the case may be according to law. Individuals may apply through a localRegisters are kept by the Director in bank to convert the equivalent of USDrespect of the various categories of $3,750 per year for personal travel andindustrial property rights and public USD $25,000 for business travel. Torecords are maintained for the convert anything over these limits, oneinformation of interested rights-holders must apply to the Central Bank.29and members of the public. UnderBarbados law, any rights-holder or otherperson who is aggrieved by any act ordecision of the Director has a right ofappeal to the High Court against any actor decision of the Director affecting theirrights.In contrast, there are no such formalitiesrequired to obtain Copyright protection.Copyright protection for thecreator/author starts as soon as the workis created and no application to the 28Office for protection is required. http://www.caipo.gov.bb/intell/intell.htmlBarbados is a party to many international 29 Doing Business in Barbados: Atreaties and conventions which recognize Country Commercial Guide for U.S. Companies,intellectual property rights of several 2006. 18
  19. 19. DOING BUSINESS WITH BARBADOS7 CULTURAL Barbados collects a departure tax of PRACTICES BDS $25.00 (USD $12.50).7.1 Business CustomsBridgetown is generally the centre ofbusiness on the island. Business protocolis fairly formal, including greetings (useMr or Ms) and dress, which is smart.Handshaking between both men andwomen is expected and business cardsare handed out on introduction.Punctuality is expected at meetings.Business hours are generally 8am to 5pmMonday to Friday.30For men, suit and tie is the normalbusiness attire; Barbadian mensometimes wear a "shirt-jack," which isakin to a safari-type short-sleeved jacketwith matching trousers. For women, along- or short-sleeved suit, or a dress, isappropriate. Business hours aregenerally from 8:00 a.m. - 4:30 p.m.Luncheon meetings are common, butbreakfast meetings are not.Appointments are generally required forbusiness meetings.317.2 Entry/Exit Requirements:Valid passports are required for allvisitors. All tourists require a return oronward ticket, proof of sufficient fundsand documents for onward travel.Passports must be valid for the period ofintended stay. 30http://www.wordtravels.com/Travelguide/Countries/Barbados/Basics 31 Doing Business in Barbados: ACountry Commercial Guide for U.S. Companies,2006. 19

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