cititrust barbados international inc

High quality servicedemonstrated

cannot be sold

it must be

Barbados Brochure.ART:Layout 1 14/05/2009 11:41 Page 3

‘High qualityservice cannot besold, it must bedemonstrated’


Contents

About Cititrust Barbados.............................................................................................................................02

Services ........................................................................................................................................................03

International Tax Management..................................................................................................................04

Barbados Tax Planning.............................................................................................................................05

Company and Trust Formation .................................................................................................................05

Trustee Services .......................................................................................................................................07

Company Secretarial Services ..................................................................................................................07

Company Administration Services ............................................................................................................07

Accounting and Financial Management ....................................................................................................08

Auditing and Financial Reporting Services ................................................................................................08

Why Cititrust?...............................................................................................................................................09

Why Barbados? ...........................................................................................................................................10

Barbados the Jurisdiction ...........................................................................................................................12

The Country .............................................................................................................................................12

In Barbados you will find...........................................................................................................................12

Double Tax Treaty Network.......................................................................................................................13

Excellent Professional Services.................................................................................................................13

Sound Regulatory Environment ................................................................................................................13

Modern Infrastructure...............................................................................................................................13

Stability ....................................................................................................................................................13

Barbados International Tax Planning Entities ............................................................................................14

International Business Company IBC........................................................................................................14

Society With Restricted Liability (SRL).......................................................................................................16

Exempt Insurance Company (EIC) ............................................................................................................17

Qualified Insurance Company (QIC) ..........................................................................................................17

Segregated Cell Company (SCC) .............................................................................................................18

Mutual Funds ...........................................................................................................................................18

Private Wealth Management Trusts in Barbados .......................................................................................19

International Trust .....................................................................................................................................19

Domestic Trust .........................................................................................................................................20

Family Office.............................................................................................................................................20

Private Bank.............................................................................................................................................20

Merchant/Investment Bank.......................................................................................................................20


Citizens of the world face an everincreasing amount of tax law.

Barbados has the right mix of treaties, domestic taxlaw and regulation to be able to deliver real commercialbenefits which are within the envelope and will endurethe slide rule of more comprehensive tax legislation.

The quality of life in Barbados is second to none andthe global asset manager has all the tools needed toestablish and internationally tax efficient operation.

If You Want To AvoidUncertainty...


SERVICES

Through our Barbados professionals we provide access to a range of services to support the use of Barbadosin your international tax structure whatever its purpose.

We offer the following services:

International Tax Management

Barbados Tax Planning

Company and Trust Formation

Trustee Services

Company Secretarial Services

Company Administration Services

Accounting and Financial Management

Auditing and Financial Reporting Services

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‘The quality of life inBarbados is second tonone and the globalasset manager has allthe tools needed’


In International Tax law today with the proliferation ofTransfer pricing rules, double tax treaties anddomestic tax avoidance laws, substance andgenuine economic activity (GEA) integrated intointernational tax management is of the highestpriority.

Whether it is;

n Genuine Economic Activity

n “mind and management”,

n “subject to tax” or

n “commercial purpose & substance”

A substance based approach to international taxplanning is required to be able to implement andmaintain robust structures that will be effective forthe long term. We can provide the necessaryservices to design and implement a substancebased international Tax planning structure that iscost effective; We provide this through;

n Customised and Continuous Proactivecustomer focused administration services andsystems.

n Economic Activity & Risk allocation review andanalysis

n Structuring and drafting Commercialagreements for risk allocation.

n Strategic Marketing and business planning andreporting.

n Operational & logistical Planning andImplementation

n Strategic financial planning and executionincluding mergers, acquisitions, andliquidations and corporate finance.

n Business Information Technology planning andimplementation.

n Structured Finance

Our services cover the range of international taxmanagement structures involving;

n International Financial Services;

– Private Banks

– Family Offices

– Merchant Banks

n International Trading

n International Holding Company

n International Real Estate

n International Intellectual Property

n Advance Rulings

n Barbados Domestic Tax Planning

n CARICOM Regional tax planning

Where detailed domestic planning is required inthe clients home jurisdiction we have establishedrelationships with local experts in UK, USA, Canadaamong others who ensure your tax planning forforeign income is optimized in your home country.

