Transparency of the Regulatory System
Barbados’ legal framework fosters competition and establishes clear rules for foreign and domestic investors with regard to tax, labor, environmental, health, and safety concerns. These regulations are in keeping with international standards. The Ministry of Finance and Economic Affairs and the Invest Barbados Agency each provide oversight aimed at ensuring the attraction and channeling of investment occurs transparently.
Rulemaking and regulatory authority rests with Parliament. This bicameral legislature is made up of the House of Assembly and the Senate. 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.
Foreign investment into Barbados is governed by the national laws of Barbados and their implementing regulations. These laws and regulations are developed with the participation of relevant ministries and are 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
- Insurance and non-banking financial services – Financial Services Commission
- International business – International Business Unit, Ministry of International Business
- Business incorporation and intellectual property – Corporate Affairs and Intellectual
- Property Office (CAIPO)
The Ministry of Finance and Economic Affairs 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 aforementioned 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 posting of information such as government office directories and press releases. The Government Information Service website is available at: http://gisbarbados.gov.bb/ . The government also maintains a parliamentary website, where it posts legislation prior to parliamentary debate and live streaming of House sittings. The government budget is also available on this website, available at: http://www.barbadosparliament.com/ .
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, government ministries and departments, and are published in the Official Gazette after passage in Parliament.
Accounting, legal and regulatory procedures are transparent. Publicly listed companies publish annual financial statements as well as any changes in portfolio shareholdings, including share values. Service providers are required to adhere to international best practice standards including International Financial Reporting Standards (IFRS), International Standards on Auditing (ISA) and International Public Sector Accounting Standards (IPSAs) 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, in particular, must engage in continuous professional development. All Barbadian financial service providers are regulated by the Corporate and Trust Service Providers Act. Failure to adhere to these laws and regulations may result in revocation of the business license and/or cancellation of work permit(s).
The Office of the Ombudsman is established by the Constitution to guard against excesses by government officers in the performance of their duties. It is the objective of the Office of the Ombudsman to provide quality service in an impartial, timely and expeditious manner while 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, 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
Barbados adheres to international standards of best practice and is recognized by the Organization for Economic Cooperation and Development (OECD) as largely compliant. Barbados is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax matters, the Multilateral Competent Authority Agreement, as well as the multilateral convention to implement tax treaty related matters to prevent base erosion and profit shifting.
The Barbados National Standards Institution was established in 1973 as a joint venture between the Government of Barbados and the private sector under the Companies Act. It oversees a laboratory complex housing metrology, textile, engineering and chemistry/microbiology laboratories. The primary functions of the Barbados National Standards Institution 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 work of the Barbados National Standards Institution is governed by the Standards Act (2006) and the Weights and Measures Act (1977) and Regulations (1985). As a signatory to the World Trade Organization Agreement on the Technical Barriers to Trade, Barbados, through the Barbados National Standards Institution, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.
Barbados ratified the WTO Trade Facilitation Agreement (TFA) in January 2018. Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade. It will also improve the speed and efficiency of border procedures, facilitate trade costs reduction and enhance participation in the global value chain.
Legal System and Judicial Independence
Barbados’ legal system is based on the British common law system. Modern corporate law is modeled on the Canada Business Corporations Act. The Attorney General, the Chief Justice, junior (puisne) judges, and magistrates administer justice in Barbados. The Supreme Court consists of the Court of Appeal and the High Court. Appeals are made in the first instance to the Court of Appeal. The High Court hears criminal and civil matters and makes determinations on the interpretation of the Constitution.
The Caribbean Court of Justice is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. The Caribbean Court of Justice has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. In 2005, Barbados became a full member of the Caribbean Court of Justice; thus making the Caribbean Court of Justice its final court of appeal and original jurisdiction.
The United States and Barbados are both parties to the World Trade Organization (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 actively 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 concerning International Business Companies, Financial Services, International Insurance, Ships’ Registration and Trusts. Barbados is currently revamping its Fiscal Incentives legislation to bring it in line with the obligations under the World Trade Organization (WTO)’s Agreement on Subsidies and Countervailing Measures. Thus, Barbados has ceased all approvals of applications for new incentives or extensions of incentives under the Fiscal Incentives Act Cap. 71A of the Laws of Barbados. However, work continues on the development of a suite of benefits to investors that will not contravene the conditions of the agreements to which Barbados is a signatory.
All proposals for investment concessions and incentives are reviewed by Invest Barbados to ensure proposed projects are consistent with the national interest and provide economic benefits to the country. All proposals are submitted through Invest Barbados for final consideration.
Invest Barbados provides “one-stop shop” facilitation services to investors to guide them through various stages of the investment process. It offers a website useful for navigating the laws, rules, procedures and registration requirements for foreign investors. This can be found at http://www.investbarbados.org .
Competition and Anti-Trust Laws
Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to Caribbean Community (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 is established to apply the rules of competition in respect of anticompetitive cross-border business conduct. 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 Fair Trading Commission (FTC) in 2001. The Fair Trading Commission is responsible for the promotion and maintenance of fair competition and participates in the Caribbean Competition Commission. The Fair Trading Commission regulates the principles, rates and standards of service for public utilities and other regulated service providers. Sectorial regulation of competition in the telecommunications field is provided under the Telecommunications Act.
Expropriation and Compensation
The Barbados Constitution and the Companies Act (Chap. 308) contain provisions permitting the government to compulsorily acquire property for public use upon prompt payment of compensation at fair market value. The 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. Additionally, individual agreements between Barbados and multilateral lending agencies 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) contain provisions 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.
According to the 2018 World Bank Doing Business Report, Barbados is ranked 167th out of 190 countries in resolving contracts. 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 resolution of commercial disputes. Through the Arbitration Act of 1976, local courts recognize and enforce foreign arbitral awards issued against the government. Barbados does not have a recent history of investment disputes involving either U.S. or foreign investors.
International Commercial Arbitration and Foreign Courts
The Supreme Court of Barbados is the domestic arbitration body and the local courts do enforce foreign arbitral awards.
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 makes provision for the insolvency and/or liquidation of a company incorporated under this Act. The 2018 World Bank Doing Business Report addressed the strength of the framework and its limitations in resolving insolvency in Barbados and ranked Barbados 34th out of 190 countries in this area.