What is an International Business Company (IBC)?
An international business company or IBC is a company incorporated pursuant to the provisions of the Companies Act and licensed under the International Business Companies Act, which carries on the business of international manufacturing, trade or commerce from within Barbados for customers who reside outside of Barbados.
Barbados IBCs are taxed on a sliding scale from 2.5% to 0.25% depending on the profits of the IBC. IBCs are entitled to foreign tax credits in relation to taxes paid outside of Barbados.
IBCs are not subject to withholding tax on dividends, interest and other payments made to non-residents of Barbados or to another IBC. In addition, IBCs are not subject to capital gains tax and are exempt from ad valorem stamp duty (except in respect of real estate situate in Barbados), exchange control, taxes on the transfer of any securities or assets of the IBC, other than real estate situate in Barbados and taxes and duties on plant, machinery, raw materials, goods and other articles imported into Barbados for use in the IBC’s business. The benefits and exemptions available to IBCs can be guaranteed for a period of 15 years.
IBCs must be licensed by the Ministry of International Transport and International Business to conduct international business and the IBC license must be renewed annually on or before December 31. IBCs are required to present audited financial statements to the Ministry of International Transport and International Business when the gross assets or revenues of the IBC exceed USD 2,000,000.
What are the most common types of IBC Structures formed in Barbados?
There most common IBC structures are: sales companies, group finance companies, intellectual property holding companies and corporate holding companies.
Barbados has been renowned for its political maturity, social stability, successful economy, financial independence, integrity of its legal system and well-educated population. These strong characteristics have earned Barbados its reputation as one of the world’s most respected international financial services domiciles, consistently meeting international best practice standards.
The legislation provides attractive tax concessions and incentives. Barbados also has a well-developed tax treaty network with several countries.
The decision to choose Barbados as a location for carrying on international business goes far beyond its low tax regime, its strong regulatory reputation and its international agreements. Barbados continues to distinguish itself from other similar neighbouring jurisdictions through the high quality of its human resources. The Government of Barbados has invested heavily in education at all levels, which translates into a steady stream of both high school and tertiary graduates, in an increasingly diverse range of disciplines. As a result, Barbados’ high standard of education has produced an adequate supply of professionals and skilled labour.