CARICOM remains Barbados’ largest export market – Inniss
Officials are projecting a ten per cent increase in exports to the Caribbean Community (CARICOM), following a five-day trade mission to St Lucia, Grenada and Guyana late last month. Speaking at a media conference called by the Barbados Investment and Development Corporation (BIDC) yesterday to report on the trip, Minister of International Business, Commerce and Industry Donville Inniss noted that between January and September last year, the island exported some $259 million in goods to the 15-nation grouping. “We expect that on the current trajectory we will certainly exceed that in 2016 where we are estimating to get up to $285 million in exports to the CARICOM region from Barbados,” said Inniss, who also pointed out that in 2014 Barbados exported about $284 million in goods to the region. “While these figures may seem significant, we don’t get there just by sitting here in Barbados and believing that others will buy what we produce. That is why the board and management of the BIDC took the decision that we really need to get up and go into the marketplace with those companies and service providers that we know are export-ready, and to do so in a manner that will build strong linkages with partners in the other islands,” he said. Explaining the objectives of the trade mission, Inniss said: “We need to increase the export of goods and services from Barbados worldwide. “We certainly believe that we have to start with the Caribbean region, which is indeed the largest export market for goods and services from Barbados and certainly the one that offers the greatest potential to increase our exports in,” he said. Inniss further explained that St Lucia, Grenada and Guyana were chosen for the mission given their current volume of exports, as well as their established relations with Barbados. Between January and September 2015, $27.3 million in goods were exported to St Lucia, compared to $14.6 million to Grenada and $49.9 million to Guyana. “We believe that we can do better,” said Inniss, noting that the targeted companies were either already exporting or in a position to satisfy any demands from those markets. Another key objective of the mission was to expose the local manufacturers and service providers to “what is happening in the marketplace”. Describing it as a tremendous success, Inniss pointed to the signing of memorandum of understandings “with sister agencies” in St Lucia and Grenada and the strengthening of existing policies with Guyana. BIDC Chief Executive Officer Sonja Trotman also described the mission, which involved approximately 14 company representatives, as a success, saying there would be follow ups to “assist us to increase our exports to CARICOM by ten per cent at the end of 2016 as projected”. Meanwhile, the BIDC’s Manager of Export Promotion and Development Division Paul Waithe said the agency was currently considering a mission to the northern CARICOM countries, which should be followed by a similar mission the southern part of the region. Article compliments Barbados Today.
Barbados moves to establish ICC product
The multimillion dollar International Business and Financial Services Sector is poised to expand its foreign exchange earning capacity, by as much as $2 million within the next 18 months, with an amendment to the Companies (Amendment) Bill 2016 yesterday. Minister of Industry, International Business, Commerce and Small Business Development, Donville Inniss, made this prediction as he outlined the benefits to be accrued in the international insurance industry through the amendment, which will allow for the establishment of Incorporated Cell Companies (ICC) in Barbados. He explained that this change will make Barbados more attractive for investors, whom he has been informed are lining up to invest, particularly from the Latin American Market. At present, 70 per cent of the investors come from Canada, and he assured that this new product offering will be marketed around the world. As it relates to international insurance, Inniss told members in the Honourable Chamber that the Financial Services Commission has been collecting $5 million in license fees annually. “We believe more can be earned, and we believe what we are embarking on in the amendment will help Barbados E-government agencies to collect additional revenue, and provide opportunities for those who service the sector, to earn even more.” He revealed that Barbados is the home to approximately 237 captive insurance companies, and currently ranks seventh in the international insurance industry. “We oftentimes beat ourselves in this country and give the impression that we are not serious players in some industries and some sectors. This little island of 166 square miles, on the cusp of celebrating 50th independence, is today ranked among the top ten domiciles for captive insurers, as reflective by Captive Review, a reputable institutional agency.” He also revealed that, at present, Barbados, through this sector, insures assets globally that have a value of $120 billion. “That is a significant among of money. We sit and review the financial statements for the domestic insurance companies, and they seem significant when you see half a billion in assets.” Deriving from that value, he noted that the gross premiums collected are some $39 billion. “That is a significant amount and ought to firmly locate in our minds Barbados’ position as a serious domicile of choice for the international insurance industry… It is significant to know we are playing such a major role in the global insurance industry.” He explained that an International Cell Company is unlike a segregated cell company, which is not treated like a limited liability or stand alone legal entity. According to Inniss, at apex there is the ICC, and underneath that you can have an unlimited number of incorporated companies, or cells that are treated as separate legal entities. He said this regime allows each cell to be treated as a limited liability company, with all of the attendant benefits, in terms of a board, shareholders and legal obligations. He also explained that ICC cells can conduct business with each other. “This means from the Corporate Affairs Intellectual Property office side, we expect there will be an increase in business and revenue, because each of the entities has to be registered therein to go forward.”
