Barbados and Canada have very strong international business relations with the island which acts as a business center for offshore Canada. The strong relationship between the two countries goes back to British colonial times and has developed into an important partnership for the two countries.
Barbados – Canada Relationship Facts
Canada provides the largest source of Foreign Direct Investment for the Barbadian economy
Barbados is the third largest recipient of Canadian international investment after the U.S. and AK.
Canadians represent 75% of the international financial community in Barbados
Canadian banks with a strong presence in Barbados include RBC Royal Bank, Scotiabank and CIBC FirstCaribbean Bank.
Barbados – Canada Tax Treaty Benefits
The Barbados – Canada tax treaty has been in place for over three decades and plays a key role in facilitating the close international business relationship between the two countries. The treaty means that Canadian companies registered in Barbados may legally benefit from the many advantages granted to international businesses registered on the island.
The treaty offers the following benefits to Canadian companies registered in Barbados:
A low tax rate of 2.5% down to 1% on taxable profits
Capital gains are tax exempt
No withholding taxes on royalties, dividends, interest or management fees for non-residents
No exchange controls on foreign currency transactions
Free from import duties and taxes on machinery, materials, factories and equipment
There are no capital requirements
Additional benefits offered by Barbados as an international business center include:
A highly educated workforce is available to provide management, accounting and legal services
Well-developed infrastructure including an extensive road network, international airports and high-quality telecommunications services
Many tax treaties around the world allow businesses to benefit from a network of international agreements
Long-term political and economic stability
Low cost to register and run an international business
Offshore Business Qualification Requirements
For Canadian companies to take advantage of the great benefits offered by registering an offshore business in Barbados, the new business must meet the following requirements to satisfy Barbadian regulations and those of the Canada Revenue Agency:
Mind and management must be located in Barbados
Registered as an International Business Company
The majority of the Board of Directors should be non-residents of Canada
Annual board meetings in Barbados
May trade worldwide, but restricted from selling goods in Barbados and Canada
Employees must be located in Barbados, not in Canada
An annual audit is required for companies with revenues or assets of more than US $ 500,000
Low Cost, Great Value!
The costs required to establish offshore in Barbados are relatively low. The total cost of establishment, legal advice and total registration fee is between US $ 2,500 and US $ 5,000.
The annual fee to run a business, pay licensing fees and conduct audits if necessary can amount to US $ 20,000.
This is a fantastic value for businesses who want to develop international business. Choosing Barbados means that Canadian businesses can legally reduce their international tax burden in a safe and well-regulated business environment.
This great combination of factors is the reason that Barbados is the top Caribbean offshore destination for Canadian international business and foreign direct investment.