The Future Of The Barbados Offshore Industry In The Age Of Transparency

Base Erosion and Profit Shifting, the Common Reporting Standard, the Panama Papers, the Tax Justice Network...as the transparency argument gets louder, it appears that opponents of the basic human right for confidentiality continue to increase. So how does Barbados' international business industry continue to evolve in this new world?

Looking back at the development of the industry over the years, it is evident that Barbados is not, and never has been, a 'zero-tax' jurisdiction. Barbados has a complex and comprehensive system of tax for its citizens and high-skilled expatriates. In addition, there has been heavy investment in a network of double taxation (DTAs) and bilateral investment treaties (BITs).

One of Barbados' finest achievements is its investment in educating its workforce. The country is home to experienced, highly-skilled and educated professionals, most of whom have achieved postgraduate certification in their various fields.

But what does all this mean for the future, and how will Barbados continue to advance?

With the level of transparency now demanded in this new world, tax will not be the determining factor in a corporation's or family's decision to move their business interests offshore. For corporates, the decision to move to an international jurisdiction will be less influenced by tax, and more so by other efficiencies, including legislation, ease of doing business, flexibility and overall costs. There will also be more emphasis on substance and mind and management. Directors, administrators, local corporate staff, professionals and other stakeholders will need to understand the business of the offshore entity and where it fits in the value chain - and this has long been the norm in Barbados. Gone are the days when an administrator might sign off resolutions at the instruction of a foreign originating email, a common practice in some other jurisdictions.

For families, similar factors will influence their decision, with the added need for quality of life - especially stability and safety, certainty of law and the ability to find skilled and experienced professionals who can provide a range of services. Whilst there is a need for sensitivity in regard to confidentiality, there is also still the need for asset protection and family estate planning, which...