$440 million increase in deposits
The local financial system remains stable with commercial banks continuing to hold the majority, or 60 per cent, of the financial sector’s assets, according to the latest Financial Stability Report 2015. “Commercial banks remain the heart of the financial system, not only due to asset size, but also in terms of their role in facilitating savings and transaction services to other financial entities,” said the report that was released today by the Central Bank of Barbados. Insurance companies account for 14 per cent with assets valued at $3.02 billion or 34 per cent of GDP at the end of September 2015, and trust and finance companies, credit unions and mutual funds each holding less than 10 per cent. The report noted that of the five banks operating in Barbados, the three that are based in Canada accounted for 75 per cent of total bank assets. The other two are based in Trinidad and Tobago. “Similarly, the credit union sector is heavily skewed, as just four of the 35 credit unions account for more than 83 per cent of total assets, membership, loans and deposits. Life insurance companies account for 77 per cent of total industry assets,” the report. “However, most of the assets in the life insurance industry are held by one entity, while the non–life market is more competitive. The largest insurance group has both life and non-life operations however, and accounts for 60 per cent of the total industry. Moreover, its operations span several territories, including the US, and include companies providing mutual funds, asset management and financing. The report, which was produced in collaboration with the Financial Services Commission, said “loans continue to be the mainstay of the banking business, accounting for 60 per cent of assets of deposit taking institutions (DTIs), with mortgage debt being almost half of all credit extended”. “Collectively, the total liabilities of the financial system grew three per cent over the last year to reach $21 billion at September 2015, equivalent to 239 per cent of GDP,” the report said. “The majority of this growth was driven by a $440 million increase in commercial bank deposits during the past 12 months. Of this sum, $367 million were deposited with the Central Bank and $33 million placed in other investments. Trust and finance companies contributed to this increase with a $36 million increase in deposits, which were placed with other financial institutions,” it added. The report further stated that credit unions saw an increase of $120 million in members’ shares and deposits, and expanded their loan portfolio by $93 million, while increasing their investments by $15 million. “On the assets side, while banks’ growth stemmed from their holdings of short term Government securities and cash, the credit unions’ resulted from increased lending to members,” the report said. While the fifth issue of the Financial Stability Report noted that commercial banks dominated the financial space, it said there was “a slight erosion of their share of total assets over the last decade”. “While maintaining lending to individuals, banks have recorded a contraction in lending to business over the previous three years. In contrast, the credit unions’ focus on personal/consumer credit allowed their share of total assets to rise to nine per cent, compared to six per cent in 2005,” it said. Article compliments Barbados Today.
Barbados diversifying international business sector
Barbados can further benefit from the international business sector by diversifying its offerings. This now that incorporated cell companies (ICC) are being considered as an addition to the local international business landscape. Member of Parliament for St. James South, Donville Inniss, spoke about the significant contribution the international business and financial services sector is currently making to Barbados, while stressing the potential for it to do even more. He revealed that Barbados benefited from over $900 million from that sector each year and that the country could increase that amount by diversifying the options for doing international business in the island. The Minister therefore introduced amendments to the Companies Act, which would allow businesses to have incorporated cell companies. That would allow persons in the international business sector to establish separate enterprises, which are legally distinct from the original company. A move which Inniss believes can greatly benefit Barbados, as it can lead to an expansion in the types of industries which seek to be incorporated in the island. Article compliments LOOP Barbados.