International Tax Management

‘Planning is required to be ableto implement and maintainrobust structures that will beeffective for the long term’


In establishing International business entities basedon substantive tax planning the Barbados domestictax law offers significant benefits for the rightsstructures and implementation. This furtheroptimizes the commercial performance of theinternational structures

Where it is necessary we can provide thenecessary advice and liaise with the tax authorities in

Barbados and other CARICOM countries to obtainadvance rulings on tax treatments and other issuesaffecting the international tax structure.

To achieve the right level of Genuine Economicactivity in Barbados to facilitate your operationalrequirements we can provide you with the necessaryservices and expertise to put the most cost effectiveresources in place.

Barbados Tax Planning

We carry out the formation of tax efficient entities inBarbados and other International Jurisdictions.These entities include:

International Business Entities:

n Societies with Restricted Liability (SRLS)

n Exempt Insurance Companies(EICs)

n Qualified Insurance Companies (QICs)

n International Business Companies (IBC’s)

n International Business Partnerships (IBP’s)

n International Business Branches (IBB’s)

n Domestic Trusts

n International Trusts

n International Financial Service Companies including:

– Family Offices– Private Banks– Merchant /Investment Banks

n Mutual Funds

We offer incorporation and corporate services inother International Jurisdictions including Belize.and Seychelles,

Shelf companies and vintage companies areavailable on request.

Company and Trust Formation


‘We provide trusteeservices to clientswith whom we haveestablished aworking relationship’


We will provide trustee services to our clients withwhom we have established a working relationshipwith.

Some trust structures require Barbados residenttrustees with the requisite capabilities to ensure thetrusts are able to access the benefits of the doubletax treaty network.

We have a separate trustees company thatprovides this service to our clients.

We also provide local directorships where requiredfor companies and other entities requiring to belegally tax resident in Barbados.

Trustee Services

Our Professional managers are able to provide;

n Full facilitation of shareholder meetings and minutes

n Modification of company articles andcorporate structure

n Company secretary

n Liquidation and insolvency

n Annual returns

n Maintenance of Statutory books

Company Secretarial Services

We are able to provide the necessary administrativeand back office transactional support to ensure thatyour operations run smoothly and enable yourbusiness to function effectively.

Company Administration Services


With professionally Certified Accountants we areable to provide the full range of financial capabilitiesto meet your requirements.

Accounting and Financial Management

We can efficiently optimize the process of beingaudited by working proactively with localindependent auditors through upfront work bookpreparations and schedules of returns in the desired format.

Auditing and Financial Reporting Services


In our experience customers require firms whodeliver excellent customer service over a long-termrelationship. To that end we aim to provide;

1. First Class Customer Service, proactivethinking and response.

2. Long term robust and substance basedinternational tax planning structure.

3. Ongoing review of your international taxstructure ensuring that it remains fullycompliant.

Cititrust International is an international businessServices provider who deliver first class customerservice. We have legal and financial professionalswith significant experience in the International TaxIndustry in the Caribbean and Europe.

Cititrust Barbados is always focused on deliveringcustomer service and strives to be continuouslyproactive in solving our client’s problems.

Why CITITRUST?


Wealth Management - Barbados As AnInternational Asset Management Centre.

Barbados is actively developing itself as a GlobalAsset Management Centre. The Government ofBarbados is instituting several measures to developBarbados into an attractive centre for private wealthmanagement. Proposals have been made for theQualifying Investor Fund, a single regulatory regimethat is appropriate for;

n Family Offices,

n Private Wealth Managers and

n Small Groups of High Net Worth, Self-Managed Investors.

Barbados will be launching an international Stockexchange and international trading platform in 2010.This will enable local international investors to carryout Listing and Trading International Securities. Thisproject is currently being undertaken by theBarbados Stock Exchange. This will enable privateand institutional investors to be able to raise capitalfrom Barbados as well as manage the resultingcapital and securities in situ.

