Legal Framework and Formation Rules and Fees
Trusts in Barbados are governed by English common law and by the Trustees Act Cap 250 as amended, which deals with the powers of trustees. There is no registration requirement or stamp duty; trustees can be non-resident as long as one is resident. A resident corporation acting as trustee must be licensed under the Offshore Banking Act. Exchange controls apply to local trusts.
The Hague Convention has not been implemented.
The International Trusts Act 1995 introduced purpose trusts and asset protection trusts, as well as strengthened protection against forced heirship provisions, non-recognition of foreign judgements, and protection against creditors.
Creditors have three years in which to set aside the terms of a trust, but can only do so if they can establish an intent to defraud. A successful creditor can only set aside the terms of the trust in so far as he is prejudiced - he can't overset the whole thing unless that is necessary to satisfy him.
The rule against perpetuities does not apply, and accumulation of income is permitted for up to 100 years.
The following conditions must be fulfilled when a trust is formed:
the settlor must be non-resident when the trust is created and at subsequent times when property is added to the trust;
trust property must not include Barbadian real estate or an interest in it;
no beneficiary other than a Barbadian offshore entity can be a resident of Barbados at the time of creation of the trust, or at the time of any subsequent addition of property to the trust;
at least one of the trustees must be resident in Barbados.
Note that beneficiaries can include Barbadian offshore entities - this means an exempt insurance company, an offshore bank, and an international business company. The Act defines 'resident' to include: ordinarily resident individuals, bodies, whether incorporated or not, majority-owned by residents; and trust management companies.
The Act lays down specific confidentiality rules, protecting the identity of settlor and beneficiaries, the workings of the trustees, the reasons behind trustees' actions, accounting information, etc. Confidentiality can only be broken by the Court or at the request of a beneficiary.
Barbados Seeks New Revenues In 2015 Budget Thursday 18/6/2015Barbados has published its 2015/2016 Budget, which aims to further reduce the territory's deficit with a raft of changes to the VAT regime and cuts to allowances and deductions.