AG sees no problem with citizenship by investment
Barbados can benefit from the citizenship by investment programme which other countries in the region are utilizing. This is the view of Attorney General of Barbados, Adriel Brathwaite. Speaking in the House of Assembly on Tuesday, he stated that Barbados could also benefit from a citizenship by investment programme similar to that of other Caribbean states. Antigua and Barbuda, Dominica, as well as St. Kitts and Nevis have all developed such programmes and have experienced some setbacks because of them. Countries such as the United States, as well as international agencies have criticised the programmes for harbouring persons seeking to engage in financial fraud, as well as those involved in tourism. While he recognises the dangers of such a programme, Brathwaite believes that Barbados can implement such a programme as another offering in the international business sector. The Minister did not go into details, but suggested that some changes in the system of bureaucracy in the island would need to change. He was speaking during the debate on the Companies Amendment Bill, 2016. Article compliments LOOP Barbados.
Antigua & Barbuda plans to open office in UAE
The government has announced intention to establish an embassy, trade and economic office in the United Arab Emirates (UAE) in the capital of Abu Dhabi, which will be managed by Casroy James, Resident Ambassador designate, reports the Antigua Observer. Foreign Affairs Minister Max Fernandez said yesterday the office is scheduled to be operational in the next six to eight months. “The trade and economic office will serve primarily as an investment promotional agent and will be executing Antigua’s Investment agenda, very much like the agenda being rolled out in the Antigua & Barbuda Consulate in Miami,” Fernandez said. He stated further the agenda includes the active and strategic promotion of investment in the hotel and tourism sector, real estate and home property acquisition, ship or yacht registration, aircraft registration and the dissemination of accurate and timely information on the country’s Citizenship by Investment Programme (CIP). “The government is committed to signing both an investor protection agreement, as well as an avoidance of double taxation agreement with the government of the UAE. The finalisation of these documents will establish the framework necessary to ensure a path for additional investor dollars to our shores,” the minister said.
Central bank governor says Belize is compliant with money laundering regulations
In a 2015 report of international narcotics control strategy, Belize was one of seven Caribbean countries that were listed as a major money laundering country, reportsLove FM. In the report, the US Government noted that Belize’s encouragement of the growth of offshore financial activates is making the country vulnerable to money laundering through offshore banks, insurance companies, trust service providers, mutual fund companies and international business companies. During yesterday’s press conference, Central Bank Governor, Glenford Ysaguirre spoke of the country’s position on the money laundering issue. “When you look at the size of the Belizean economy or even the size of the financial sector that would be hard for me to understand. Our banking sector is about $4 billion dollars and so I can’t see how in terms of the global scheme of things that we would be classified as such. I think one of the issues that we face as a nation in terms of these AML is the fact that we lie smack in the middle of the drug transshipment route to the US and so that would be an issue that I think the State Department would have with all the countries in Central America; being looked at as transhipment points.” Governor Ysaguirre went on to speak on the crucial role of the media in their reports whilst using a recent case to say that sufficient information was not sought. “I think that is one area that we can seek to do a little bit more and that is not something only for the authorities whether it be the Central Bank or the Government but also for our press in terms of how we report things. There was a news item in the Canadian press most recently about a Ponzi scheme by the Banner Ponzi scheme that was being run by two Canadian gentlemen. The report came out that they were charged for money laundering and for operating the Ponzi scheme and that it mentioned that they held bank accounts in Belize and some other Caribbean jurisdiction and perhaps Cyprus I think it is and of course our local press picked that up but I don’t think that anybody took the effort to call either the Central Bank or the FIU to verify what had happened and what involvement we have. “If one would have spoken to the FIU I think you would have learnt that that particular case was solved and to a large extent by the assistance that the FIU provided to Canadian authorities. That case started way back in 2013 from the former director of the FIU and it came about as a result of a suspicious transaction that was reported by one of our banks here in Belize. With information gathered over the last two years they were able to put together a case to the extent that in 2015 they were able to charge these guys. I think that is testimony to the strength of the AML CFD regime that we have in place that it had helped to resolve such a major crime and I think in that regard we are not doing enough to promote the image of the jurisdiction and the contribution we are making on the international level to fight these issues.” According to Prime Minister Dean Barrow, the banks in Belize are compliant with the FATCA and will continue to do so. “Every single banking institution in this country is FATCA compliant and so information governing accounts held in our banks by US citizens or even US residents that information is sent back to the US authorities on a routine basis. With respect generally to drug trafficking the governor is absolutely right, this is a feature of where we are. I keep saying the pencil of God has no eraser and as long as we are so squarely in these transshipment routes our vulnerability which is what these reports focus on will continue.” Aside from the local banking sector’s compliance to financial regulations, Belize is also compliant to several agreements signed onto in the region when it comes to the transhipment of drugs and money laundering. “There is a gamut, a whole spectrum of cooperative relations that we engage in bilaterally and regionally. We are part of the Central American Security System, we are part of the initiative that the United States launched, this is why we acquire these expensive items such as the new Coast Guard vessels, this and other reasons we are acquiring helicopters. We play our role, we offer our cooperation and collaboration in full measure and nobody can fault us in that regard.” In addition to the seven Caribbean countries named in the list, so were the United States, the UK and Canada. Article compliments IFC Review.
