Business Barbados - 2023 Edition

Awaiting a Date for Entry into Force The Barbados/Slovak Republic DTA was signed on October 28th, 2015. Barbados and the Slovak Republic have completed their ratification procedures. Barbados is awaiting official notification from the Slovak Republic on the determination of the date for entry into force of the Agreement. The Protocol to the Barbados/Republic of Mauritius DTA was signed on December 6th, 2017. Barbados and Mauritius have completed their ratification procedures. Barbados is awaiting official notification from Mauritius on the determination of the date for entry into force of the Agreement. Awaiting ratification Three(3) DTAs and one Protocol await ratification and are outlined below: The Barbados/Ghana DTA was signed on April 22nd, 2008. Barbados has completed its ratification procedures and awaits official notification from Ghana on the status of their ratification procedures. The Protocol to the Barbados/Botswana DTA. This was signed on September 4th, 2014. Barbados has completed its ratification procedures and awaits official notification from Botswana on the status of its ratification procedures. The Barbados/Kenya DTA was signed on December 11, 2019 and is awaiting ratification. Awaiting signature Three (3) initialled DTAs with Malaysia, Belgium and Vietnam are awaiting signature. In January 2018, Barbados signed on to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Sharing (MLI). Barbados has deposited its Instrument of Ratification for the Multilateral BEPS Convention which has entered into force on April 1, 2021. Countries indicated with an asterisk (*) above are also signatories of a Bilateral Investment Treaty (BIT) with Barbados. This combination of double taxation, investment treaties and tax incentives make Barbados unique within the Caribbean and particularly attractive to foreign investors. As indicated in the previous table, in addition to its extensive network of DTAs, Barbados also has BITs with several important jurisdictions. These BITs provide benefits and protections for cross border investments including: • Investment promotion and protection • Provision of compensation for losses • The granting of most-favoured nation and national treatment provisions • Protection from unfair expropriation and nationalisation of investment • Procedures for the fair and equitable settlement of disputes arising • Procedures for the timely repatriation of investment and returns • Procedures for prompt transfer of funds • Subrogation Note that Barbados has also entered into a BIT with Germany. BITs are also pending with Ghana and Luxembourg and are awaiting ratification. TRADING PARTNERS Special trading arrangements have been entered into with other jurisdictions. These can be summarised as follows: CARICOM Allows products manufactured in Barbados and other CARICOM member states to be exported among member countries free of customs duty, provided all qualifying conditions are met. In addition, CARICOM has already signed or is currently negotiating trade agreements with the Bahamas, Colombia, Costa Rica, Cuba, Dominican Republic, and Venezuela. ECONOMIC PARTNERSHIP AGREEMENT Among other things this agreement removes all quotas and tariffs from Caribbean exports to the EU, with the exception of sugar and rice, both of which will be liberalized over time. The EU has also agreed to open up new markets for Caribbean companies and professionals offering services to Europe, and to permit young services professionals to gain work experience in the European market. Caribbean countries which are signatory to the agreement have agreed to gradually open their markets to European exports over the next 25 years. CARIBBEAN BASIN TRADE PARTNERSHIP ACT (CBTPA) Duty free export of some products to the USA market. CaribCan (Caribbean-Canada) Duty free export of some products from the Commonwealth Caribbean into the Canadian market. REAL ESTATE Buying and selling property in Barbados There is no restriction on the purchase of property in Barbados by persons who are not citizens or permanent residents. These funds must be registered with the Central Bank of Barbados and the permission of the Exchange Control Authority obtained for the sale or purchase of property by a non-resident whether such non-resident is a Barbadian citizen or not. The sale of property by all persons including citizens or permanent residents is subject to a property transfer tax of 2.5% plus approximately 1% stamp duty. However, the first US$75,000 of the sale proceeds is exempt from Property Transfer Tax provided that there is a building on the property. Attorney’s fees for both the seller and the purchaser are on a sliding scale generally ranging between 1% and 2% depending the sale price of the real estate. Note that this is only the minimum fee that may be charged. Note that in the case of registered land the minimum fee for the sale of registered land is 2/3 or 1/3 of the cost for a normal conveyance (above) depending on if acting for vendor or purchaser. However, the vast majority land on the island is not registered as yet. The real estate agent’s commission fees are normally 5% of the sale. The scale is: Up to Bds $25 000 $750/$1000 On the next Bds $75 000 2.00% On the next Bds $100 000 1.50% On the next Bds $300 000 1.25% Thereafter 1.00% 129 BUSINESS BARBADOS 2023 B U S I N E S S B A R B A D O S F A C T F A C T S G U I D E 2 0 2 3