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Form a Barbados International Business Company (IBC) Introduction
Barbados is well known for its offshore corporation industry and as an ideal jurisdiction which foreigners use to set up International Business Companies (IBC). It has a law specifically regulating IBC’s called the “International Business Companies Regulations” enacted in 1992. This law allows foreigners to form IBCs as companies licensed to conduct business in commerce, trade, or manufacturing within its country for customers living in other countries. A Barbados IBC cannot conduct a business which sells goods and services within its borders. This is why an IBC is the perfect platform to engage in any type of international commerce outside of Barbados and is the most popular offshore company to form in Barbados by foreigners.
Barbados is an island country located in the Lesser Antilles near the Caribbean Sea on the North Atlantic Ocean. With only a population estimated at 290,000 people, Barbados is a former United Kingdom (UK) colony and gained its independence in 1966. Currently, it is a member for the British Commonwealth.
In 2017, Barbados is the most developed and wealthiest country in the Eastern Caribbean region with its highest per capita income. Its economic success derives from its strong tourism and financial services industry attracting investors from all over the world.
Barbados IBC Benefits
Barbados International Business Company (IBC) receives several benefits including:
Formation of an IBC in Barbados
To form an IBC in Barbados, the applicant needs to submit the following documents: Articles of Incorporation, Request for Name and Notices of Directors and Registered Address to the Registrar of Companies. In addition, a Memorandum specifying the company’s business activities and an Articles of Association specifying the rules governing the internal management of the company must be filed. A Certificate of Incorporation will be issued by The Registrar whereby the IBC exists from the date on the Certificate. After receipt of the Certificate of Incorporation, an application must be made with the Barbados Ministry of Finance for an International Business Company license.
IBC’s are required to only select a company name which does not resemble other company or corporation names in Barbados.
Office Address and Local Agent
IBC’s must have a local office address. While a registered agent is not required, the IBC should have a licensed company secretary.
Only one shareholder is required for an IBC.
Directors and Officers
IBC’s must have at least one director who can be of any nationality and does not have to be a local resident and can be a corporation. A company secretary is required who must be licensed and can be an individual or a company.
There is no minimum authorized capital requirement.
Income taxes for company profits are based on a sliding scale starting at 2.5% for profits under $5 million USD to 0.25% for over $15 million USD. A Tax Credit allows for IBC’s who pay taxes outside of the country to be credited against Barbados taxes owed which can reduce the tax to the minimum 0.25% rate. Also, there is no capital gains tax.
IBC’s owned by a Barbados Offshore Trust and managed in accordance with the International Financial Services Act receive a zero income tax rate under Chapter 325 of the Act.
Annual tax returns are required. Companies and corporations whose year end is before September 30th must file by the following March 15th. All others must file by the following June 15th.
The initial government fee to form an IBC is $390 USD. In addition, in order to obtain a license to conduct international business there is an application fee of $125 USD plus $500 USD for the license. In addition there will be a registered agent and formation fee.
IBC’s must file a specific form to renew its license with the Ministry of International Business. As of this writing the renewal fee is $500 USD plus the registered agent fee and the filing must be completed by December 31st. If the IBC fails to file by February 1st, the license will be cancelled.
Barbados public records are open to the public to review and purchase copies. However, the names of owners and shareholders can remain private by using nominees.
Accounting and Audit Requirements
IBC’s must maintain adequate accounting books and records. A licensed local auditor must be hired if the IBC’s gross assets or revenues are $2 million USD or more.
The Institute of Chartered Accountants of Barbados sets the accounting standards. If required, audited financial statements must be filed with the Ministry of International Business. The law allows for an audit only of IBC’s whose assets or revenues amount to over $500,000 USD.
Annual General Meeting
Annual meetings are required which can be held anywhere and owners can be represented by proxy. The registered Barbados office must keep records of all meeting minutes and resolutions by the owners and directors.
Time Required for Incorporation
It is estimated that an IBC can complete the registration process within 5 business days.
Shelf IBC’s are available in Barbados to speed up registration time.
Form a Barbados International Business Company (IBC) Conclusion
A Barbados International Business Company (IBC) receives several benefits including: low income tax with maximum rate of 2.5%, no capital gains tax, a zero income tax rate exception for an IBC owned by a Barbados Offshore Trust, numerous other tax exemptions, no currency exchange controls, 15 years of benefits and exemptions guarantee, no minimum authorized capital, and English is the official language.