A Strong Regulatory Outlook In Barbados

Long standing stability in the broader financial services sector and a consistent application of only taking on solid reputable business, are keys to the strengths of Barbados which is a draw for global business. Barbados takes international standards very seriously and is committed to a sound and reputable financial sector. 

By way of background, the Central Bank of Barbados (CBB) established in 1972 regulates banks by providing supervision and ensuring stability of the financial system. 

The government of Barbados further strengthened oversight and the legal framework and along with revised legislation, by creating the Financial Services Commission (FSC) in 2011.  The FSC is responsible for supervising and regulating the non-banking financial services sector in Barbados which includes insurance companies, credit unions, pensions, securities and more.

Barbados has established a robust regulatory framework for its business sector. Clear and effective legislation provides stringent guidelines for good governance which are in turn enforced by regulators in each sector.

Adherence to international best practice standards is a hallmark of the Barbados value proposition.   The country has a well-developed legal system based on English common law. Property rights and intellectual property are well-protected and an independent judiciary ensures the impartial resolution of disputes.

Auditing and reporting meet international standards, ensuring confidence in business activities. Barbados also enjoys a long tradition of transparency and inter-governmental cooperation on information exchange matters.[i]

What does this mean for organisations wanting to enter the Barbados market?  It simply means supervision, processes, and governance are focused and streamlined for each sector.  The supervisory structure and guidelines lend strength, stability, focus and good governance to the sector reinforcing the international appeal of this market.

In 2015, a new piece of legislation entitled the Corporate and Trust Service Providers Act was enacted which gave welcomed structure and oversight to the formation and management of companies, further ensuring a reputable and sound jurisdiction is available to all.

It may be interesting to note that Barbados has been attracting significant Foreign Direct Investment for decades, particularly from Canada and the US.  Barbados is one of the largest destinations for Canadian direct investment abroad, accumulating CA$49.8 billion as of 2019[ii].

To support numerous business objectives and growth, Barbados offers a wide variety of competent professional service providers, such as:

• Corporate and Trust Service Providers
• Tax advisors
• Lawyers
• Chartered accountants
• Real Estate agencies
• Consultants

These qualified service professionals will assist in navigating through the various regulatory requirements to set up a structure most suitable to your strategic and financial goals.  It is part of what attracted me to move from Canada back in 2011 and establish a regulatory compliance consulting business in Barbados. 

You can also join the above positive features with a stable political environment, an economy with much upward potential, and several interesting business associations, such as the Barbados International Business Association (BIBA) for global business, which provides an opportunity to network and get to know people operating across the broader business sectors.

There have been numerous new and updated guidelines and legislation in Barbados over the last few years in the regulatory compliance space, including but not limited to:

• Companies (Amendment) Act, 2019
• Barbados Companies (Economic Substance) Act, 2019
• Corporate and Trust Service Providers (Amendment) Act, 2019
• Financial Institutions (Amendment) Act, 2018
• Money Laundering and Financing of Terrorism (Prevention and Control) (Amendment) Act, 2019
• All four (4) regulatory bodies updated their Anti-Money Laundering Combatting the Financing of Terrorism and Proliferation Financing Guidelines, 2021
• Anti-Terrorism (Amendment) Act, 2019
• Proceeds and Instrumentalities of Crime Act, 2019

Several of these amendments are evidence of the continuous strengthening of the broader regulatory regime in Barbados as well as with specific aim, in some cases, to remain in adherence to international standards, particularly those set out by the Financial Action Task Force (FATF) and the Organisation for Economic Cooperation and Development (OECD).

Barbados recently joined the two-pillar plan with the OECD to reform international taxation rules. Pillar One aims to ensure a fairer distribution of profits and taxing rights among countries with respect to the largest Multinational Enterprises (MNEs), including digital companies. Pillar Two seeks to put a floor on competition over corporate income tax, through the introduction of a global minimum corporate tax rate that countries can use to protect their tax bases.[iii]

Barbados is a well-regulated jurisdiction to be seriously considered as a destination of choice for your business operations with a large base of professionals to assist and support in various business aspects, while also ensuring substantive business management on the ground.  Numerous direct flight options make Barbados easily accessible for regular business and board meetings with choices available from London, New York, Toronto, Miami and more and for the predominance of the year, we are in the same time zone as New York and Toronto (note that Barbados does not observe daylight savings hours).

Footnotes:

[i] https://www.investbarbados.org/why-barbados/well-regulated/

[ii] https://www150.statcan.gc.ca/n1/daily-quotidien/200717/t001b-eng.htm

[iii] https://www.oecd.org/countries/barbados/barbados-joins-agreement-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy.htm

Glenna Smith
Glenna Smith (CAMS) is Managing Director of Smith Compliance Consulting (SCC) Inc. in Barbados, holds a Bachelor of Commerce, is a Board member of the Caribbean Regional Compliance Association, Director and chairs the Banking Committee of Barbados International Business Association (BIBA) and former President of the Barbados Association of Compliance Professionals. Glenna has gained wide and in-depth knowledge in financial crime, compliance, operational risk and corporate governance during 30 years in financial services. Glenna authors a number of articles and is an engaging presenter who speaks regularly regionally and internationally on a variety of topics.