Barbados is the largest economy in the Eastern Caribbean. Barbados’ Gross Domestic Product (GDP) was 4.63 billion USD (9.26 billion Barbados dollars) in 2020. This represents an 11.6 percent drop from 2019 due to the impact of COVID-19 on the country’s tourism-dependent economy. Short-term forecasts project a slow recovery throughout 2021, with a gradual return to pre-pandemic levels by 2024. Unemployment was estimated at about 40 percent in the first quarter of 2021, representing a 30 percent increase from the same period a year prior.
The government of Barbados entered a standby arrangement with the International Monetary Fund (IMF) in late 2018. The 290 million USD (580 million Barbados dollars) Barbados Economic Recovery and Transformation (BERT) program aims to decrease the debt-to-GDP ratio, strengthen the balance of payments, and stimulate growth. While the government was on track to meet its IMF targets pre-pandemic, the program dampened income and spending power due to public sector layoffs, the introduction of new indirect taxes, and a decline in the construction sector. The impact of the pandemic required the IMF to adjust the program targets downwards several times. The IMF also approved additional lending into the program twice in 2020.
Barbados ranks 128th out of 190 countries rated in the 2020 World Bank Doing Business Report. The report highlighted some positive changes in getting access to electricity, trading across borders, and enforcing contracts but noted that registering property has become more difficult. The services sector continues to hold the largest growth potential, especially in the areas of international financial services, information technology, global education services, health, and cultural services. The gradual decline of the sugar industry has opened land for other agricultural uses. Investment opportunities exist in the areas of agricultural processing and alternative and renewable energy. Uncertainty about the trajectory of economic recovery of the tourism, commercial aviation, and cruise industries impacts the potential for projects in those sectors. The government has identified renewable energy and climate resilience projects as top priorities.
Barbados recently revised its tax regime to harmonize its domestic and international tax rates. This was in response to an Organization of Economic Cooperation and Development (OECD) initiative that addressed harmful tax practices. Some acts were repealed or amended, and some new measures were introduced. For further details, see .
Barbados bases its legal system on the British common law system. It does not have a bilateral investment agreement with the United States, but it does have a double-taxation treaty and a tax information exchange agreement.
In 2015, Barbados signed an intergovernmental agreement in observance of the United States’ Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Barbados to report the banking information of U.S. citizens.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The government of Barbados, through Invest Barbados, welcomes foreign direct investment with the stated goals of creating jobs, earning foreign exchange, transferring technology, enhancing skills, and contributing to economic growth. In 2021, the government announced plans to focus on encouraging foreign direct investment in renewable energy, manufacturing, technology, and biogenetic engineering.
Barbados encourages investment in the following key sectors: international financial services, information technology, and ship registration, as well as developing areas like financial technology, creative industries, agricultural processing, medical schools, medical tourism, and renewable energy. In the international financial services sector, the government maintains regulatory oversight via the Central Bank of Barbados to prevent money laundering and tax evasion.
Through Invest Barbados, the government facilitates domestic and foreign private investment. Invest Barbados’ mandate is to actively promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors. Invest Barbados also provides customized support for investors to assist with the expansion and sustainability of the initial investment. It also serves as the primary liaison for existing investors. In April 2020, the government established a Jobs and Investment Council charged with supporting economic activity during the COVID-19 pandemic and post-pandemic recovery. In March 2021, the government announced plans to establish a Barbados Free Zone to help attract foreign direct investment.
Investors interested in doing business in Barbados must register in person with the country’s Corporate Affairs and Intellectual Property Office. While this is a requirement for foreign and domestic investors, the continuing barriers to international travel posed by COVID-19 currently make it more difficult for foreign investors without established local partners and legal representation to comply with this requirement. The government of Barbados has announced plans to fully digitize the registration process before the end of 2021.
Limits on Foreign Control and Right to Private Ownership and Establishment
There are no limits on foreign control in Barbados. Nationals and non-nationals may establish and own private enterprises and private property in Barbados. These rights extend to the acquisition and disposition of interests in private enterprises.
No industries are closed to private enterprise, although the government reserves the right not to allow certain investments. Some activities, such as telecommunications, utilities, broadcasting, franchises, banking, and insurance require a government license. There are no quotas or other restrictions on foreign ownership of a local enterprise or participation in a joint venture.
