The Barbados Domicile

Barbados has had a long history of political and economic stability. Together with an excellent education system and sound infrastructure, it offers an attractive environment for global financial services and wealth management, ICT, medical schools, fintech, research and development, renewable energy and medicinal cannabis, in addition to captive insurance companies.

For decades, Barbados has been known as a domicile for captive insurance business, ranking among the top ten domiciles worldwide, according to Business Insurance. A sound business environment, favourable business solutions, facilitated through an expanding double taxation treaty network and the domicile's ability to respond to the needs of clients, are essential elements of the Barbados Business Brand. The introduction of new legislation and upgrades to current legislation are undertaken to improve Barbados' product mix and ensure that investors' needs are met.

Barbados has long-standing treaties with Canada, the UK and the USA. The country is also expanding its global business activity within Latin America and has treaties with Mexico, Panama and Venezuela. Barbados is at various stages of discussions for double taxation treaties with several other Latin American countries including Brazil, Colombia, Chile and Costa Rica. The country's recognition within Latin America, as a captive jurisdiction, continues to grow and the incorporated cell company is quite appealing to owners of the many privately held conglomerates in Latin America.

As of December 31, 2023, the Financial Services Commission (FSC) reported that there were 267 active captive insurance companies in Barbados with USA and Canada captives accounting for approximately 70% of the total number. In addition to the traditional property and casualty exposures, captives are also being used to ensure environmental liability, product recall, weather risk, intellectual property infringement rights and other business risks including disruptions caused by severe disease outbreaks like the coronavirus pandemic. Barbados continues to prove that it is well equipped to provide the captive insurance infrastructure to assist with navigating these realities.

Why Barbados for Insurance?

Barbados is a successful business centre that enables investors to enhance their global competitiveness. Following are the main advantages that make the jurisdiction attractive particularly for insurance businesses:

  • Good infrastructure for international insurance companies including experienced management companies, banks, investment companies, auditors and lawyers
  • Appropriate regulation and governance
  • Educated and experienced local workforce
  • Ease of business incorporation and licensing
  • Availability of segregated cells and separate accounts
  • Low capital and flexible solvency requirements
  • No restriction on insurance business written
  • For Canadian captives, dividends paid to a Canadian company out of income earned from an active insurance business in Barbados may be considered as exempt surplus for Canadian tax purposes and are therefore not subject to tax in Canada, when repatriated.
  • For USA Captives, under the Barbados/USA tax treaty, a company controlled by USA investors, may be able to carry out prescribed activities in the USA without being deemed to have a taxable presence there.

Other General Advantages

  • An expanding Treaty Network that gives investors operating in Barbados access to a number of partners in Africa, Asia, Latin and North America, greatly assisting in enhancing their global competitiveness
  • Capital gains not subject to tax in Barbados
  • Foreign Currency Permit (FCP): All business entities that earn 100% of their income in foreign currency are eligible to receive a FCP affording them the following benefits:
    • Exemption from exchange control
    • Exemption from withholding tax on all payments, including dividends to non-residents
    • Exemption from payment of stamp duty and property transfer tax
  • Modern telecommunications and transport infrastructure: Barbados boasts an efficient ICT framework comprising a reliable island wide fibre-optic network, Wi-Fi and high-speed 4G data services. The country also has an international airport offering direct daily flights to major cities and a modern seaport
  • Nearshore location and favourable time zone: Location within similar time zone as the North American East Coast
  • Political, social and economic stability: Known for being one of the most stable countries globally, Barbados has continued its long-standing tradition of parliamentary democracy and pragmatic management of its economy. Additionally, the warm and friendly nature of Barbadians is a welcome attraction to global investors
  • Business friendly: The process to start a business is straightforward and is complemented by transparent policies and regulations, as well as a supportive institutional framework for global business. There are also no restrictions on the ownership of property
  • Quality of lifestyle: Barbados boasts a highly developed standard of living, which makes it an attractive place to live, work and enjoy. This is evidenced by the country's ranking in the UN Human Development Index 2021, of 11th in the Americas and 70th in the world

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