David King & Co., Attorneys at Law
Belleville Corporate Centre
#38 Pine Road
Belleville, St Michael, BARBADOS
ph: 1(246) 427 3174
fax: 1(246) 436 9541
alt: 1(246) 426 9246
daveking
Corporate
Structures
A person may carry on business in Barbados as a sole trader, a partnership, a company or a Society with Restricted Liability (SRL). With the exception of the SRL and External Company, all of the entities described on this page are first incorporated under the Companies Act of Barbados and are then licensed under the relevant enabling legislation. The following are companies which can be incorporated and then licensed under the Companies Act of Barbados, which is modelled after the Canadian Business Corporations Act:
International Business Company
The main corporate entity in the financial sector in Barbados is the international business company (IBC).
An international business company (IBC) is a company which is specifically designed to engage in the business of international manufacture or international trade or commerce from Barbados, but whose sphere of operations is outside of the English-speaking Caribbean region.
Exempt Insurance Company (captive)
Exempt Insurance business is the business of insuring risks located outside Barbados by a company whose equity is owned by persons resident outside the Caribbean Community. It includes the business of an underwriter, broker, agent, dealer or sales person in respect to that business.
An Exempt Insurance Company ("EIC") offers the following benefits and international tax planning advantages.
Offshore Bank
An eligible company, or qualified foreign bank requires a licence from the Minister of Finance before it may carry on the business of offshore banking. This sector is supervised by the Central Bank of Barbados through which applications for licences are made.
Offshore banks are taxed on a reducing scale from 2.5% to 1% per annum. There are no other direct tax or capital gains tax on the profits or gains of the bank and no tax is levied on distributions to a non-resident person or another licensee, nor on the transfer of its assets or securities.
Offshore banks also enjoy a number of other specific tax and exchange control exemptions and concessions including the absence of controls on interest rates.
Society with Restricted Liability
An SRL is neither a company nor a partnership. It is an entity designed to take advantage of the significant benefits that can be achieved in the US through the use of hybrid non-US entities characterised under local legislation as corporations but treated as partnerships under US tax legislation. It is similar in many respects to the limited liability companies found in civil law jurisdictions.
An SRL has the following characteristics:
Ariel view of Bridgetown
External Company
An 'external company' is defined in section 324(1)(a) of the Companies Act Cap.308 as "any incorporated or unincorporated body formed under the laws of a country other than Barbados".
To formally establish a legal presence within the jurisdiction of Barbados, an external company must be registered in Barbados in order to carry on any business or undertaking in Barbados. This requirement for registration formally subjects the 'external company' to the provisions of the Companies Act, Cap. 308 and enables the Registrar of Companies to ensure that its entry into the commercial scene in Barbados will not result in confusion with the operations of existing businesses already on the register.
Segregated Cell Company
A Segregated Cell Company is a separate legal entity whose assets can be allocated to different cells within the company which are kept separate from each other. Each cell is only liable for its own debts and not for the debts of any other cell within the company. Where assets have been allocated to a cell, only creditors who have entered into transactions with that cell or who have otherwise become creditors of the cell concerned have recourse against those assets. There is a duty on the directors to keep the assets of each cell separately identifiable.
Qualifying Insurance Company
To become a Qualifying Insurance Company, a company or branch must register under the Insurance Act and apply for a certificate of qualification.
To complete this process, the company or branch must submit to the Supervisor of Insurance an application for registration containing the same basic information as for an exempt insurance licence, supported by therelevant documents.
Where the Supervisor is satisfied that at least 90% of the company’s or branch’s premiums do, or will, originate outside of CARICOM, and that at least 90% of its risks insured are located outside of this same Region, a certificate of qualification will be issued.
Note: Since it is registered under the Insurance Act the same as a local insurance company, a Qualifying Insurance Company is required to file a tax return and financial statements in the same manner as a local company
David King & Co., Attorneys at Law
Belleville Corporate Centre
#38 Pine Road
Belleville, St Michael, BARBADOS
ph: 1(246) 427 3174
fax: 1(246) 436 9541
alt: 1(246) 426 9246
daveking