Other Investment Policy Reviews
Barbados has not conducted a trade policy review in the last three years.
Invest Barbados is the main investment promotion agency that attracts and facilitates foreign investment. Invest Barbados offers guidance and direction to new and established investors seeking to pursue investment opportunities in Barbados. The process is transparent and considers the size of capital investment as well as the economic impact of a proposed project.
Invest Barbados offers a website that is useful for navigating applicable laws, rules, procedures, and registration requirements for foreign investors. This is available at . Invest Barbados’ iGuide website is an online guide which provides local and foreign investors with up-to-date information required to make certain investment decisions, including steps for setting up a business, opportunities for investment, labor and other business costs, and legal requirements, among other data. This is available at . The Corporate Affairs and Intellectual Property Office (CAIPO) maintains an online e-registry filing service for matters pertaining to the Corporate Registry. It is available to registered agents, who are usually attorneys. Information is available at .
Barbados ranks 102nd out of 190 countries in the ease of starting a business, which takes seven procedures and approximately 16 days on average to complete, according to the 2020 World Bank Doing Business report. The general practice is to retain an attorney to prepare relevant incorporation documents. The business must register with CAIPO, the Barbados Revenue Authority, the Customs and Excise Department, and any relevant sector-specific licensing agencies.
The government of Barbados continues to facilitate programs and partnerships to assist entrepreneurs who are women and/or people with disabilities. The government of Barbados remains committed to working with civil society and other organizations to meet the UN Sustainable Development Goals by 2030.
While no incentives are offered, Barbados generally encourages local companies to invest in other countries, particularly within the Caribbean region. Local companies in Barbados are actively encouraged to take advantage of export opportunities related to the country’s membership in the Caribbean Community (CARICOM) and the Caribbean Single Market and Economy (CSME). The Barbados Investment Development Corporation (BIDC) provides market development support for domestic companies seeking to enhance their export potential.
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.
4. Industrial Policies
In 2019, Barbados repealed its Fiscal Incentives Act, bringing the country into conformity with its obligations under the WTO and, in particular, the Agreement on Subsidies and Countervailing Measures. Manufacturers may still benefit from some concessions. Further information is available from Invest Barbados.
The Small Business Development Act (1999) defines a small business as having no more than 25 employees. Small businesses must be registered under the Companies Act, which applies to domestic and foreign-owned micro- and small enterprises. Small businesses are not eligible for incentives under the Tourism Development Act, the Special Development Areas Act, or the Shipping Incentives Act.
Enterprises generating export profits (other than from exports within CARICOM) may receive an export allowance expressed as a rebate of corporate tax on those profits. The maximum rebate of 93 percent applies if more than 81 percent of an enterprise’s profits result from extra-regional exports. The export development allowance permits a company to deduct from taxable income an additional 50 percent of what the company spends in developing export markets outside CARICOM.
Initial allowances or investment allowances of up to 40 percent on capital expenditure are available for businesses making capital expenditures on machinery and plants or on an industrial building or structure. The government also allows annual depreciation allowances on such expenditures.
In the tourism sector, the government’s market development allowance permits a company to deduct an additional 50 percent of what it spends to encourage tourists to visit Barbados. Under the Tourism Development Act of 2002, businesses and individuals that invest in the tourism sector can write off capital expenditures and 150 percent of interest. These entities are also exempt from import duties and environmental levies on furniture, fixtures and equipment, building materials, supplies, and equity financing. The Act expands the definition of the tourist sector beyond accommodation to include restaurants, tourist recreational facilities, and tourism-related services. The Act encourages the development of attractions that emphasize the country’s natural, historic, and cultural heritage, and encourages construction of properties in non-coastal areas.
Barbados has harmonized the legislative and tax frameworks for domestic and international companies in the international business sector. Companies conducting international business operate with a tax rate from 1 to 5.5 percent. Companies exporting 100 percent of their services or products can apply for a foreign currency permit. All corporate entities are taxed on a sliding scale:
|Taxable Income USD||Rate %|
|Up to 500,000||5.50|
|Above 500,000 to 10 million||3.00|
|Above 10 million to 15 million||2.50|
|Above 15 million||1.00|
There are no withholdings taxes on dividends, interest, royalties, or management fees paid to non-residents.
