RSS |
The Offshore Banking Act was enacted on July 26, 1979. Its purpose is to provide incentives by way of tax reductions and other exemptions and benefits for offshore banking carried on from within Barbados. |
Offshore banking in Barbados is defined as:
A) Receiving foreign funds through:
- Acceptance of foreign money deposits payable on demand, after a fixed period, or after notice;
- Sale or placement of foreign bonds, certificates, notes or other debt obligations, or other foreign securities;
- Any similar activity involving foreign money or foreign securities.
B) Using the foreign funds mentioned above to finance:
- Loans, advances and investments; or
- Activities of the person carrying on the business.
C) Offshore banking also includes the acceptance in trust of:
- Amounts of money in foreign currencies, foreign securities or both;
- Foreign personal or movable properties; AND/OR
- Real or immovable property outside Barbados from person’s resident outside Barbados.
Application procedures
To qualify and obtain a licence, an applicant must:
- Obtain the consent of the Minister to incorporate for the purpose of offshore banking. The government imposes a flat annual license fee of USD12,500.
- Show that it is an eligible company or a qualified foreign bank
- State the names and addresses of its director
- Submit a certified copy of its articles of incorporation;
- Give particulars of the proposed banking activity
- Submit the names of shareholders who are residents of Barbados and the number of shares held by them.
- At least one of the shareholders must be the director’s resident in Barbados.
- Minimum capital requirement for residents and non-residents of USD 500,000 and USD 125,000 respectively.
Summary of Incentives
- Low rate of tax on net profits (maximum 2.5%).
- No capital gains tax.
- No taxes on dividends or interest paid to non-residents.
- No estate, inheritance or succession tax on shares, securities or assets beneficially owned by non-residents.
- No tax or duty in respect of the transfer of securities or other assets to non-residents.
- No tax upon the incremental value of property or other assets in Barbados.
- No tax on trusts established by a non-resident for the benefit of another non-resident if trust assets consist solely of foreign currency or foreign securities.
- Availability of Government guarantee regarding future taxation.
- Availability of exemption from customs duties on goods imported into Barbados (including equipment or fixtures) for doing business from within Barbados.
- Tax treaties with US, Canada, UK, Switzerland, Sweden, Norway and Finland.
- Dividends paid from the active business income of a Barbados resident foreign affiliate to its Canadian corporate shareholder may be considered exempt surplus and thus not taxable in Canada.
- Simplified corporate mobility.
- Exchange control exemptions
- Provision for redeemable shares (subject to solvency tests).
- Provision for pre-incorporation contracts.
- Provision for telephone meetings.
- Income tax and exchange control concessions for expatriate employees.
- No requirement for public filing of financial statement.
- Confidentiality relating to the affairs of the banks non-resident customers.
- Freedom to conduct trust business.
GOWEALTHY.COM © 2010
For comments: editor@gowealthy.com
Image source: Offshore-protection.com
This article was viewed 3046 time(s)
