3. Legal Regime
Transparency of the Regulatory System
Barbados’ legal framework establishes clear rules for foreign and domestic investors regarding tax, labor, environmental, health, and safety concerns. These regulations are in keeping with international standards. The Ministry of Finance, Economic Affairs and Investment and Invest Barbados provide oversight aimed at ensuring the transparency of investment.
Rulemaking and regulatory authority rest with the bicameral parliament of the government of Barbados. The House of Assembly consists of 30 members who are elected in single-seat constituencies. The Senate consists of 21 members who are appointed by the Governor General. Responsibility for Senate appointments is expected to shift in the second half of 2021 when Barbados intends to remove the UK’s Queen Elizabeth as head of state and becomes a republic.
Foreign investment into Barbados is governed by a series of laws and implementing regulations. These laws and regulations are developed with the participation of relevant ministries, drafted by the Office of the Attorney General, and enforced by the relevant ministry or ministries. Additional compliance supervision is delegated to specific agencies, by sector, as follows:
- Banking and financial services – Central Bank of Barbados (CBB)
- Insurance and non-banking financial services – Financial Services Commission (FSC)
- International business – International Business Unit, Ministry of International Business and Industry
- Business incorporation and intellectual property – CAIPO
The Ministry of Finance, Economic Affairs and Investment monitors investments to collect information for national statistics and reporting purposes.
All foreign businesses must be registered or incorporated through CAIPO and will be regulated by one of the other agencies depending on the nature of the business.
Although Barbados does not have legislation that guarantees access to information or freedom of expression, access to information is generally available in practice. The government maintains a website and an information service to facilitate the dissemination of information such as government office directories and press releases. The Government Information Service (BGIS) website is available at . The government also maintains a parliamentary website at where it posts legislation prior to parliamentary debate and live streams House sittings. The government budget is also available on this website.
Although some bills are not subject to public consultation, input from various stakeholder groups and agencies is enlisted during the initial drafting of legislation. Public awareness campaigns, through print and electronic media, are used to inform the general public. Copies of regulations are circulated to stakeholders and are published in the Official Gazette after passage in parliament. The Official Gazette is available at .
Accounting, legal, and regulatory procedures are transparent. Publicly listed companies publish annual financial statements and changes in portfolio shareholdings, including share value. Service providers are required to adhere to international best practice standards including International Financial Reporting Standards, International Standards on Auditing, and International Public Sector Accounting Standards for government and public sector bodies. They must also comply with the provisions of the Money Laundering and Financing of Terrorism Prevention and Control Act. Accounting professionals must engage in continuous professional development. The Corporate and Trust Service Providers Act regulates Barbados financial service providers. Failure to adhere to these laws and regulations may result in the revocation of the business license and/or cancellation of work permit(s). The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Barbados to be largely compliant.
The Office of the Ombudsman is established by the constitution to guard against abuses of power by government officers in the performance of their duties. The Office of the Ombudsman aims to provide quality service in an impartial and expeditious manner when investigating complaints by Barbadian nationals or residents who consider the conduct of a government body or official unreasonable, improper, inadequate, or unjust.
The Office of the Auditor General is also established by the constitution and is regulated by the Financial Administration and Audit Act. The Auditor General is responsible for the audit and inspection of all public accounts of the Supreme Court, the Senate, the House of Assembly, all government ministries, government departments, government-controlled entities, and statutory bodies. The Office of the Auditor General’s annual reports can be found on the parliament of Barbados website.
International Regulatory Considerations
The OECD recognized Barbados as largely compliant with international regulatory standards. Barbados is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the Multilateral Competent Authority Agreement, and the Multilateral Convention to Implement Tax Treaty Related Matters to Prevent Base Erosion and Profit Sharing.
The Barbados National Standards Institution (BNSI) oversees a laboratory complex housing metrology, textile, engineering, and chemistry/microbiology laboratories. The primary functions of the BSNI include the preparation, promotion, and implementation of standards in all sectors of the economy, including the promotion of quality systems, quality control, and certification. The Standards Act (2006) and the Weights and Measures Act (1977) and Regulations (1985) govern the work of the BNSI. In February, BSNI launched a project intended to enhance metrology capacity in concert with a draft bill that would upgrade the organization’s governance structure and laboratory systems to bring them in line with international testing and certification standards. As a signatory to the World Trade Organization (WTO) Agreement to Technical Barriers to Trade, Barbados, through the BSNI, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.
