As a small open economy, as with all others, Barbados is easily impacted by the headwinds of the developed world. Exogenous variables are a reality. While we agitate on the global platform for favourable outcomes, we have always continued to determine our destiny through education, innovation, adaptation, and thought leadership.
Since becoming independent in 1966, Barbados has recognised the inherent difficulties in building a thriving economy on the basis of selling commodities on an international market subject to the vagaries of geopolitics and market forces. The global business sector is a vivid example of a cadre of professionals surveying the global landscape and recognising that our sustainability lay in the provision of high value services to a sophisticated and mobile global clientele. This business model was enabled by legal structures put in place by the Government of Barbados in the early 1970s as part of the island’s economic diversification efforts away from a mono-crop (sugar)-based economy.[i] This sector sought to leverage Barbados’ natural advantages of its favourable geographical location, beauty, and pleasant climate, macroeconomic and political stability, rule of law, and a well-educated workforce – all necessary ingredients for a global business hub. It is a recipe which has worked well as Barbados is one of the top regarded global business jurisdictions in the Caribbean and among the world’s top 10 captive insurance hubs.
As envisioned by the early pioneers in shaping Barbados as an international financial services centre, it has been this global business sector that has proven to be a largely resilient economic sector in Barbados in the face of the COVID-19 pandemic. Tax revenues from the sector not only continue to comprise the lion’s share of corporate tax receipts, but revenues from the sector continued to grow while others declined.[ii] In a situation where travel has been so severely disrupted, the ability to conduct cross-border transactions for clients a continent or further away has been an important hedge in these uncertain times.
What the last few years have taught us is, as there always will be challenges from without, it is imperative that we then master what we control. While some claim mastery to be elusive and fluid, we have excelled in key areas.
Long-standing Products And Services
Fundamentally, Barbados is in the business of providing solutions. In an increasingly volatile and uncertain world, Barbados’ global business offerings help to smooth out the ambiguity and uncertainty.
Corporate services, Head Office services, and a full suite of business management services have always been an offering of the jurisdiction by world class professionals.
The establishment and management of trusts for succession planning and asset protection has been and remains a favoured product with investors. Seasoned, qualified professionals hold to their fiduciary responsibilities in ensuring the interests of all are met.
The realisation of assets from corporations and trust management saw the growth of our investment management business. A full suite of securities related licences under the Financial Services Commission (FSC) allow companies to carry on a wide range of asset management related activities from advisory to discretionary management, brokerage services, fund administration and fund management. Investors are able to access all global markets through relationships with several professional providers.
Along with the large Canadian and regionally indigenous commercial banks, Barbados has smaller foreign currency banks offering clients suitable options for private banking services.
As one of the Top 10 captive insurance domiciles in the world, Barbados added 16 new captives during 2020, bringing the total to 279 as of December 31, 2020. Growth in this area is set to continue with 20 Insurance Management Companies firmly rooted here, infrastructure, and professional staff with many years of sound experience. While business here is dominated by Canadian and US captives, there is a good spread with growing establishment from Latin America and Europe.
Innovation Of New Products And Services
Barbados has continued to reinvent itself by broadening the offering of services and sectors. We were the first Caribbean country to pioneer a digital nomad visa in 2020 (the Barbados Welcome Stamp). We have developed a medicinal cannabis industry which aims to not only attract FDI, but also expand our medical tourism offerings. While Barbados has not been the first in the region to seek to exploit the multi-billion dollar global cannabis industry, we have had the advantage of time and observation to allow our Barbados Medicinal Cannabis Licensing Authority to craft a regime that creates opportunities for investors along the full seed-to-sale value chain. The regime is welcoming to international investors who are open to having a Barbados or CARICOM corporate interest as a minority partner with at least a 30 per cent ownership stake.
The Barbados regulatory sandbox – jointly administered by the Central Bank of Barbados and the FSC - allows for timely and safe innovation in the financial technology (FinTech) space. Creatives get to test new products and services while the regulators have an opportunity to measure such activities within the context of the current and potential regulatory framework. This enabling environment created the conditions for a Barbadian company to develop one of the first central bank digital currencies in the region and join the elite few who are piloting such technology within a currency union.
Certainty Of Legislation, Fees Taxation, And Transparency And Compliance
So much was done from the middle of 2018 to set the Barbados economy on a path to recovery and establish the platform on which the country would thrive in the world with which we were familiar. What we did not know then is that we were, thankfully, rebuilding an economy that could survive the ravages of the COVID-19 pandemic.
Along with all the initiatives that were effected alongside the IMF programme, 15 major legislative rewrites were completed, which saw Barbados retain its position as a strong and effective international financial centre.
Barbados’ world-class educational system has endowed the island with what we have always termed our greatest resource – our human capital. The island maintains a highly talented skilled workforce, as well as a diversified array of corporate services providers.
Certainty Of Our Welcome
Barbados has long been an attractive jurisdiction for High Net Worth Individuals wishing to relocate to the island mainly to enjoy a better quality of life while benefiting from various corporate strategies to protect their wealth for current and future generations. Since 2012, there has been ongoing and active reform of our Immigration Act to make this island an attractive and welcoming prospect for wealthy investors and highly skilled entrepreneurs equipped to transfer specialised knowledge and skills to Barbadians. This has resulted in the offering of a special purpose residency permit and, more recently, the Welcome Stamp visa.
Lifestyle And Security
Barbados’ quality of life is on par with that of many metropolitan countries. The island is presently ranked at number 58 on the Human Development Index.[iii]
Technology And Infrastructure
Barbados also boasts excellent infrastructure, with extensive road and telecommunications networks. The Grantley Adams International Airport remains a hub in the eastern Caribbean with links across the Caribbean and major metropolitan cities. The island has expanded airlinks with Latin America and will seek to establish airlinks with Ghana shortly.
Platform For Doing Business
Ongoing institutional strengthening and digital transformation in several government entities critical to our business platform are ushering a climate of faster, easier and more certain means of doing business in Barbados. The Corporate Affairs and Intellectual Property office will this summer commence testing of phase 1 of its digital platform which will allow many of its services to be conducted online.
Our geographic location, aligned time zones, and similarities in cultural experience position Barbados to be a gateway into Central and South America. Moreover, with a long, deeply entrenched relationship with the only English-speaking nation in South America, Guyana, Barbados is well ready to leverage its sophisticated platform and decades of experience to be the hub for entry into the market of that rapidly growing state. There is direct airlift between Barbados and Guyana and as both nations are signatories to the CARICOM avoidance of double taxation treaty and the CARICOM Single Market and Economy, this paves the way for a Barbados corporation to safely and seamlessly transfer both people and capital to and from the fastest growing economy in this hemisphere.
Barbados remains a top financial hub for Canadian direct investment (CDI). According to StatsCan, Barbados was the fifth largest destination for CDI in 2017-2019.[iv] In 2019, Canadian CDI in Barbados totaled $49.8 billion Canadian dollars.
The message here is that Barbados will continue to be agile in response to the needs of all who seek out our shores for sound, substantial, compliant business and lifestyle; and in response to the practice changes agreed to at the global level.
In association with Invest Barbados
[ii] See Central Bank of Barbados Review of the Barbados Economy for the first half of 2021 http://www.centralbank.org.bb/Portals/0/Files/Central%20Bank%20of%20Barbados%20Review%20of%20Barbados'%20Economy%20-%20January-June%202021.pdf
CEO of Amicorp Barbados and President of BIBA - the Association for Global Business in Barbados.