Plans are in place to establish the FinancialServices Commission, which will regulate all non-bank financial activity; and proposals have beenmade to set up an International Institute of FinancialRisk & Regulation, a global centre of excellence totrain financial professionals in Barbados and theregion.

International Arbitration - Barbados and theLondon Court of International Arbitration arepursuing an initiative to establish an LCIA RegionalArbitration Centre in Barbados.

Substance Based International Tax planning

n In order to prevent and avoid back taxes as aresult of tax authority enquiries you must, fromthe start implement robust and substancebased international tax managementstructures.

n You will need a jurisdiction that has a tax lawregime that will support the requirements forgenuine economic activity, substance andtransparency being introduced by OECDcountries.

OECD Model Exchange of Information

n Many of the double tax treaties negotiated byBarbados feature the extensive OECD modelExchange of Information provision.

Growing Double Tax Treaty Network & BilateralInvestment Treaties

n Barbados has developed and is currentlydeveloping the largest double tax treatynetwork in the Caribbean region.

n The USA, Canada and China can be accessedvia Barbados’ treaties with these countries.

n The Barbados Government remainscommitted to its vision of transformingBarbados into an international financial centrewith the Regulatory infrastructure to warrantsuch a status.

n The jurisdiction provides high quality servicesto the international market, and acts as a hubfor the Caribbean and a convergence point forbusiness facilitation in the Americas.

Why Barbados?


‘Barbados is activelydeveloping itself as a Global AssetManagement Centre’


The Country

Barbados is an independent English-speakingCommonwealth country with a dynamic economy.It has been an independent nation since November30, 1966. The most easterly of the Caribbeanislands, it is just over three (3) hours by plane fromMiami, four and one-half (4 ½) hours from New Yorkand eight (8) hours from London.

Solid leadership has served this 166-square mileisland well, maintaining its political, economic andsocial stability. As its first legislature was establishedin over 360 years ago in 1639, Barbados has thethird oldest parliament in the British Commonwealth,surpassed by only Bermuda and Britain.

Barbados is the most easterly island in theCaribbean chain, located just over three (3) hours byplane from Miami, four and one-half hours (4 ½) fromNew York and eight (8) hours from London.

In Barbados you will find:

n Written Westminster Model Constitution

n A well-educated and highly skilled workforce

n English common law legal system

n An independent judiciary ensuring fair andimpartial dispute resolution

n No restrictions on foreign ownership ofbusiness enterprises

n A range of international investment vehicles forconducting international business

n An International Business Customer Charterdetailing the commitments of regulatoryagencies to provide swift, efficient andprofessional service to the internationalbusiness sector.

n First class telecommunications capability andtransport network.

Sound Regulatory Environment

Represented in main international financialorganisations including the Offshore Group ofBanking Supervisors, the International Association ofInsurance Supervisors and the InternationalOrganisation of Securities Commissions. Memberof the Caribbean Financial Action Task Force andregarded by anti-money laundering agencies as aclean and well-regulated domicile

Substantial Suite of business laws, including:

n International Business Companies Act

n Societies with Restricted Liability Act

n Segregated Cell Legislation /

n Companies Act

n International Financial Services Act

n Financial Institutions Act

n Insurance Act

n Exempt Insurance Act

n International Trusts Act

n Mutual Funds Act

n Money Laundering (Prevention Control) Act

n Regulatory and governance standardsapproved by the OECD in 2002.

Barbados the Jurisdiction


Double Tax Treaty Network

Barbados has concluded Double TaxationAgreements (DTAs) with:

n Awaiting Signature,

– Luxembourg, Ghana

n Negotiations started with;

– India, Spain, Brazil, Turkey and Czech Republic

The DTA with China gives companies operating outof Barbados very advantageous tax treatment .

n Barbados has also entered into BilateralInvestment Treaties with ;

– UK, Venezuela, Germany, Switzerland, Italy, Cuba, Canada, China and Mauritius

Excellent Professional Services

n Reputable international banks and the BigFour major international accounting firms.

n Institutional Investment Managers with accessto products available in locations such asLondon, Hong Kong or New York.

n Readily available ancillary services, such aslegal, actuarial and consulting services