Barbados ratified the WTO Trade Facilitation Agreement in 2018. With full implementation, the Agreement improves the speed and efficiency of border procedures, facilitates trade costs reduction, and enhances participation in the global value chain. In 2019 Barbados implemented the Automated System for Customs Data, which streamlined document compliance and inspections by port authorities. The government also increased issuance fees for certificates of origin, making trade more expensive. In the 2020 World Bank Doing Business report, Barbados is ranked 132nd out of 190 countries for trading across borders.
Legal System and Judicial Independence
Barbados’ legal system is based on the British common law. Modern corporate law is modeled on the Canadian Business Corporations Act. The Attorney General, the Chief Justice, junior judges, and magistrates administer justice in Barbados. The Supreme Court consists of the Court of Appeal and the High Court. The High Court hears criminal and civil (commercial) matters and makes determinations based on interpretation of the constitution.
The Caribbean Court of Justice (CCJ) is the regional judicial tribunal. The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas (RTC). In 2005, Barbados became a full member of the CCJ, making the body its final court of appeal and original jurisdiction of the RTC.
The United States and Barbados are both parties to the WTO. The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.
Laws and Regulations on Foreign Direct Investment
Invest Barbados’ foreign direct investment policy is to promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors. The main laws concerning investment in Barbados are the Barbados International Business Promotion Act (2005), the Tourism Development Act (2005), and the Companies Act. There is also a framework of legislation that supports the jurisdiction as a global hub for business including insurance, shipping registration, and wealth management.
All proposals for investment concessions are reviewed by Invest Barbados to ensure proposed projects are consistent with the national interest and provide economic benefits to the country.
Invest Barbados provides complimentary “one-stop shop” facilitation services for investors to guide them through the investment process. It offers a website useful for navigating the laws, rules, procedures, and registration requirements for foreign investors: .
Competition and Antitrust Laws
Chapter 8 of the RTC outlines the competition policy applicable to CARICOM states. Member states are required to establish and maintain a national competition authority for facilitating the implementation of the rules of competition. At the CARICOM level, a regional Caribbean Competition Commission (CCC) applies the rules of competition. The CARICOM competition policy addresses anticompetitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within the Community and actions by which an enterprise abuses its dominant position within the Community. The Fair Competition Act codified the establishment of the Barbados Fair Trading Commission (FTC) in 2001. The FTC is responsible for the promotion and maintenance of fair competition participates in the CCC. The FTC regulates the principles, rates, and standards of service for public utilities and other regulated service providers. The Telecommunications Act regulates competition in the telecommunications sector.
Expropriation and Compensation
The Barbados constitution and the Companies Act (Chap. 308) contain provisions permitting the government to acquire property for public use upon prompt payment of compensation at fair market value. U.S. Embassy Bridgetown is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in Barbados.
ICSID Convention and New York Convention
The government of Barbados wrote the New York Convention’s provisions into domestic law but did not ratify the convention. The Arbitration Act (1976) and the Foreign Arbitral Awards Act (1980), which recognizes the 1958 New York Convention on the Negotiation and Enforcement of Foreign Arbitral Awards, are the main laws governing dispute settlement in Barbados.
Barbados is also a member of the International Center for the Settlement of Investment Disputes (ICSID), also known as the Washington Convention. Individual agreements between Barbados and multilateral lending agencies also have provisions calling on Barbados officials to accept recourse to binding international arbitration to resolve investment disputes between foreign investors and the state.
Investor-State Dispute Settlement
The Barbados Arbitration Act (1976) and the Foreign Arbitral Awards Act (1980) provide for arbitration of investment disputes. Barbados does not have a bilateral trade treaty or a free trade agreement with an investment chapter with the United States. U.S. Embassy Bridgetown is not aware of any current investment disputes in Barbados.
Barbados ranks 170th out of 190 countries in enforcing contracts according to the 2020 World Bank Doing Business Report. Dispute resolution in Barbados generally takes an average of 1,340 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolutions of commercial disputes. Through the Arbitration Act of 1976, local courts recognize and enforce foreign arbitral awards issued against the government. In 2019, the Supreme Court of Judicature Act was amended to include the establishment of a commercial division in the High Court which will oversee proceedings regarding arbitration. The U.S. Embassy does not know of recent cases of investment disputes in Barbados involving U.S. or other foreign investors.
International Commercial Arbitration and Foreign Courts
The Supreme Court of Barbados is the domestic arbitration body. Local courts enforce foreign arbitral awards. In 2019, two new court protocols in the Supreme and Magistrate courts were introduced for alternative dispute mechanisms in mediation and arbitration to be available to judges and attorneys for the remediation of civil matters.