Foreign Trade Zones/Free Ports/Trade Facilitation
There are currently no foreign trade zones or free ports in Barbados.
Performance and Data Localization Requirements
Foreign investors must finance their investments from external sources or from income that the investment generates. When a foreign investment generates significant employment or other tangible benefits for Barbados, the authorities may allow the company to borrow locally for working capital. Invest Barbados may provide a training grant to qualifying manufacturing and information and communication technology enterprises during the initial operating period.
Except in the case of its medicinal cannabis industry, Barbados does not require that its citizens own shares of a foreign investor’s enterprise. Some restrictions may apply to share transfers. The Companies Act does not permit bearer shares. Foreign investors do not need to establish facilities in any specific location, although there are some zoning restrictions on residential and commercial construction for environmental reasons. There is no requirement that enterprises must purchase a fixed percentage of goods from local sources. Investors, particularly within the hospitality industry, are encouraged to use local products whenever possible.
Non-nationals seeking to work in Barbados must apply for work permits, including for all managerial and technical staff. Nationals from CARICOM member states are exempt from this requirement. The work permit is specific to the job and employer and the permit may be granted for a period of up to five years. Short-term permits of up to six months are also available. To grant a work permit, the government requires that the expatriate must bring to the job special skills or knowledge not readily available in Barbados. While work permits are generally granted to senior management, the government may restrict the number of permits approved depending on the number of people employed by the local company. There are no restrictions regarding foreign directors of boards. More information is available at .
There are no requirements for foreign information technology providers to turn over source codes and/or provide access to surveillance.
The Barbados Data Protection Act (BDPA) has awaited signature by the Governor General since 2019. If passed into law, the BDPA will create a data protection authority under a Data Protection Commissioner responsible for the general administration of the Act. The BDPA would prohibit the transfer of personal data out of Barbados unless the destination country or territory ensures an adequate level of protection for the rights and freedoms of data subjects vis-à-vis the processing of their personal data. Violations under the BDPA would be subject to fines ranging from 5,000 USD to 250,000 USD (10,000 to 500,000 Barbados dollars) and allow for criminal convictions resulting in prison sentences ranging from two months to three years.
As a member of the WTO, Barbados is party to the Agreement to the Trade Related Investment Measures.
5. Protection of Property Rights
There are no restrictions on foreign ownership of property in Barbados. Foreign investors and locals are treated equally regarding property taxes. Civil law protects physical property and mortgage claims. The CBB must verify real property purchases for non-residents. If a non-resident uses foreign funds and pays for the property in Barbados, the CBB will normally endorse the transaction. The sale of property is subject to a 2.5 percent property transfer tax in addition to a one percent stamp duty. Brokerage and legal fees are not included in these levies. Buyers should seek the advice of a local attorney when purchasing property.
Commercial, industrial, hotel, and villa properties are subject to a 0.95 percent land tax on the improved value of the property. Holders of a certificate from the Barbados Tourism Authority enjoy rebates of 50 percent for hotels and 25 percent from villas. The Commissioner of Land Tax charges an annual fee based on the assessed property value on residential property as follows: 0% on the first 75,000 USD (150,000 Barbados dollars)
- 0% on the first 75,000 USD (150,000 Barbados dollars)
- 0.1% on amounts between 75,001 USD and 225,000 USD (150,001 and 550,000 Barbados dollars)
- 0.7% on amounts between 225,001 USD and 425,000 USD (550,001 and 850,000 Barbados dollars)
- 1.0% on amounts greater than 425,000 USD (850,000 Barados dollars)
- 0.8% on vacant land under 4,000 square feet
- 1.0% on all other vacant lands
Barbados ranks 118th out of 190 countries in ease of registering property in the 2020 World Bank Doing Business Report. It takes approximately 50 days to complete seven procedures and the cost is about 4.5 percent of the property value. The government has included an additional procedure that has increased the time to record the conveyance at the Land Registry and pay transfer fees and stamp duties. This has made transferring property more onerous. The Land Registry has digitized records dating back to 1952 and plans to further digitize deeds dating back to 1640. A landowner may lose his or her title to land if a trespasser or squatter takes possession for a period of ten years.