Modern Infrastructure

n International Telecommunications featuringinternational private leased circuits at any bandwidth for voice and data, T1 connectivity, DSLand High-speed data links

n Internet penetration rate of approximately 60%

n Direct flights to major international cities suchas London, New York, Miami, Toronto

n Extensive network of roads and modernseaport facilities

Stability

n Oldest Parliament in the WesternHemishphere.

n Long-standing tradition of parliamentarydemocracy

n Consistent and significant currency surplusand carefully managed capital spending

n Low crime rate

Intellectual Property Protection

n Signatory to the Paris, Rome, Berne andPatents Co-operating Treaties and the TRIPSAgreement

n Legislation protecting holders of rights inrelation to trademarks, patents, designs,copyrights and plant varieties

CHINA NORWAY BOTSWANA

USA SWEDEN AUSTRIA

UK VENEZUELA NETHERLANDS

CANADA CUBA SWITZERLAND

MEXICO MALTA CARICOM

FINLAND MAURITIUS


Barbados offers a range of tax-efficient vehiclesthrough which investors can conduct internationalbusiness. The International Business Company andthe Society with Restricted Liability can be used toconduct business with customers residing outside ofBarbados.

Special incentive entities are available specifically forthe provision of international financial services,namely;

n International Banks,

n Family Offices

n Private Banks

n Merchant/Investment Banks

n Exempt Insurance Companies,

n Qualifying Insurance Companies,

n Domestic Trusts and International Trusts.

n Mutual Funds

All of these vehicles benefit from the followingadvantages:

n No capital gains tax

n Exemption from withholding tax on dividends,interest, management fees, royalties or otherincome paid to non-residents.

n Exemption from taxes on transfers of securitiesand assets to non-residents

n Freedom from exchange controls

Barbados International BusinessCompanies (IBCs)

The IBC status is conferred on companies that arecarrying on the business of international trade andcommerce. It provides tax reductions, exemptionsand various other benefits for a range of activities.

Requirements To Qualify As An IBC

n It must be incorporated in Barbados or be alocal branch of a foreign corporation.

n It must not trade in goods or services inBarbados.

n It may not carry on any business under otheroffshore incentive legislation.

n It must obtain a license from the Minister ofFinance. The annual fee for the license isUS$250.00.

Summary Of Barbados IBCLegislation Incentives

n Profits exempt from tax if the company’sshares are all owned by an Offshore Trust, thecompany is managed by an internationalfinancial institution and its activities arerestricted to buying, selling, holding ormanaging securities.

n A 2.5% maximum corporate tax rate on netprofits.

n An IBC incorporated outside of Barbados willbe taxed in Barbados only on the profitsearned from its Barbados operations.

n Taxes paid to a foreign country may becredited against tax payable in Barbados.

n The credit cannot reduce the tax payable toless than one percent (1%) of the taxableincome for the particular income year.

n Capital gains are not subject to tax inBarbados.

n The Government of Barbados is prepared toguarantee the existing International BusinessCompany benefits for at least fifteen (15)years.

n There are no withholding taxes on dividends,royalties, management fees, interest paymentsand other fees paid by an internationalbusiness company to non-residents ofBarbados or to another IBC.

n Provision for pre-incorporation contracts andtelephone directors' meetings.

n Exemption from public filing of financialstatements.

n No investment restrictions.

n Single shareholder companies permitted.

Barbados InternationalTax Planning Entities


‘Barbados offers arange of tax-efficientvehicles through whichinvestors can conductinternational business’


n A company may buy back its shares or reducestated capital subject to solvency tests.

n Barbados is certified as a "North AmericanArea" and therefore business conventionexpenses incurred in Barbados by UScorporations and organizations areautomatically deductible in the US against UStaxes.

n Profits of an IBC whose shares are whollyowned by a trust which is managed by alicensed offshore bank are exempt from tax

n No minimum capital requirements

n Ease of incorporation

n An IBC is exempt from exchange controlrestrictions and may keep its records andfinancial statements in a foreign currency

n Expatriate staff, who may readily obtain workpermits, can be exempted from income taxand exchange control on up to 35% of theirremuneration from an IBC

n An IBC may import, free from all customsduties, equipment, machinery or materials foruse in its business

Formation of Barbados IBCs

Barbados companies are formed under theCompanies Act Cap 308. Under the InternationalBusiness Companies Act these companies canapply for and obtain an IBC license allowing thecompany to operate as an IBC under the legislationof that act.

