In the delivery of the Barbados Budget for 2011, the Minister of Finance and Economic Affairs Chris Sinckler focused on the needs of the international business sector. He highlighted the sector’s role as being one of “critical importance to the economic fortunes of the Barbados economy”.
The Minister wants to ensure that Barbados offshore legislation remains relevant in today’s highly competitive business climate. As such, the Government of Barbados will be partnering with the Barbados International Business Association (BIBA) to pursue the following pieces of legislation with a “laser-like focus”.
The legislation mentioned includes:
• Amendments to the Society with Restricted Liabilities Act to effect mergers between these entities;
• Enactment of Foundation Legislation which would put Barbados on competitive footing with Panama, Malta and the Bahamas;
• Amendments to the Companies Act and if necessary the Securities Act;
• Amendments to International Corporate and Trust Providers Companies Acts and the finalization and laying of the accompanying regulations;
• Amendments to the Companies Act to allow for incorporation of companies with Chinese names along with an English equivalent in order to attract more businesses from Asia;
• Enactment of Private Trust Company Legislation.
This package of legislation aims to ensure that the Barbados offshore sector “improves facilitation efficiencies and develops new products to assist in attracting even more players to our jurisdiction.”
Additional work will be done to develop a multi-year licensing application for International Business Companies that would prefer to acquire a multi-year license and receive a discount in the process.
The Government of Barbados and BIBA will also review the entire rate structure in the offshore sector and intervene if any rate structure is found to be hindering the attractiveness of the Barbados offshore product. This will ensure that all rates being charged remain competitive and relevant when compared to other jurisdictions worldwide.
Barbados Economic Growth during the First Six Months of 2011
The first six months of 2011 saw the Barbadian economy picking up speed and posting a growth rate of 2.1% which is a strong result given the tough economic climate and sluggish recovery experienced by the island’s major economic partners in the United Kingdom and the United States of America. This increased growth follows the modest growth of 0.2% in 2010 and paints a picture of Barbados’ economic emergence from the worldwide recession. It is expected that the economy will post a growth figure between 2.0% t0 2.5% for 2011.
Tax revenues from the International Business and Financial Services sector continued to remain depressed due to the reduction in income made by these companies around the world. Despite this, the sector is showing moderate growth in the number of new entities licensed in the first six months of 2011 when compared to the same period a year ago.
“The number of new entities licensed grew to 320 when compared with 267 for the same period in 2010. There were 274 International Business Companies (IBCs) licensed at the end of June 2011 compared with 199 in the similar period of 2010. With regard to Societies with Restricted Liability (SRLs), the new licenses at the end of June 2011 numbered 11 in contrast to 9 recorded at the end of June 2010.”
The Barbados economy is showing sure signs of recovery from the worst recession of our generation. The Government of Barbados has been working hard to keep the deficit and foreign exchange balances under control during these challenging times. Against this backdrop, the Minister was unable to offer any major incentives or much relief for the average citizen. Barbadians will need to hold strain for sometime more. It is worth remembering that the island nation is weathering the economic storm well relative to other economies around the world.