You may know that Barbados is a tropical island and popular tourist destination – or how the nation left the Commonwealth in 2021 and became a republic. But did you know that a growing number of businesses and investors are considering a company formation in Barbados because of the advantages the jurisdiction provides?
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Benefits of company formation in Barbados
- Has Double Tax Agreements with more than 40 countries
- No residency requirement for incorporation
- Well-educated, English-speaking labor force
- Shareholders/beneficiary details can be kept private
- Business-friendly environment
- Social, political and economic stability
The above list is not exhaustive. There are many more reasons why a company formation in Barbados would be a smart move for many foreign businesses and investors.
SEE ALSO: Types of Legal Entities Panama
Top 6 reasons why foreign companies should consider company formation in Barbados
1. DTA treaties with most developed economies
Barbados has entered into Double Tax Agreements (DTAs) with many major economies. A DTA is a treaty between two or more nations that don’t subject individuals or companies to double taxation of income and property. Company formation in Barbados would likely be an attractive option for those countries which have DTAs in place with the island nation, including Canada, China, Finland, Germany, Norway, Sweden, Switzerland, the United Kingdom and the United States.
2. No residency required for Company formation in Barbados
There are different sets of rules depending on what type of company one plans to form in Barbados, but unlike other jurisdictions, residing in Barbados is not required. In terms of location, a Barbadian business address (which may be that of your office) is all that is required to set up a company. Non-resident companies are subject to tax only on income generated on the island.
3. A highly skilled, English-speaking labor market
Just under 150,000 of the island’s 287,000 residents make up Barbados’s labor force. There are plenty of young, well-educated and highly skilled employees in the labor market, and that figure is growing. There is no shortage of Barbadian talent in the tech and services sectors, the majority of whom work in the corporate/financial services sector – in fact, just under 80 percent of Barbadians are employed in these sectors. And unlike other jurisdictions in the region, Barbados is an English-speaking country, so communication is not an issue.
4. Shareholder/beneficiary details can be kept private
Many countries in Latin America and the Caribbean require foreign investors and businesses to divulge details about their shareholders, beneficiaries, executives and managers, etc. Not so in the island nation. Company formation in Barbados will likely appeal to companies that wish to keep details about their senior leadership and shareholders confidential.
5. A business-friendly environment
Barbados offers a well-regulated, transparent, and supportive business environment for investors and company formation in Barbados. There are no restrictions on foreign ownership of businesses or real estate, and the government works to make it as easy as possible for you to do business on the island. Barbados ranked 128 out of 190 countries in the World Bank’s 2020 Ease of Doing Business Report, giving it a “Medium” grade in terms of doing business on the island.
6. A highly stable political system and economy
Barbados transitioned from the Commonwealth and became a sovereign republic in November 2021, but this had little-to-no social, political or economic impact on the country. It has a long tradition of democratic governance and well-established property rights, rule of law, and boasts low crime and low corruption rates. All these conditions make it a conducive jurisdiction for company formation in Barbados.
After doing your research and deciding that a company formation in Barbados is right for your business, what are the next steps?
Company formation in Barbados: A 6-step guide
There are many kinds of companies that foreigners can register in Barbados, the most common being limited liability companies (LLCs) and international business companies (IBCs).
- Step 1 – Create your company’s name, with two backup alternative names in case the business name is already taken, or if it’s too alike an already-established business. These names then must be submitted to the Barbadian Companies Registry
- Step 2 – Prepare a Memorandum of Association (MOA) document that spells out the scope of the company’s business activities and why it must be incorporated
- Step 3 – Obtain and complete an Article of Incorporation document
- Step 4 – Submit all the correct documentation to the relevant Barbadian authorities (which documents you need to submit, and to what government body, will depend on the type of business you are incorporating)
- Step 5 – If all goes according to plan, the relevant authorities will grant you a Certificate of Incorporation, and with it, your company is ready to begin doing business
- Step 6 – Finally, begin the process of opening a corporate bank account in Barbados
On average, it takes about six weeks to incorporate a business in Barbados, and that’s not including the time it takes to set up a corporate bank account.
The process of incorporating in Barbados can at once be straight-forward and complicated. When you’ve decided to move forward with a company formation in Barbados, it’s best to hire a local legal expert who knows how to navigate the legal, regulatory and financial landscape.
Biz Latin Hub can help you with company formation in Barbados
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.
Our unrivalled reach means we are ideally placed to support multi-jurisdiction market entries and cross border operations.
As well as knowledge about company formation in Barbados, our portfolio of services includes hiring & PEO, accounting & taxation, company formation, bank account opening, and corporate legal services.
Contact us today to find out more about how we can assist you in finding top talent, or otherwise doing business in Latin America and the Caribbean.