Under the Bankruptcy and Insolvency Act (2002), Barbados has a bankruptcy framework that recognizes certain debtor and creditor rights. The Act gives a potentially bankrupt company three options: bankruptcy (voluntary or involuntary), receivership, or reorganization of the company. The Companies Act provides for the insolvency and/or liquidation of a company incorporated under this Act. In 2019, the Supreme Court of Judicature Act was amended to include the establishment of a commercial division in the High Court which will oversee proceedings connected to bankruptcy and insolvency. Barbados ranked 35th out of 190 countries in resolving insolvency in the 2020 World Bank Doing Business Report.
11. Labor Policies and Practices
Barbados’ labor force was 147,344 people at the end of December 2020. In the first quarter of 2021, the total average unemployment rate was approximately 40 percent, an increase of 30 percent from the same period the previous year due to ongoing economic distress caused by the COVID-19 pandemic. The anticipated recovery in tourism in the second half of 2021 is projected to fall significantly short of earlier expectations. The country’s economy and the tourism industry are not expected to recover to pre-pandemic levels until 2024.
Labor regulations in Barbados are guided by a framework of laws including the Holidays with Pay Act, the Sick Leave Act, the Public Holidays Act, and the Protection of Wages Act, as well as policies regarding maternity leave, national insurance (social security) contributions, unemployment benefits, and severance pay. Barbados has ratified the eight core conventions of the International Labor Organization (ILO). Barbados upholds the ratified conventions and is guided by the ILO’s other conventions.
Wages in Barbados are some of the highest in the Caribbean. Minimum wages are administratively established for only a few categories of workers and are enforced by the Ministry of Labour’s Labour Department. The minimum wage for shop assistants is currently 3.13 USD (6.26 Barbados dollars) per hour. The Ministry of Labour recommends that companies recognize this as the de facto minimum wage, though most employees earn more than this. The government has proposed raising this to 4.25 USD (8.50 Barbados dollars) per hour before the middle of 2021.
The standard legal workweek is 40 hours in five days, and the law provides employees with three weeks of paid holiday for persons with less than five years’ service and four weeks of paid holiday leave after five years’ service. The law requires overtime payment of time and a half for hours worked in excess of the legal standard and prescribes that all overtime must be voluntary. The law does not set a maximum number of overtime hours. Workers are covered by unemployment benefits legislation and national insurance legislation after 52 weeks of continuous employment. The government sets occupational safety and health standards.
Workers are legally allowed to form and join unions and conduct strikes, but there is no specific legal recognition of the right to collective bargaining. Most major employers choose to recognize unions when more than 50 percent of employees request recognition. Smaller companies are less frequently unionized. Companies are sometimes hesitant to engage in collective bargaining with recognized unions, but in most instances they eventually do so. The law prohibits antiunion discrimination and protects workers engaged in union activity. Private-sector employees can strike, but strikes are prohibited by workers in essential services such as police, firefighting, electricity, and water.
In general, the government effectively enforces labor laws, and penalties are sufficient to deter violations. The law gives employees the right to have allegations of unfair dismissal tried before the Employment Rights Tribunal, but the process often has lengthy delays. Workers’ rights are generally respected. Unions receive periodic complaints of violations of collective bargaining agreements, but most complaints are resolved through established mechanisms.
The law provides for a minimum working age of 16. Compulsory primary and secondary education policies reinforce minimum age requirements. The Labour Department has a small cadre of labor inspectors who conduct spot investigations of enterprises and check records to verify compliance with the law. These inspectors may take legal action against an employer who is found to have underage workers.
Under the Severance Payments Act, an employer is obligated to pay an employee a severance payment where the employee is terminated on account of redundancy. The Employee Rights Act, section 31, provides that dismissal of an employee on account of redundancy does not contravene the right not to be unfairly dismissed. Qualifying workers who are laid off for economic reasons are generally entitled to receive a severance payment on a graduating scale that starts at 2.5 weeks’ pay for every completed year of employment. All unemployed workers are eligible for unemployment benefits upon meeting the qualifying contribution periods established by the National Insurance and Social Security scheme.
The Occupational Health at Work Act governs the general health and safety of workers in all workplaces except the armed forces and private household domestic service. The law requires firms employing more than 50 workers (fewer in certain sectors) to create a safety committee that may challenge the decisions of management concerning occupational safety and health. The Labour Department also enforces health and safety standards and follows up to ensure that management corrects problems. Trade union monitors can identify safety problems for government factory inspectors. The Labour Department’s Inspection Unit conducts routine annual inspections of government-operated corporations and manufacturing plants. Workers have the right to remove themselves from dangerous or hazardous job situations without jeopardizing their continued employment.