Mauritius to begin automatic tax info exchange from September 2018
Mauritius will start automatic exchange of tax information with other nations only from September 2018, as it has postponed by a year implementation of global common reporting standard on tax matters, reports Zee News. The delay could impact Indian authorities’ efforts to gather more tax-related information from Mauritius, which is allegedly being used by some entities to route illegal funds into India. Once the standard is in force, there would be stringent measures to curb illicit fund flows, including the requirement to carry out due diligence procedures to record tax residence of clients opening new accounts. Joining global efforts to curb flow of black money and tax avoidance activities, Mauritius, back in 2014, agreed to bring into force the common reporting standard for automatic exchange of tax information with other countries. Initially, Mauritius was to implement the standard from January 1, 2016. “The first exchange of information under CRS (Common Reporting Standard) will take place as from September 2018. The requirement to apply due diligence procedures to record tax residence of clients opening new accounts, takes effect as from January 1, 2017,” Mauritius Revenue Authority has said. In a recent communique to stakeholders, the authority also said that in due course, a technical committee would be convened to discuss and finalise the guidance notes for the implementation of CRS. Queries sent to Mauritius Ministry of Finance and Economic Development on the issue remained unanswered. The standard have been prepared by Paris-based think tank OECD (Organisation for Economic Cooperation and Development) after extensive consultations. Meanwhile, the proposed amendments in the Indo-Mauritius tax treaty have been hanging fire for many years amid India’s concerns over the island nation being allegedly used to route illicit funds into the country. India has concerns that Mauritius, which is one of the top sources of FDI into the country, is being used for round-tripping of funds. Round-tripping is usually referred to routing of domestic investments through Mauritius to take advantage of the tax treaty between the two countries. A significant number of global firms, including those from the US and Europe, have traditionally been using the island nation to route their investments in India to benefit from an Indo-Mauritius DTAA (Double Taxation Avoidance Agreement) in force since 1983.
IDB joins partnership to advance digital payments
The Inter-American Development Bank (IDB) has joined the Better Than Cash Alliance, a partnership of governments, companies, and international organizations that works to accelerate the transition from cash to digital payments in order to drive inclusive growth and reduce poverty. Membership in the Alliance will contribute to further the IDB’s efforts to promote the financial inclusion of low-income people in Latin America and the Caribbean (LAC), with the aim of improving their economic security and enabling them to increase savings and assets by harnessing innovative payment technologies. The new partnership will promote knowledge sharing and the development of digital payments ecosystems, by bringing together key public and private sector actors. These efforts will expand the access and use of quality and affordable financial products for previously excluded and underserved populations, and safeguard the stability of the financial system. “We are delighted that the IDB has become the first regional development bank to join the Better than Cash Alliance, because we share the organization’s commitment to promoting financial inclusion as a way to reduce poverty and improve people’s lives,” said Bernardo Guillamon, manager of the IDB´s Office of Outreach and Partnerships. The IDB has worked with a number of countries throughout the region to help them transition to digital payments for government transfers to low-income families. In addition, the Bank has encouraged governments to use new technologies, such as tablets and ATM machines, to provide financial education and simplify bill-paying for consumers who previously did not have access to banking services. Such policies not only promote financial inclusion but result in cost savings and greater efficiency for governments. The Multilateral Investment Fund (MIF), member of the IDB Group, through its Technology for Financial Inclusion Programme, TEC-IN, has partnered with more than 15 institutions in the region to develop business models—including the use of mobile technology and the development of merchant networks—to expand the access to payments, savings, and microcredit services, which for some individuals represent a first-time experience. MIF’s partnership with a major telecommunication company in Paraguay has allowed more than a million Paraguayans – over a quarter of the country’s adult population – to use their mobile phones to make person-to-person money transfers and pay for services. Through a country-wide network of merchants, they can also access cash and make deposits in a more efficient and secure manner. “We are very pleased to welcome the Inter-American Development Bank to our Alliance,” said Dr. Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance. “Its work has been a driving force in the promotion of digital payments and financial inclusion in the region, and particularly the work of the Multilateral Investment Fund is an example from which other regional development banks can learn. Most governments in Latin America and the Caribbean are realizing the incredible potential in the transition from cash to digital payments, led by Mexico, Peru and Colombia, which already are members of the Alliance.”
