Barbados must build momentum in the international business sector
Saturday January 29 2011 | 08:46 PM

BARBADOS needs to continue the momentum in building on its Double Taxation Treaties.

"The challenge for Barbados is to build on its recent successes of concluding Double Taxation Agreements ( DTAs)," said Bruce Zagaris, a Washington based Attorney- at- Law.

He addressed the Barbados International Business Association BIBA luncheon on Monday. Zagaris spoke on the subject, "Challenges and Opportunities Facing Barbados in the US and Other Markets in 2011 and Beyond".

He believes that to continue this momentum the Barbados government will have to train more professionals with knowledge and experience in negotiating DTAs.

"This will mean involving multiple ministries and collaborating with the private sector," Zagaris reasoned in his address, which dealt with a wide range of issues.

He stated, "Barbados will want to try to take advantage of the Economic Partnership Agreement (EPA) between CARIFORUM and the EU. The EPA is interesting for tax and business planning professionals because it opens significant new opportunities for transactions between the EC and CARIFORUM countries and will give rise to a number of transactions".

The Attorney-at-law stated that while the EPA does not cover reduction of double taxation and tax information exchange policy, investors can take advantage of a number of double tax treaties.

"For instance, Barbados, which is a member of CARICOM Double Taxation Agreement, has treaties with several EU countries, such as Finland, Norway, Sweden, the UK, Malta, the Netherlands, Switzerland, Italy, and Austria. A future opportunity and challenge is to develop significant financial and non-financial service products to attract foreign investment," Mr. Zagaris explained.

According to him, "Barbados will want to look for strategic partners. In this regard, it may want to prioritise Brazil. Although it has had difficulty concluding a DTA with Brazil, it could and should be concluding other agreements, such as a BIT, a agreement to produce films, tourism agreements, etc".
He believes that cultivating Brazil means that "your private sector and government would have to take some steps to facilitate more contacts, more exposure to Brazilian culture, starting with the language, and some of the aforementioned agreements".

In addition, he said, "Venezuela, Colombia, Cuba, among others, offer rich cultural opportunities for interaction. Already Barbados has a DTA and BIT with Venezuela and Cuba".

Zagaris indicated that, "in the near term future, your markets with the US, Canada and the UK may decline, partly due to the Canadian law allowing exempt surplus to other Trade and Investment Enhanced Agreements (TIEA) signatories, and to the anti-avoidance fervour in each of the three countries. Similarly, your China work will dip as a result of the PRC protocol".

In terms of the US, Barbados should try to conclude a bilateral investment treaty, a bilateral tourism agreement, and tourism agreements with some of the states, especially in the Southeast, so that it can do joint tourism marketing and other joint ventures. All the new treaties will provide potential business where professionals can identify and take advantage of opportunities".

He pointed out, "Your private sector and government will want to continue efforts to strengthen your laudable ratings by Transparency International. The use of Barbados as a regional centre for non-profit organisations should be further developed".

Zagaris added that another "positive development has been the realisation by many of the Barbados civil and foreign service of the importance of financial services and the interaction and co-operation between your public and private sectors".