Intellectual Property Rights
Barbados has a legislative framework governing intellectual property rights (IPR), though enforcement needs improvement. Barbados is a member of the World Intellectual Property Organization (WIPO) and is party to the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, and the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. The government of Barbados has enacted IPR legislation on topics including patents, copyrights, trademarks, industrial designs, integrated circuits topography, plant breeders’ rights, geographical indications, and protection against unfair competition. Barbados’ Trademark and Industrial Designs Act meets international standards.
Barbados remains on the Office of the United States Trade Representative (USTR) Special 301 Report Watch List in 2021. Barbados acceded to the WIPO Internet Treaties in 2019 and has convened a public-private Advisory Committee on Intellectual Property Rights to redraft its Copyright Act. Once passed by Parliament, this will enable Barbados to implement its WIPO Internet Treaties obligations. CAIPO will be reorganized into two separate entities, one for business registration and one for IPR registration. The former CAIPO director was appointed as Master of the High Court in 2020, which will deepen the court’s IPR expertise. These measures, along with the updates and upgrades to CAIPO’s database by the end of 2021, are intended to strengthen IPR enforcement.
Currently, Barbados’ judicial system is unable to provide timely and effective relief on IPR violations due to a serious case backlog across all types of civil and criminal matters. Ongoing cases include the unauthorized transmission of U.S. broadcasts and cable programming by local cable operators, including state-owned broadcasters, without adequate compensation to U.S. right holders, and the refusal of Barbadian television and radio broadcasters and cable and satellite operators to pay for public performances of music.
Article 66 of the Revised Treaty of Chaguaramas establishing the CSME commits all 15 members to implement stronger intellectual property rights protection and enforcement. The CARIFORUM-EU EPA contains the most detailed obligations regarding intellectual property in any trade agreement to which Barbados is a party. The EPA provides for protection and enforcement of IPR. Article 139 of the EPA requires parties to “ensure an adequate and effective implementation of the international treaties dealing with intellectual property to which they are parties and of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS).”
It is the responsibility of the importer to pay for and destroy counterfeit goods. Failure to observe certain standards regarding the importation of goods may result in a recommendation to the Comptroller of Barbados’ Custom and Excises Department to have the goods destroyed. If the goods fall under the Ministry of Health’s jurisdiction, they are destroyed under that ministry’s guidance. If the goods are prohibited and do not pertain to the Ministry of Health, the Customs and Excise Department will destroy them as appropriate. Information on the prevalence of counterfeit goods in the local market is not readily available, as there is no tracking method in place to collect data. Barbados is listed in USTR’s 2020 Review of Notorious Markets for Counterfeiting and Piracy.
6. Financial Sector
Capital Markets and Portfolio Investment
Barbados has a small stock exchange, an active banking sector, and opportunities for portfolio investment. Local policies seek to facilitate the free flow of financial resources, although some restrictions may be imposed during exceptional periods of low liquidity. The CBB independently raises or lowers interest rates without government intervention. There are a variety of credit instruments in the commercial and public sectors that local and foreign investors may access.
Barbados continues to review legislation in the financial sector to strengthen and improve the regulatory regime and attract and facilitate retention of foreign portfolio investments. The government continues to improve its legal, regulatory, and supervisory frameworks to strengthen the banking system. The Anti-Money Laundering Authority and its operating arm, the government’s Financial Intelligence Unit, review anti-money laundering policy documents and analyze prudential returns.
The Securities Exchange Act of 1982 established the Securities Exchange of Barbados, which was reincorporated as the Barbados Stock Exchange (BSE) in 2001. The BSE operates a two-tier electronic trading system comprised of a regular market and an innovation and growth market (formerly the junior market). Companies applying for listing on the regular market must observe and comply with certain requirements. Specifically, they must have assets of at least 500,000 USD (1 million Barbados dollars) and adequate working capital, based on the last three years of their financial performance, as well as three-year performance projections. Companies must also demonstrate competent management and be incorporated under the laws of Barbados or another regulated jurisdiction approved by the Financial Services Commission. Applications for listing on the innovation and growth market are less onerous, requiring minimum equity of one million shares at a stated minimum value of 100,000 USD (200,000 Barbados dollars). Reporting and disclosure requirements for all listed companies include interim financial statements and an annual report and questionnaire. Non-nationals must obtain exchange control approval from the CBB to trade securities on the BSE.