New EU tax blacklist floated
The European Commission plans to reform national tax blacklists of EU member states by replacing them with a common EU-wide blacklist. The proposal is part of new measures against corporate tax avoidance presented by the Commission last week, reports the Cayman Compass. The Cayman Islands was one of 30 “non-cooperative jurisdictions” blacklisted by at least 10 EU states in a list published in June 2015. The list drew heavy criticism from those included on the list and entities such as the Organization for Economic Cooperation and Development, which said that a number of countries identified by the EU, including Cayman, were either fully or largely compliant with international tax transparency standards and had committed to automatic exchange of tax information. The list, based on national anti-avoidance measures that tend to vary considerably, was also criticized for the inclusion of developing countries, which often do not have the capacity to implement the tax governance framework demanded by the EU. Despite the criticism, the Commission said the publication of the list had the immediate effect of alerting countries and “prompting new discussions” on good tax governance, “allowing third countries to clarify issues related to their tax regimes and member states to detail their concerns. “This increased transparency also encouraged those Member States with listing processes to scrutinize their lists and ensure that they were well-founded, accurate and up-to-date,” the Commission said in a communication on an “External Strategy for Effective Taxation.” The document argues that in order to ensure a level playing-field, the EU needs stronger instruments to respond to non-EU countries that refuse to respect tax good governance standards. EU states and the European Parliament had voiced strong support for a single EU framework for addressing tax governance concerns with third countries that would replace the current medley of national systems. The national systems were based on a recommendation by the Commission to consider transparency, information exchange and fair tax competition as the three criteria for assessing third countries’ tax regimes. However, despite the general consensus on this approach, the Commission said it has become clear that EU states have “used the recommended criteria in a patchwork manner, or not at all.” The Commission therefore advocates a three-step process which would first shortlist countries that should be prioritized for screening by the EU by fall 2016, assess those countries against an updated set of EU good governance criteria and then include countries that are non-cooperative in an “EU list of problematic tax jurisdictions.” “Clear conditions for de-listing will also be set out for each jurisdiction added to the common EU list. Listing a jurisdiction should always be considered as a last resort option. It should be reserved for those jurisdictions that refuse to engage on tax good governance matters or fail to constructively acknowledge EU concerns with their tax systems,” the document said. However, once a jurisdiction has been added to the EU list, all member states should apply common counter-measures against it. These counter-measures should serve both to protect member states’ tax bases and to “incentivize” the jurisdiction in question to make the necessary improvements to its tax system, the Commission said. Cayman continues to be listed as “non-cooperative” in tax matters by Belgium, Bulgaria, Croatia, Greece, Lithuania, Portugal and Spain. The plans also include proposals that would prevent EU funds from being invested in or channeled through entities in non-EU countries that do not comply with the principles of “fair tax competition.” The EU Financial Regulation already prohibits the routing of EU funds through entities in third countries that do not meet international tax transparency standards. But the Commission believes these provisions could be extended to also encompass the EU’s principles for fair tax competition. “In the past, the Commission has had to block certain projects submitted by international financial intermediaries because they involved unjustifiably complex tax arrangements through harmful or no tax regimes in third countries. Strengthening the provisions to include fair tax competition requirements could prevent such cases from arising,” the Commission proposal said. “The European Parliament has also asked for measures to ensure that EU funding cannot be routed through low/no tax jurisdictions.
