International Business Companies (IBC's)
The International Business Companies Act allows companies to benefit from a low corporate tax rate on business channeled through Barbados and take advantage of Barbados` network of tax treaties. Canadian companies in particular are attracted to Barbados because it is a designated treaty country and Canadian owned IBC`s can repatriate profits from its exempt surplus free of Canadian tax. In order to enjoy these benefits, the business of the IBC must be deemed active as defined by Canadian tax rules.
Tax Incentives for IBC`s
Other Benefits Granted to IBC's
- Dividends paid to a Canadian company are exempt of Canadian tax (conditional)
- Tax rates are a maximum of 2.5% and a minimum of 0.25%
- No minimum capital requirements
- Foreign tax credit (conditional)
- No capital gains tax
- Employment of overseas specialists
- Import duty concessions
- Simple licensing
- Annual license fee of $450 U.S.
- Exempt from exchange control regulations
- Confidentiality - non U.S. customer information is not released to any third parties except as required by law
Companies in Barbados are regulated under the Companies Act of 1982. Companies are required to keep accounting records and an audit must be done if the company's assets exceed $500,000 U.S.
Double Taxation Agreements
Barbados has double taxation agreements with the United Kingdom, Canada, Finland, Norway, Sweden, Switzerland, the United States, Venezuela, China & Caricom Countries.
Advantages of Having a Company in Barbados
- Low taxes
- Excellent telecommunications systems
- Professional service providers
- Highly-educated workforce
- Well-established banking system