Company formation in Barbados
Foundation of Barbados International Business Company (IBC). Barbados is well-known from offshore corporations and as the ideal jurisdiction for foreigners use to set up IBC companies.
The law regulating the operating principles of IBC companies adopted in year 1992. This law allows foreigners to create IBC as enterprises licensed to conduct commercial or production activities in the country for people living in other countries.
Barbados IBC can not do business in Barbados. Therefore, IBC is ideal for real estate investments in Poland and in any type of international trade outside of Barbados.
Barbados IBC is the most popular offshore company created in Barbados by foreigners.
Owning Barbados IBC has many benefits, including:
1. Low income tax: income taxes on company profits are based on a movable scale ranging from 0.25% to a maximum of 2.5%. The tax credit allows IBCs who pay taxes outside of the country to credit dues from Barbados, which may reduce the tax to a minimum rate of 0.25%. In addition, there is no capital gains tax.
2. IBC is exempt from withholding tax on dividends, interest and royalties and exempt from import duties.
3. IBC can operate in any currency.
4. Guaranteed 15-year benefits and redundancies: IBC can get the government's agreement to guarantee all current benefits and redundancies for a period of 15 years.
5. There is no minimum capital requirement.
Incorporation of Barbados IBC
To create an IBC in Barbados, the founder must submit the following documents: statute, name of the company, appoint directors and provide a registered address to the Registrar of Companies (companies register).
In addition, a memorandum and articles of association specifying the type of business activity of the company and specifying the company management rules should be submitted.
The company Certificate will be issued by the register, however the IBC exists from the date specified on the Certificate. After receiving the Certificate you must apply to the Ministry of Finance for a license an International Business Company.
Company name: IBC is required to choose a company name that does not resemble the names of other companies names in Barbados.
Office address and local agent
Baerbados IBC must have a local office address. In case a registered agent is not required, the IBC should have a licensed corporate secretary.
Shareholders, directors and secretary
In the case of IBC, only one shareholder is required. IBC must have at least one director of any nationality and does not have to be a resident, it may be another company. The secretary of the company is required, who must have a license and may be a natural person or a company.
Income taxes on company profits are based on a mobile scale ranging from 2.5% for profits below 5 million USD to 0.25% for over 15 million USD.
Tax credit allows for IBC's who pay taxes outside of the country to be crediting againts Barbados, which can reduce the tax to minimum rate of 0.25%. In addition, there is no capital gains tax.
IBCs owned by the Barbados Offshore Trust and managed in accordance with the International Law on Financial Services receive a zero income tax rate based on the Act. Annual tax returns are required. Companies that end the year before September 30 must file documents by March 15. All others until June 15.
The initial government fee for creating an IBC is 390 USD. In addition, a license fee for an application of 125 USD plus 500 USD per license is required to obtain a license to operate internationally.
IBC must submit a special form to renew the license at the Ministry of Foreign Affairs. From this moment, the renewal fee is 500 USD plus the fee of the registered agent, and the application must be completed by December 31st. If the IBC does not submit by February 1, the license will be canceled.
Accounting and auditing requirements
Barbados IBCs must keep adequate books and records. A licensed local auditor must be hired if IBC's gross assets or incomes are 2 million USD or more. The Institute of Chartered Accountants of Barbados sets accounting standards. The law only allows an audit of an IBC whose assets or revenues are over 500,000 USD.
Annual meetings of shareholders are required, which can take place anywhere, and the owners can be represented by a plenipotentiary. The company must have minutes of meetings and resolutions of owners and directors.
Company registries are open to view and purchase copies. The names of owners and shareholders may not be available when using nominee services.