US lawmakers slam ‘hostile’ EU tax climate
The top Republican tax writers in Congress have waded into a brewing tax war between the US and the European Union, decrying the “hostile” environment big American companies are facing in the EU, reports the Financial Times. The intervention from lawmakers, who rarely agree with the Obama administration, came soon after the government complained the European Commission was unfairly targeting US groups such as Apple and Amazon in a drive against tax avoidance. “American companies are seeing a very hostile environment, typically in Europe,” said Charles Boustany, chair of a House of Representatives subcommittee looking to change the taxation of US companies’ foreign earnings. The controversial “sweetheart” tax deals that US multinationals struck with some EU countries are seen by Republicans as symptoms of a broken US tax code, which they want to overhaul to stop companies looking for softer treatment abroad. “I think the situation is urgent,” Mr Boustany told reporters late on Monday after a meeting of lawmakers. “We talked a lot about that today. That’s one of the reasons why we want to take this on as quickly as possible.” EU officials flatly reject accusations of anti-Americanism in their tax avoidance crackdown. They suggest that ahead of congressional elections in November lawmakers are jostling to be seen to defend the interests of big corporate donors. Brussels is also dismissive of the Obama administration’s argument that EU states have no right to tax income from US multinationals. Frank Clemente, executive director of Americans for Tax Fairness, a liberal advocacy group, said it was “pathetic” to last week see Robert Stack, a US Treasury official, complaining about the commission’s probes. “He ought to spend his time fulminating against the tax dodging these companies are doing rather than criticising European policymakers for trying to close the loopholes,” Mr Clemente said. Republicans also want to deter merger transactions known as inversions, which US companies are using to cut their American tax bills by relocating to Ireland, the UK and other parts of the EU. But Republicans and Democrats remain divided on the right way to shake up the tax system and the distractions of the presidential election make legislative action highly unlikely this year. Sandy Levin, the top Democrat on the House Ways and Means committee, which handles tax policy, said in a Tuesday hearing that Republicans were pushing policies to help the corporate elite rather than ordinary workers. “We have an issue of income inequality. Republicans have failed while they have dominated in this town to do a single thing to address inequality, except to propose more tax cuts for the very wealthy,” he said. Kevin Brady, the Republican chairman of the committee, said the root cause of international tax controversies was the punitive treatment of US companies’ overseas earnings, which are taxed at up to 39 per cent when repatriated. To avoid that levy, US companies are keeping “stranded” cash overseas. That offshore cash pile has ballooned to US$1.1tn, with the largest balances belonging to Apple, Microsoft, Google, Cisco and Oracle, according to Moody’s, a credit-rating agency. Mr Brady said on Monday: “Our focus is on the tax code that’s just no longer competitive and a global environment where other countries are looking to both lower rates, to capture those stranded profits [and] frankly isolate the US from being competitive.” Washington often argues that the huge stockpiles of offshore profits will one day be brought back to the US and taxed. The EU contends that US multinationals have booked certain income in Europe in their accounts, but paid an artificially low tax rate on this profit through selective fiscal arrangements. The EU is therefore pushing to ensure that the income generated in Europe is taxed at the regular corporate rate. For Apple, the difference between the rates could amount to billions of dollars. European politicians are also increasingly sceptical about whether US multinationals will ever repatriate their profits. Margrethe Vestager, the EU competition commissioner, has stressed that America’s “double taxation” agreements must not become “double non-taxation” agreements. Article compliments IFC Review.
Save the Date: BIBA Networking Mingle (February 26th, 2016)
The Barbados International Business Association will be hosting its first Networking Mingle of the year on February 26th, 2016. Further details to come closer to the event.
Save the Date: BIBA Networking Mingle (April 29th, 2016)
The Barbados International Business Association will be hosting its second Networking Mingle of the year on April 29th, 2016. Further details to come closer to the event.
Save the Date: BIBA Networking Mingle (June 24th, 2016)
The Barbados International Business Association will be hosting its third Networking Mingle on June 26th, 2016. Further details to come closer to the event.
