As published on barbadostoday.bb, Thursday 11 November, 2021.
Barbados will soon have laws that allow for the establishment of a free zone on the island. Prime Minister Mia Mottley recently gave this indication as she pointed to the need for greater direct foreign investment in a range of industries and sectors in the Barbados economy.
“The Government will shortly bring to Parliament, legislation for the establishment of a free zone, recognising that we have to be able to find a way to exploit the geopolitical tensions, the opportunities for near-shoring and opportunities for a range of businesses that may not have existed before,” said Mottley.
She was addressing the recent Barbados Chamber of Commerce and Industry (BCCI) business luncheon, which was held at the Lloyd Erskine Sandiford Centre under the theme Building Bridges for a Successful Economic Recovery.
A free zone, also referred to as a free port or free economic zone, is essentially an area where goods and services are traded at preferential tax and customs rates or with no tax at all, in order to encourage economic activity. In many free zones, there are usually mostly offshore firms.
Pointing to the planned global minimum tax rate, which is due to take effect by 2023, Mottley said Barbados must recognise that “the next two to three years will be difficult”.
However, she said she remained “conscious and confident that if we can marry it with substantive economic activity, if we can marry it with stabilising this country with respect to the immigration issues that we have in terms of population deficit, then there may be a sweet spot that gives us a pathway to prosperity, but it starts with changing the mentality”.
Mottley gave no inadication how soon the free economic zone was likely to be established or where it would be located.
Government first touted the idea of a free zone earlier this year, indicating that it was necessary to help attract foreign direct investment.