International Societies withRestricted Liability (ISRL)

A Society with Restricted Liability (“SRL”) is an entitythat is established under the Societies withRestricted Liability Act. An SRL is very similar towhat is known in the US as a Limited LiabilityCompany (LLC). An SRL that is entitled to specialBarbados tax benefits is called an “InternationalSociety with Restricted Liability” (“ISRL”) whereasentities subject to regular Barbados taxes arereferred to as SRLs. ISRLs are designed to be usedmainly for international transactions and areprohibited from transacting business with personsresident in Barbados.

Other Characteristics of an SRL

n Limited liability

n The rights, powers and privileges of anindividual

n Stipulation that the transfer of quotas in asociety will not confer on the transferee theright to become a member or participate in themanagement of the society without the writtenconsent of all the members

n Quotas similar to shares and bearer shares arenot permitted

Why Consider An ISRL In Barbados?

The general benefits of an ISRL are identical to thoseof an IBC, except that an ISRL’s tax and dutyexemptions are guaranteed for 30 years.

Benefits

n Limited liability.

n Can be treated as a corporation, a partnershipor a disregarded entity for US tax purposes.

n Simplified corporate mobility into and out ofBarbados

n Simple winding -up provisions.

n Taxed on income on a sliding scale, from amaximum of 2.5% to a minimum of 1%.

n Taxes paid in a foreign country may becredited against tax payable in Barbados,provided that the credit does not reduce thetax payable in Barbados to less than 1% oftaxable income.

n Exempt from all import duties on machinery orequipment for use in its business

n Tax concessions for specially qualified non-residents whose services are required for thebusiness.

n May apply for a guarantee that benefits andexemptions will be valid for 30 years

n Duration of ISRL cannot exceed 50 years.

n Ease of organisation with no minimum capitalrequirements

n Corporate directorship and secretary permittedwith certain restrictions

n Provision for redeemable quotas and for pre-incorporation contracts

n An ISRL may purchase, redeem or otherwiseacquire quotas issued by it, subject tosolvency test


Establishing An ISRL

Organisation of an ISRL is achieved by filing articlesof organisation and prescribed information as tomanagers and registered agent, along with the fee ofBds $ 780.00 (US$390.00), to the Registrar ofCompanies. A certificate of organisation is issued bythe Registrar, on filing of the organizationaldocuments.

The formation procedures are essentially the samefor both types of SRLs, except that an ISRL mustobtain a licence from the Minister responsible forInternational Business to operate as such. Thislicense must be renewed annually. See licenceapplication at Appendix III.

Annual Requirements

n An ISRL license must be renewed annually onor before December 31st. See renewal form atAppendix IV.

n Annual Licence fee of Bds. $850.00 (Approx.US $425.00).

n Audit requirement where the gross assets andrevenues of the SRL exceeds the statutorythreshold of Bds $1M (US $0.5M).

n Financial statements are to be filed with theregulatory authorities

n Annual return to be filed by 31st January ofeach year.

Exempt Insurance Company

The Barbados Exempt Insurance Act states that fora company to qualify as an Exempt InsuranceCompany it must be incorporated in Barbados witha minimum capital of US$125,000, and at least oneof its directors must be a resident citizen ofBarbados.

Exempt Insurance Companies cannot insure risksoriginating in Barbados or risks of local residents.

Exempt Insurance Companies are taxed on theirprofits at the rate of 0% for the first 15 years andthereafter, 2% on the first $250,000 of profits.

They are also exempt from withholding tax andexchange control restrictions.

There is an application fee of US$250 for an ExemptInsurance Company and an annual licence fee ofUS$10,000.00.

