Tax Haven Barbados



Barbados is the most easterly of Caribbean Islands. The island nation is a popular tourist destination among holiday and fun seekers from Europe, the United States and Canada. The dozens of white sand beaches and the perfect temperature on the island keeps people coming year round. Barbados also has a vibrant offshore financial service providing incorporation of offshore corporations or International Business Companies, offshore banking and exempt insurance are just some of the services offered.


The offshore jurisdiction of Barbados falls under the category of low tax haven. Barbados as a tax haven has a very low tax regime in place for offshore corporations incorporated in the jurisdiction. A tax haven can be described as a territory which has zero or low tax schemes in place. Most tax havens of the world also qualify as offshore jurisdictions.


Tax haven Barbados allows for the incorporation of International Business Companies - IBC. Barbados offshore companies are very attractive to foreigners for the obvious tax benefits which they present. Incorporating an International Business company in the tax haven of Barbados takes very little time. Such offshore business entities incorporated in the tax haven of Barbados must pay annual taxes to the government.


Tax haven Barbados taxes its International Business Companies on its annual profits. The taxes levied on Barbados offshore companies ranges from 1-2.5%. In tax haven Barbados an offshore company with annual profits of between Barbados Dollars (BDS) $ 10,000 pay corporate taxes at a rate of 2.5%. Offshore companies who make annual profits between BDS$ 10,000 and BDS$ 20,000 will be charged with taxes at a rate of 2%. An International Business Company registered in Barbados with annual profits higher that BDS$ 20,000 but no more that BDS$ 30,000 will be charged at 1.5%. All Barbados offshore companies with profits in excess of BDS$ 30,000 will pay taxes of 1% of its annual profits.


International Business Companies incorporated in tax haven Barbados can have their annual taxes reduced by taking credit for foreign taxes paid. It must be noted that the credit taken for foreign taxes must not reduce the Barbadian tax paid to less than one (1%) per cent. Tax haven Barbados allows offshore business entities to import machinery and equipment which will be used to facilitate their business operations without duty.


Tax haven Barbados provides non residents with tax advantage. International Business companies or non residents of Barbados will pay no withholding taxes for income earned from another offshore company or non resident of the jurisdiction. Income earned can be rent, interest, rents collected, and management funds among other types of income. The tax haven of Barbados allows for the transfer of shares from one offshore business entity to the next or from one nonresident to the next without the payment of any type of tax or duty.


The low tax haven of Barbados is very attractive for Canadians. Canadian Companies with foreign subsidiaries or branches pay no taxes on dividends paid to the main branch in Canada. Barbados is an attractive low tax haven for Canadian companies since they will already be paying low taxes offshore and none will be paid in Canada. The tax havens of Barbados help Canadian offshore companies reduce their tax liabilities.


Apart from corporate taxes all International business companies registered in the low tax haven of Barbados are obligated by the International Business Companies Act to pay an annual license fee to the government of Barbados. The annual license fee paid by Barbados International Business companies is set at US$ 425 per annum. Offshore business entities in Barbados must present to the relevant authorities in Barbados its annual financial statements. This is filed with the Ministry of Finance. The offshore companies in Barbados must also file their tax returns. Offshore business companies in Barbados with an annual turnover of more than one (1) million Barbados Dollars must file audited annual reports. These reports must be done by an accountant or accounting firm recognized by the Barbados Chartered Accountants Institute.


Offshore clients must take note that the tax haven of Barbados has signed double tax agreements with many countries. This includes Canada, the United States of America, the United Kingdom, CARICOM countries, Sweden, Switzerland, Venezuela, and Cuba among other countries.


The low tax haven of Barbados helps individuals and International Business companies reduce tax liabilities. Offshore companies registered in tax haven Barbados benefit form very low taxation and zero withholding taxes applied to profits and capital gained. As a tax haven the offshore jurisdiction of Barbados has laws in place which protects the assets of individuals and corporations. One of the main features of offshore tax havens is their ability to provide clients with legal means to reduce tax liabilities and Barbados as a tax havens gives clients just that; a safe environment to invest in while making huge tax savings.


Get to top