Ms Connie Smith – Presentation at 2015 IBFS Conference
Protocol having been established, it gives me great pleasure to join Dr. Worrell and the Hon. Donville Inniss in welcoming you to this year’s International Business and Financial Services (IBFS) Conference. Each year, BIBA is pleased to support the Central Bank of Barbados in its efforts to bring together representatives from the public sector agencies key to the success of this sector, to dialogue with and share views with BIBA and other private sector representatives on how to further advance our collective goals. It is interesting to note that the Bank has identified the opening up of the Cuban market as one of the potential growth areas for the Barbados IBFS sector. The shift in United States policy that has created this potentiality could likely lead to more multinational companies targeting Cuba and, with a long-standing bilateral investment treaty and double taxation agreement between Barbados and Cuba already in place, I believe that we are well poised to capitalize on this interest. Ironically, as we sit and meet today to learn more Cuba, right at this very moment, history is being created in Panama at the convening of the Seventh Annual Summit of the Americas – for the first time in history, Cuba has a seat at the table for this Summit. I therefore look forward to the first panel presentation unlocking this potential for us. It is well recognized that Barbados has all of the factors necessary to continue to grow the international business sector. Indeed, we continue to show year-on-year growth in new entrants to the sector, even during the height of the international economic turbulence within the last seven years. The most recent figures show that Barbados continues to attract new IBC registrations in excess of 400 annually since 2007, and at an average rate of 458 new registrations annually over that period. In relation to international insurance, we continue to maintain our number at just over 240 active entities, and while on record our international banks have dwindled from 40 at the end of 2013, to 32 at the end of 2014, we should note that much of the business that was being carried on by companies holding banking licences, is now being conducted within IBCs, ISRLs, or just regular Barbados companies. However, we must remain ever cognizant of the challenges that threaten to undermine our growth potential. And unfortunately some of the more major challenges are not of our own making. The changes made to the domestic taxing environment in Canada last year have had a significant effect on a market segment that we have historically enjoyed. This is reflected in the number of entities currently holding banking licenses as I referenced earlier – another reason that I am keen to hear the presentations from the panel in a few minutes. Increasingly, some members of BIBA have been raising concerns with us about the hurdles they and their clients are facing as clients of local commercial banks. As was ventilated during our first BIBA luncheon seminar for this year, the strict requirements being imposed on international business clients by commercial banks is as a result of the risk profile with which Barbados is viewed by the international correspondent banks that mediate between the local commercial banks and the global financial community. This is an extremely untenable situation as Barbados seeks to fulfil the mandate of its sector’s strategic plan and become the International Business and Wealth Management Centre of choice in this hemisphere. It also does not bode well for our attempts to expand our treaty network into Africa and Latin America and attract more business from those source markets. I think that it is time that we refreshed our strategy in terms of expanding the correspondent banking relationships within our commercial banking sector and I am offering BIBA’s support to the Central Bank of Barbados in leading the development of a new strategy to attract new players into this arena. However, I must reiterate, as I always do, that if we are to keep the new businesses that we attract, and hold on to the ones that are already here, we must improve the ease with which we conduct business in Barbados. We need to put service level agreements in place that guarantee clients in the public and private sector certainty of process when they engage with a business facilitation agency. I would say that the recent implementation of guidelines for all public sector employees by the Office of Public Sector Reform is a step in the right direction and I would encourage that Office to undertake as its next project, to produce benchmarking guidelines for government agencies, especially the client-facing ones, so that there are standards to which they can be held accountable. Our judicial, business incorporation and immigration systems are the first places that I would recommend we start. On that note, we have a stimulating day ahead of us and far be it for me to delay the Minister in delivering his keynote presentation. I look forward to hearing from the presenters and yourselves on some of the key issues that I have raised, as well as the other topics under consideration, during the course of today. Thank you for your time and attention.