The BSE has computerized clearance and settlement of share certificates through the Barbados Central Securities Depository Inc., a wholly owned subsidiary of the BSE. Under the Property Transfer Tax Act, the FSC can accommodate investors requiring a traditional certificate for a small fee. The FSC also regulates mutual funds in accordance with the Mutual Funds Act.
The BSE adheres to rules in accordance with International Organization of Securities Commissions guidelines designed to protect investors; ensure a fair, efficient, and transparent market; and reduce systemic risk. Public companies must file audited financial statements with the BSE no later than 90 days after the close of their financial year. The authorities may impose a fine not exceeding 5,000 USD (10,000 Barbados dollars) for any person under the jurisdiction of the BSE who contravenes or is not in compliance with any regulatory requirements.
The BSE launched the International Securities Market (ISM) in 2016. It is designed to operate as a separate market, allowing issuers from Barbados and other international markets. To date, the ISM has five listing sponsors.
The BSE collaborates with its regional partners, the Jamaica Stock Exchange and the Trinidad and Tobago Stock Exchange, through shared trading software. The capacity for this inter-exchange connectivity provides a wealth of potential investment opportunities for local and regional investors. The BSE obtained designated recognized stock exchange status from the UK in 2019. It is also a member of the World Federation of Exchanges.
Barbados has accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement and maintains an exchange system free of restrictions on current account transactions.
Money and Banking System
The government established the Central Bank of Barbados (CBB) in 1972. The CBB manages Barbados’ currency and regulates its domestic banks.
The Barbados Deposit Insurance Corporation (BDIC) provides protection for depositors. Oversight of the entire financial system is conducted by the Financial Oversight Management Committee, which consists of the CBB, the BDIC, and the FSC. The private sector has access to financing on the local market through short-term borrowing and credit, asset financing, project financing, and mortgage financing.
Commercial banks and other deposit-taking institutions set their own interest rates. The CBB requires banks to hold 17.5 percent of their domestic deposits in stipulated securities.
Bitt, a Barbadian company, developed digital currency DCash in partnership with the Eastern Caribbean Central Bank (ECCB). The first successful DCash retail central bank digital currency (CDBC) consumer-to-merchant transaction took place in Grenada in February following a multi-year development process. The CBB and the FSC established a regulatory sandbox in 2018 where financial technology entities can do live testing of their products and services. This allowed regulators to gain a better understanding of the product or service and to determine what, if any, regulation is necessary to protect consumers. Bitt completed its participation and formally exited the sandbox in 2019. Bitt has no immediate plans to launch DCash in Barbados, and will focus first on four of Barbados’ Eastern Caribbean neighbors. Bitt also offers a digital access exchange, remittance channel, and merchant-processing gateway available via mMoney, a mobile application.
The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S., Canadian, and European banks in recent years due to concerns that the region is high-risk.
Foreign Exchange and Remittances
Barbados’ currency of exchange is the Barbadian dollar (BBD). It is issued by the CBB. Barbados’ foreign exchange operates under a liberal system. The Barbadian dollar has been pegged to the U.S. dollar at a rate of BBD 2.00: USD 1.00 since 1975. This creates a stable currency environment for trade and investment in Barbados.
Companies can freely repatriate profits and capital from foreign direct investment if they are registered with the CBB at the time of investment. The CBB has the right to stagger these conversions depending on the level of international reserves available to the CBB at the time capital repatriation is requested.
The Ministry of Finance, Economic Affairs and Investment controls the flow of foreign exchange and the Exchange Control Division of the CBB executes foreign exchange policy under the Exchange Control Act. Individuals may apply through a local bank to convert the equivalent of 10,000 USD (20,000 Barbados dollars) per year for personal travel and up to a maximum of 25,000 USD (50,000 Barbados dollars) for business travel. The CBB must approve conversion of any amount over these limits. International businesses, including insurance companies, are exempt from these exchange control regulations.
