Barbados IBCFormation of International Business Company (IBC) in Barbados

LEGAL FORM

The Companies Act 1982 is the main legislation governing companies in Barbados. It was modeled on the Canadian Business Corporation Act. Company forms available under the Act are limited liability companies, companies without share capital (for non-profit purposes) and mutual insurance companies. Most offshore operations in Barbados make use of the limited liability company form, and then take offshore status under one of the enabling pieces of legislation, including the International Business Companies Act 1991, the Foreign Sales Corporations Act 1984, and the various specialized financial company forms. The International Business Company is the most widely used vehicle for offshore operations in Barbados.
IBC status is given to companies that are carrying on the business of international manufacturing or international trade or commerce. Broadly speaking, these activities have to be carried out in Barbados, with exports or the provision of services being to countries outside the Caricom area or to other IBCs, exempt insurance companies or Foreign Sales Corporations (i.e. other offshore entities). The Act limits the issue of an IBC license to companies that fulfill the following criteria:

• a company should be resident in Barbados (resident means incorporated in or managed and controlled from Barbados; registered foreign - external - companies are deemed to be resident);
• no more than 10% of the assets of a company would accrue on a liquidation to holders of its shares and loan capital resident in the Caricom area;
• no more than 10% of the interest and dividend payments made by a company should go to individuals resident in the Caricom region.

COMPANY NAME

Barbados companies’ names must end with one of the following words, or their relevant abbreviations - Limited, Corporation, Incorporated. The following names to be used, require licensing: Bank, Insurance, Assurance, Re-Insurance, Trust, Trustee, Savings, Royal, Asset management, Fund Management, Investment Fund, Building Society, Municipal, Chartered. Names denoting any connection to local, state or national Governments are generally prohibited.

MEMORANDUM AND ARTICLES OF ASSOCIATION

Companies in Barbados are formed under the Companies Act by submitting Articles of Incorporation, Notices of Directors and Registered Address and Request for Name to the Registrar of Companies. The Registrar issues a Certificate of Incorporation, and the company exists as from the date of the Certificate. Memorandum specifies the activities in which the company may engage and Articles of Association specify the rules governing the internal management of the company. In addition, application must be made to the Barbados Ministry of Finance for an international business company license. This application should be made as soon as possible after the incorporation of a company.

SHAREHOLDERS

A minimum of one shareholder is required which may be an individual or a body corporate. The details of company beneficial owners and shareholders are not part of the public records.

SHARE CAPITAL

There is no specific minimum capital requirement. The usual authorized share capital is US$ 50,000. The minimum issued capital may be one share of par value. Issued shares must be fully paid. Registered shares, bearer shares, preference shares, redeemable shares and shares with or without voting rights are permitted. A company may purchase its share back or reduce stated capital subject to solvency tests.

DIRECTORS

Barbados IBC requires a minimum of one director and corporate directors are permitted. Details of the directors do not appear on the public file. There is no requirement to have resident directors.

REGISTERED OFFICE AND SECRETARY

Barbados companies must maintain a registered office in Barbados. Copies of the Articles of Association, Memorandum of Association, and Certificate of Incorporation must be kept at the Registered Office. A copy of the Register of Directors must also be kept at the Registered Office of the IBC. The Register is not available to the public. There is no requirement to have a company secretary; however, it is advisable to have one for administration purposes. An individual or a body corporate of any nationality can be appointed as company secretary.

MEETINGS

The directors and the shareholders meetings need not be held in Barbados; also there is no requirement for an Annual General Meeting. All meetings may be held outside Barbados by telephone or other electronic means. Alternatively, directors and shareholders may vote by proxy.

INCORPORATION TIME

Usually it is up to 10 working days, but we need up to another 10 working days for legalization of the documents and delivery by courier.

RECURRING AND MAINTENANCE FEE AS FROM 2ND YEAR

• Annual administration, provision of registered office, registered address and agent
• Payment of annual government fees
• Payment of the Government License Fees, provision of registered office, registered agent and company Secretary must be renewed by December 31 irrespective of the date of incorporation.

International Business Companies pay corporation tax as follows:

• Taxable Profits up to 10,000 - 2.5%
• Taxable Profits between 10,000 and 20,000 - 2.0%
• Taxable Profits between 20,000 and 30,000 - 1.5%
• Taxable Profits over 30,000 - 1.0%

The Minister may agree a different rate at his discretion, but it may not be less than 1%. Foreign tax credits are deductible, but only in so far as the tax paid stays above 1%. An external IBC (incorporated outside Barbados) pays tax only on its local revenues. IBCs are exempt from stamp duty on transfers to other IBCs or non-resident persons; they are exempt from exchange control regulations; they are exempt from customs duties on goods and materials imported for their international business, and they are exempt from withholding taxes on payments of all types made to other IBCs or to non-resident persons.
The Minister may grant exemption from income tax on a proportion (usually one third) of the earnings of those IBC employees or sub-contractors who are essential to its business but are difficult to attract or retain. The exemption of withholding tax for dividends makes Barbados IBCs particularly attractive to Canadians as the dividends an “active” IBC pays its Canadian parent company are also not taxed in Canada as they form part of the parent’s exempt surplus. Under Canadian law, the exempt surplus is the active business income of a foreign affiliate carried on in a listed country such as Barbados.


AUDIT AND FINANCIAL RETURNS


Financial statements for IBCs must be audited where total assets or revenue exceeds US$ 1,000,000 and is set to be further increased to US$2 million as of 1st January 2013. An annual tax return is required for all companies. A company is required to keep financial records, which should reflect the financial position of a company.

OUR SERVICES FOR THE COMPANY FORMATION IN BARBADOS INCLUDE:

• Name check and approval
• Filling incorporation documents with the Registrar of Companies
• A standard set of original corporate documents
• Payment of the Government fees
• Provision of registered office and registered agent for one year
• Rubber stamp

DOCUMENTS REQUIRED FOR THE COMPANY FORMATION

Please provide the following documents for all Directors, Shareholders, Beneficial Owners, Authorized Signatories:

• Notarized copy of valid passport.
• Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within 3 months).
• Original or certified copy of Banker’s reference letter (dated within 3 months).
• In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and Certificate of Good Standing (for companies registered more than 1 year).
• CV Personal Profile

IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES

If you conduct any activity without required license or authorization granted by a relevant authority in any jurisdiction, Agent Legal will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.

Licensable activities include, but not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking business; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.

Please contact us if you need our assistance in licensing of your financial, Forex brokerage or gambling company.

SHIPPING COST

Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to the invoice during checkout. Shipping costs for international courier services are set automatically and can vary from USD 75 to USD 95. The fees depend on the jurisdiction of your ordered company, the country where the bank is based as well as your destination country.