Qualifying Insurance Companies

A 1998 legislative enactment allows companiesinvolved in international insurance business toregister under the domestic insurance legislation asQualifying Insurance Companies (QIC).

A QIC is entitled to the benefit of a low effective rateof tax (generally 1.75%) after deduction of a foreigncurrency earnings allowance, and exemptions fromwithholding taxes and exchange control.

Unlike Exempt Insurance Companies, a QIC can beowned by residents of Barbados and can insure acertain amount of local risk.

A QIC is entitled to the tax concessions once at least90% of its premiums originate outside of CARICOM,and at least 90% of its risks insured are locatedoutside CARICOM.

n A maximum tax credit of 93% is availablewhere premiums originate outside ofCARICOM

n Exemption from withholding taxes

n Exemption from exchange control

n Personal tax concessions for specially qualified employees

n Re-domiciliation provisions

n Annual fee of BDS$20,000 (US$10,000)


Segregated Cell Accounts

Barbados SCCs can be (1) a company that isincorporated as a segregated cell company (2) anexisting company that is converted to a segregatedcell company (3) an external company which can be:a). registered as a cell company in Barbados b).continued as an SCC in Barbados. Here the liabilityof an SCC to a person arises the liability is attachedto the cellular assets attributable to that cell

n Separate accounts may only be established forinsurance business

n Assets of the company segregated intoseparate accounts are kept separate from thegeneral assets of the company

n Assets of a separate account may be investedand dealt with in accordance with the terms ofthe relevant contract

n Separate books of record are kept for eachseparate account

n An SCC must include in its name theexpression Segregated Cell Company or theexpression ‘SCC’

n Each cell must have its own distinctdesignation or denomination, which must beclearly set out in the agreement

Mutual Funds

Mutual Funds licensed to operate in Barbados are“subject to tax” and are taxed at normal Barbadosdomestic corporate tax rates.

There are three types of licenses;

n Limited Investors

n Exempt Mutual Fund License

n Mutual Fund Licence.

Exempt mutual funds, or mutual funds that arelicensed in a foreign jurisdiction approved by theMinister, can conduct business in Barbados if theyhave appointed an agent in Barbados and havebeen granted a licence by the SecuritiesCommission.

Under the domestic tax law of the BarbadosIncome Tax Act, There is a deduction allowed forincome in a given tax year from assessable incomethat which is the income of the shareholders.

Distributions to non resident investors are exemptfrom withholding tax.

Transactions concerning the acquisition or transferof shares in mutual funds are exempt from stampduty and property transfer tax

Under the Mutual Funds Act 2002, persons mustbe licensed by the Securities Commission in order tocarry on mutual funds business in or from Barbados.

‘Special incentive entities areavailable specifically for theprovision of internationalfinancial services’


The law of trusts in Barbados has its foundation inthe English Trustee Act 1925, common law, andrules of equity. The general principles relating totrusts are supplemented by the Barbados TrusteeAct and the International Trusts Act (“ITA”).

The International Financial Services Act 2002-5(“IFSA”) also regulates licensees acting as trustees of“offshore trusts” in Barbados and regulates thepowers and duties of the licensee as trustee.Barbados has developed a legal infrastructure withaccounting expertise to strengthen the properestablishment and administration of trusts.

A Barbados trust provides for distributions at anytime during the lifetime and upon death of the settlor.It can provide most of the benefits of a will withoutrequirements of probate and court approval fordistribution of assets to beneficiaries. Law dictatesthat unquestioned legal title vests in the beneficiariesfrom the property of the trust.

A trust, which takes effect only upon the death ofthe settlor, must be declared as prescribed by theSuccession Act 1981 since it is essentially a will andis therefore subject to probate. Further, the PropertyAct 1979 requires that for dispositions of realproperty, the instrument must be in writing.

Any person, resident or non-resident, may settleassets in a Barbados trust. A trust is arguably themost secure of all vehicles available to investors toprotect their assets.

Historically, trusts have been utilized by wealthyindividuals and families to protect assets from attackby creditors, minimize taxation, and provide forfamily members in the future without thosebeneficiaries being able to squander assets. Foralmost 20 years in Barbados, tax advisers and otherprofessionals have used trusts in effective taxplanning and wealth management for high net worthpersons and in facilitating commercial transactions.