Barbados is a member of the CFATF. In 2014, the government of Barbados signed an Intergovernmental Agreement in observance of FATCA, making it mandatory for banks in Barbados to report the banking information of U.S. citizens.
Sovereign Wealth Funds
Currently, the CBB does not maintain a sovereign wealth fund. In the past, the government announced plans to create a sovereign wealth fund to ensure national wealth is available for present and future generations of Barbados. Barbadians 18 years and older are expected to gain a stake in the fund after it is established. It is envisioned that the fund will hold governmental assets, including on- and offshore real property, revenues from oil and gas products, and non-tangible assets such as trademarks, patents, and intellectual property.
7. State-Owned Enterprises
State-owned enterprises (SOEs) in Barbados work in partnership with ministries, or under their remit, and carry out certain ministerial responsibilities. There are 33 SOEs in Barbados operating in areas such as travel and tourism, investment services, broadcasting and media, sanitation services, sports, and culture. Pre-pandemic total net income was estimated at 60 million USD (120 million Barbados dollars).
SOEs in Barbados are not found in the key areas earmarked for investment. They are all wholly owned government entities. They are headed by boards of directors to which their senior management reports.
As part of the ongoing BERT program, the government of Barbados is addressing the expenditure position of the SOEs by defining clear objectives for SOE reforms, reducing the wage bill of these entities, and implementing other necessary reform measures.
Barbados does not currently have a targeted privatization program. The government has announced plans for public-private partnerships in airport management and broadcasting services, which will still see the government retaining ownership of these entities. The process remains open to foreign investors and is transparent. More information can be obtained at .
8. Responsible Business Conduct
The private sector is involved in projects that benefit society, including in support of environmental, social, and cultural causes. The non-governmental organization (NGO) community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental, and community projects. The government periodically partners with NGOs and encourages philanthropy.
While Barbados has been on the Tier 2 Watch List for trafficking in persons for two years, there are no known human or labor rights concerns relating to responsible business conduct of which foreign businesses should be aware.
Adoption of broad corporate governance codes such as the OECD guidelines is voluntary, as is disclosure of corporate governance practices. In practice, many companies in Barbados are influenced by international best practices. CBB and FSC guidelines regulate the purpose and role of the board of directors. The accounting profession is regulated by the Institute of Chartered Accountants of Barbados, which is a member of the International Federation of Accountants.
Barbados is not a signatory of the Montreux Document on Private Military and Security Companies or a participant in the International Code of Conduct for Private Security Service Providers’ Association.
Department of State
- Country Reports on Human Rights Practices;
- Trafficking in Persons Report;
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities and;
- North Korea Sanctions & Enforcement Actions Advisory
Department of Labor
The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. Barbados signed but did not yet ratify the UN Convention on Corruption and the Inter-American Convention Against Corruption.
In 2012, Barbados enacted the Prevention of Corruption Act, which includes standards of integrity in public life. It has not been proclaimed by the Governor General and consequently is not in force. The Integrity of Public Life Bill 2020, which mandated declaration of assets by all politicians, senior public officers, chairpeople, and high-ranking managers of SOEs, passed in Barbados’ Parliament but was ultimately defeated in the Senate. Prime Minister Mia Mottley’s administration plans to bring the bill back to Parliament in 2021 but has acknowledged the need to reach agreement with opposing forces in the Senate.
The government of Barbados has announced its intention to establish a public investment dashboard to provide information relevant to public sector investment projects, including cost overruns, procurement procedures, and company selection. The government also hopes to establish an independent statistics and data analytics authority, and plans to introduce a Freedom of Information Act.
A government minister with the previous administration was arrested in the United States on charges of laundering proceeds from bribes paid in Barbados. He was found guilty on two charges of money laundering and one count of conspiracy to commit money laundering.
Barbados is a member of the regional Association of Integrity Commissions and Anti-Corruption Bodies in the Commonwealth Caribbean.
Resources to Report Corruption
10. Political and Security Environment
Barbados does not have a recent history of politically motivated violence or civil unrest.
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.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 3: Sources and Destination of FDI
Data not available.
Table 4: Sources of Portfolio Investment
Data not available.