If you want to incorporate in Barbados, you have to know about taxation for an IBC which is the most common company structure in Barbados.
International Business Companies in Barbados are entitled to do business outside the country and may have restrictions to trade with CARICOM residents and own real estate within the territory. IBCs income accrued offshore is taxed at a regressive rates between 2.5% and 0.25%. IBCs may claim a tax credit for foreign tax paid, provided that this does not reduce the company's rate of CIT in Barbados to less than 0.25%. Barbados ranks 26th overall with regards to CIT globally. IBCs are subject to a annual license fee of BBD 850. IBCs in Barbados are commonly used for international manufacturing, international trading, group finance, intellectual property holding, holding company, among others.
An IBC may have one or more shareholders, who may be natural or legal persons, and one minimum director. Nominee shareholders are allowed. A Corporate director is allowed if it is a registered Barbados company. A licensed secretary may be required. Minimum capital requirement is US$ 1 and it this may be in any currency. Shares are denominated in non-par value. Bearer shares are not allowed
Shareholders may not be publicly disclosed but name of directors are available in public records. A Barbados IBC is required to file an annual return together with its financial statements. Financial Statements may not be publicly accessible. It may be required to maintain accounting records. Audit may be required if IBC gross assets or revenue exceed US$500,000.
The VAT rate in Barbados is 17.50%, that ranks Barbados as 115th overall in terms of VAT taxation rate internationally. In terms of other taxation, an employer will contribute 11.25% to the equivalent of a social security fund and an employee will contribute 10.1%. The overall complexity of the tax system is high. This is measured by average time to comply with a country's labor tax requirements is as it is 162hours. Contributing to this is the number of yearly labor tax payments, which is 12 in BB.
Thin capitalization rules aren't in effect. Thin capitalisation refers to any type of restrictions on given company with respect todebt-to-asset ratios. Dividends received from a foreign entity may not be taxed if shareholder holds at least 10% of equity interest of the distributor. Dividends are distributions of earnings of the business, determined by the board of directors, to a class of its shareholders. Dividends can be one of the following stock, cash, or property. Capital Gains are not taxed in Barbados. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.
IBCs in Barbados are not subject to withholding tax. This means that payments made by an IBC on dividends, interests, royalties or any kind of fee to non-residents are not taxable.
There is no known tax on wealth in Barbados. There are no known inheritance taxes in Barbados. There are real property and transfer. There are no widely used research and development tax relief in BB.
The above is not tax or legal advice for your particular situation. We are able to help you find a lawyer in Barbados who can properly advise you. Contact us today. Click incorporate now if you are in a hurry, or press the free consultation button above.
It takes approximately 27 hours to file and prepare documents for a Barbados Common law.
The corporate tax is approximately 0% which is 1 in the world.
Owners of a company in Barbados are not allowed to carry back a loss and may be allowed to carry forward a loss for 7 years.
The vat rate in Barbados is 17.5% which ranks 115 in the world.