TYPES OF TRUSTSInternational trust

The International Trusts Act allows trusts to becreated by non-residents for the benefit of non-residents. There are no minimum capitalrequirements for Barbados Trusts and they can beeither of fixed interest or discretionary. AnInternational Trust is taxed at a maximum of 50% onits profits earned in, or remitted to Barbados butthere are no withholding taxes on payments to non-resident beneficiaries.

Private WealthManagement Trustsin Barbados


An International Trust must satisfy the followingconditions:

n The Trust deed must specify that theInternational Trusts Act applies

n At settler and the beneficiaries must be non-residents of Barbados

n The assets of the Trust cannot includeBarbados real estate

One of the principal benefits of the international trustis its asset protection provision. To qualify as aninternational trust:

n at least one trustee must be resident inBarbados;

n settlor must be resident outside of Barbados;

n beneficiary is not a resident of Barbados (withcertain exceptions);

n trust instrument must specify that the ITAapplies;

n immovable property is owned in Barbados;

n income derived within Barbados is taxed orremitted to Barbados

n VAT is zero-rated, exempt from exchangecontrols, and Barbados; withholding tax;

n perpetuity period is up to 100 years; and

n Registration is required but does not becomepublicly available.

The ITA also provides for the establishment ofnon-charitable purpose trusts which may have nonamed or ascertainable beneficiaries. One of the keyattractions of the purpose trust is that it need not beset up for charitable purposes and may therefore beestablished for a group that does not otherwisemeet the criteria of a charity. The purpose trust maybe used in many diverse business transactions.

Domestic Trust

Where the trustee is a Barbados resident individualor company and the trust deed does not specify thatit is an international trust, it will be considered adomestic trust.

Barbados corporate tax will be payable on anytrust income not paid to a beneficiary before the endof the calendar year in which it was earned.

Domestic trusts are generally entitled to treatybenefits. This is because they meet the test ofbeing “subject to tax” in Barbados and hencedeemed resident for purposes of the treatyresidence article. Treaty benefits potentially can

substantially reduces or even eliminates tax in theother treaty jurisdiction.

Domestic trusts have the following features:

n majority of trustees must be Barbadosresidents;

n trustee can be an individual or a trust companylicensed under the Financial Institutions Act1996-1;

n worldwide income is taxable;

n expenses are subject to value added tax(“VAT”) in Barbados;

n exemption from exchange controls may bereceived if the trust has foreign assets, non-resident beneficiaries, and deals primarily inforeign currency;

n perpetuity period of 80 years; and

n no registration or filing requirements.

International Financial Services Act

(Replaced the Offshore Banking Act in June 2002)

In order to establish an International Bank inBarbados, details of the proposed bank must first besubmitted to the Central Bank of Barbados forapproval. Approval must be sought from theMinistry of Finance prior to the incorporation of acompany. A company must have a licence beforeengaging in the banking business.

Applications for a licence are submitted to theCentral Bank whom may issue the licence, subjectto the approval of the Minister of finance. Thislicense is suitable for;

n FAMILY OFFICES

n PRIVATE VENTURE CAPITAL GROUPS

n PRIVATE EQUITY PARTNERSHIPS

n PRIVATE BANKS

n MERCHANT/INVESTMENT BANKING

A licence to operate is issued only to qualifiedforeign banks and eligible companies. Licences areunder the control and oversight of the Central Bankof Barbados. The registration fee is US$50,000.00.International Banks are subject to audit, an annuallicence fee of US$50,000.00 and income tax on asliding scale of 2.5% - 1%.

The International Financial Services Act providesthat dividends, royalties, interest, foreign securitiesfunds, gains and assets generated or managed by alicensee are automatically exempt from theprovisions of the Exchange Control Act.


Cititrust International (Barbados) Inc."Little Chimney", Pishon Court,Lot 2 Clerpark, St. James,Barbados,West Indies.

T. +(246) 417 0411F. +(246) 417 0410E. [email protected]

www.cititrust.bb


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