Barbados Seeks Broader Wealth Management Stake

Change is an inevitable aspect of the global business environment, but what Barbados continues to offer is a steady yet responsive approach to developments that impact decision makers in the sector.

As a small island developing state, the country has understood and prioritised social and economic development. It has manoeuvred through various global challenges, taking strategic decisions to maintain its place among the world’s leading and robustly regulated international financial centres.

Its strong leadership is supported by highly-skilled human capital, modern physical and telecommunications infrastructure, as well as a legal and tax framework that allows companies and high net worth individuals (HNWIs) to find the structures and vehicles that suit their particular needs.

Barbados has long been a magnet for some of the world’s wealthiest, who have found the destination not only an ideal travel spot with resorts and amenities that meet sophisticated standards of such a base, but also an important domicile from which this exclusive segment can operate their corporate entities and manage their portfolios.

Investors in Barbados’ hot real estate and second home market or its financial services sector enjoy several benefits including full and unrestricted repatriations of profits and dividends to home countries, despite the solid regulation of the island’s Central Bank.

Its commercial banking sector has been built out over more than a century through the establishment of financial institutions such as Barclays Bank, which commenced operations in Barbados in 1836. Other international banks such as Canadian Imperial Bank of Commerce (CIBC) followed in the 1920s with branches in the Caribbean first established in Barbados’ capital city Bridgetown. Following the merger of CIBC West Indies Holdings and Barclays Bank PLC Caribbean, CIBC FirstCaribbean International Bank was formed.

More North American financial institutions such as the Bank of Nova Scotia and the Royal Bank of Canada have found Barbados to be a central, profitable operating base in the Caribbean. Barbados’ banking landscape also includes several offshore institutions catering to specialised markets.

Who are some of those prominent business magnates who have discovered Barbados’ strategic value?

Neville Isdell, a long-time friend of the island, investor, and now resident in Barbados, was Coca Cola’s global chairman and chief executive officer for decades. He led the world's largest beverage company to many heights, ensuring its sustainability through many changes in the industry. He remains an international consultant, and from his base in Barbados, is the owner and chair of Collines Investments.

Another example of a global CEO residing and efficiently operating from Barbados is Damian McKinney, global head of the Stoli Group.  One of the world’s leaders in the production and distribution of premium vodkas and beverages, Stoli reported annual revenue of US$111 million in 2021. McKinney is a British businessman who established a successful global consultancy, McKinney Rogers, in Barbados, before being recruited to head the Stoli Group.

McKinney, who cemented his relationship with Barbados by becoming a citizen of the island, has spoken about his ability to run the global company from Barbados during the COVID-19 pandemic and until shortly after the Ukraine war started a year ago.

Isdell and McKinney represent examples of the reach and capability of Barbados’ infrastructure, specialist human resources that the country attracts and also possesses, the reliable and state-of- the-art telecommunications network, tax, legal, and banking structures to support a range of global financial services that may be required.

As McKinney outlined while being the featured speaker at the Barbados International Business Association’s 25^th anniversary lecture in February, it was Barbados’ excellent communications infrastructure, legal and regulatory environment, business support organisations, skilled workforce and the long track record as a leading financial services centre, that allowed him to coordinate the management of Stoli from the island.

Meanwhile, Warrick Ward, CEO of the Barbados Financial Services Commission (FSC), the key regulator of non-bank financial institutions, spoke to the island’s commitment to regulations that meet global standards but not unnecessarily onerous that it stymies financial sector development.

“We seek to safeguard the sustainability of the financial services industry and a financial system that is resistant to a range of shocks, with the capacity to fulfill its basic functions smoothly even when unpredictable events occur,” Ward outlined.

Having successfully established a thriving global business sector that is more than four decades old, Barbados has become the world’s 7^th leading captive insurance domicile, securing a significant portion of the market.

Statistics from the FSC indicate that by 31 December 2022, 76 per cent of the captive business originates from North America, with Canada accounting for 51 per cent.

Regarding the provision of wealth and portfolio management services, how is the assertion supported that Barbados is appropriately placed to cater to the needs of wealthy individuals, families and trusts?

Many of the same reasons why Barbados has remained a global business hub of choice, also extend to the wealth and portfolio management services segment. The island is simply a trusted, reliable jurisdiction with mind and management on the ground, serving a cross section of needs for corporates and individuals.

The island’s comprehensive, modern legal framework includes updates to the Trusts (Miscellaneous Provisions) Act, the Companies (Economic Substance) Act, the Data Protection Act (2019), Remote Employment, 2020 (Barbados Welcome Stamp), Corporate (Miscellaneous Provisions) Act 2021, Societies with Restricted Liability (Amendment) Act 2021, and the Shipping Corporations (Amendment) Act, among others.

The country’s legislators have ensured that suitable, modern and responsive legislation is enacted to maintain the island’s competitive edge.

In addition, Barbados boasts a cadre of attorneys-at-law with regional and international counterpart relations, who can guide interested parties through the processes related to trusts, taxation, regulatory, and compliance requirements.

Kevin Hunte, Barbados’ Director of the International Business Unit outlined the Government department’s efforts, working across agencies, departments and sectors to be compliant with various standards of the Organisation for Economic Cooperation and Development (OECD). This has resulted in Barbados’ omission from the European Commission’s most recent listing exercise.

Elliott Barrow CIM, FCSI, one of the island’s leading investment specialists, is the Senior Portfolio Manager and Investment Advisor with RBC Dominion Securities Global, and a strident advocate for the establishment of more wealth management companies here.

He believes the presence of a greater number of wealth management companies on the ground helps to bolster the country’s attractiveness as a domicile for more high net worth individuals.

His industry counterpart Darren Treasure, the Executive Director for the Caribbean at London & Capital, works with insurers and institutional clients and provides investment management and bespoke investment solutions.

The Chartered Professional Accountant and Chartered Financial Analyst has been resident in Barbados for more than two decades, and highlights the importance of trust and confidence in the calibre of wealth management professionals in order to grow the sector.

For wealthy individuals and families residing in Barbados or planning relocation, Treasure notes the availability of experienced professionals on the island. He also cited the advantages of having easy access to your wealth management advisor even if the assets are situated overseas but managed locally.

Barbados has been able to leverage and build upon the longstanding, stable relationship with Canadian investors, that in 2021, Canadian direct investment in Barbados totalled CAN $45.1 billion, according to statistics from the Canadian government. As a result, Barbados is among the top six in the world for overseas Canadian investment.

Facilitating the needs of investors is Invest Barbados, the investment promotion agency of the government of Barbados. Headed by financial expert and economist Kaye-Anne Greenidge, Invest Barbados’ team assures that investments are safe on the island.

Greenidge stated: “The country is recognised as a trusted jurisdiction for wealth management – efficient security and regulation are two of the pillars on which the country is based. And our pro-business government and modern business legislation mean doing business here is straight-forward and stress-free.

“We have the leading accounting companies, KPMG, Deloitte, PwC, EY and BDO on island, in addition to other top service providers who will work with you to ensure you select the investment structure that best suits your needs, including trusts and mutual funds.”

Greenidge further explained that as of January 2023, there were 17 foreign currency earning banks in Barbados, with many globally recognised names in the mix. They are drawn to the island because of the competitive tax regime, exemptions from exchange control restrictions, the availability of world-class business services and human resources and our reliable networking infrastructure to support financial transactions.

The country’s expanding tax and investment treaty network also provides investors with confidence and security in matters of taxation.