Offshore Trusts Report: Barbados
Supervisory and Licencing Regime and Fees
There is a sophisticated community of professional
advisers on trust matters in Barbados. The Financial Institutions
Act, 1996-16 is the legislation under which trust and finance companies
are licensed and administered in Barbados. This Act establishes
the statutory requirements on such areas as licensing.
In July 2000, Barbados pledged to make changes to
its financial supervisory regime in order to have its name removed
from the OECD 'unfair tax competition' blacklist; in response, the
Central Bank issued 'know your customer' guidelines applying to
all licensed financial institutions including trust management firms
in March, 2001.
Trusts are taxed as persons in Barbados,
but an International Trust with nonresident settler and beneficiaries,
and without Barbadian real estate assets, will at worst be taxed
only on income remitted to Barbados; this is easily avoided, of
course. If other Barbadian offshore entities are trust beneficiaries,
they are treated as nonresident.
Local (domestic) trusts are taxed as separate entities.
Very tax-efficient structures can be formed using
offshore trusts in combination with International Business Companies
for international securities management.