BIBA President’s Update January 2015
President’s Update delivered by Ms. Connie Smith, President of BIBA, at the January 2015 BIBA Luncheon Seminar, Hilton Barbados, Needham’s Point, St. Michael Protocol having been established, Good Afternoon Ladies & Gentleman, it gives me great pleasure to have so many of you join us this afternoon at our first Luncheon Seminar for 2015. This marks our first collaborative seminar with The Barbados Bankers Association and we look forward to many such cooperative initiatives in the future. At BIBA, we know there are many cross-cutting issues that affect both the international and domestic business sectors equally and we continue to seek to provide opportunities where these issues can be ventilated and solutions arrived at in a mutually beneficial way. This afternoon we are here to facilitate an exchange of views on commercial banking as we work together to ensure that the private sector is also contributing to improving the ease of doing business in Barbados. Before we launch into the meat of the matter, please indulge me for a few minutes as I update you on recent undertakings by BIBA. · This past Tuesday, a BIBA delegation met with the Minister of Finance and the Commissioner of the Barbados Revenue Authority (BRA), Ms. Margaret Sivers, to discuss a number of pressing issues affecting the international business sector. One of the matters on which we engaged them was the difficulty faced under the former Inland Revenue Department in having outstanding tax refunds owed to dissolved subsidiaries remitted to their parent companies. We are pleased to advise that the BRA has promised to establish a methodology for making these payments. · We are also satisfied that the Commissioner is committed to resolving the indebtedness to our companies in terms of outstanding Value Added Tax and Corporate Tax refunds as the BRA’s cash flow situation permits. · The Commissioner has also asked me to let you know that if any of you had previously submitted requests, for example a decision on a matter, she has asked that you resubmit your requests to the new BRA email address. The old mailboxes are choc full and while they are wading through them, this is appreciably taking some time. · In a recent meeting with the Minister of International Business, the Hon. Donville Inniss, we also raised challenges related to income tax concessions for expatriate staff in the sector. At the Minister’s request, BIBA is compiling a business case for maintaining these concessions so that we can continue to attract the international skills and talents required in and for Barbados as we build out our knowledge transfer base. We had also discussed with the Minister the difficulties being experienced in the granting of Special Entry and Reside Permits to High Net Worth Individuals and their families. As a result, a meeting is being convened with Minister Inniss, Senator The Hon. Darcy Boyce, Invest Barbados, the Chief Immigration Officer, and BIBA to resolve this matter. · BIBA also made recommendations to Minister Inniss regarding the addition of a representative from BIBA to the Barbados Treaty Negotiation Team. This recommendation was favourably received by the Minister and a Cabinet Paper is to be drafted to support this change. · We are also pleased to be able to update you on some legislative developments. A draft of the proposed Limited Liability Partnership legislation was received from the Ministry of International Business for review. Our Legal Profession Committee, along with the Institute of Chartered Accountants of Barbados, and the Barbados Bar Association, have all provided extensive feedback on this draft, which is being conveyed to the Ministry. The Incorporated Cell Companies legislation proposed by BIBA is now in the process of being drafted by the Chief Parliamentary Council’s (CPC) office. The CPC and the Ministry of International Business are also still reviewing the International Trust and Corporate Service Providers legislation to take into account objections that BIBA had made to some provisions of the draft Bill. I thank you for your attention and now, let’s move along to the main item on today’s agenda. The members of the panel are here as our guests to update us on the dynamic and oftentimes challenging environment that not only we see as challenging, but I am sure that they do as well. We hope to have a very strategic, unemotional discussion on the changing ecosystem and the way in which we can navigate the challenges while still achieving Barbados’ and our own firms’ strategic objectives. This is not intended to be a forum to deal with any individual or specific client situation. Let me encourage you to meet separately with the bankers afterwards on those issues. And with that, I ask you to welcome to the podium, our First Vice President, Mr. Andrew Alleyne, who will moderate the proceeding presentations and discussion.
Mr. Reya Ali-Dabydeen – “The OECD’s BEPS Initiative: Will Barbados be Among the Winners or Losers'”
“The OECD’s BEPS Initiative � Will Barbados be Among the Winners or Losers?” was the thought-provoking question discussed by featured presenter, Mr. Reya Ali-Dabydeen, partner with Ernst & Young, Canada, at the May 22, 2014, BIBA luncheon seminar held at the Hilton Barbados. A PDF copy of Mr. Ali-Dabydeen’s presentation can be downloaded from here. Download
BIBA announces new Board for 2015-2016
The Barbados International Business Association (BIBA) announced its new board for the period 2015-2016 at the Association’s recent Annual General Meeting. The new board members are: President – Mr. Andrew Alleyne 1st Vice President – Mr. Gregory McConnie 2nd Vice President – Mr. Marlon Waldron Treasurer – Mr. Nicholas Crichlow Secretary – Ms. Julia Taggart Directors of the Association comprise: Mr. Elliott Barrow Ms. Janice Burke Mr. Peter Douglas Ms. Melanie Jones Ms. Cadian Drummond Ms. Dominique Pepin Ms. Tara Frater BIBA’s Annual Report for 2014-2015 was also released. Please click here to view. It includes the President’s Report, as well as reports from the Executive Director and the various committees, such as the Legal Profession, Insurance, Banking, Marketing and Communications, Tax and IBC’s and Service Providers. A summary of the activities undertaken by the BIBA Charity, BIBA-Canada and an overview of International Business Week 2014 are also included. Executive Director, Henderson Holmes, thanked members for their past and continual support for the upcoming administrative year and beyond.
BIBA hires new MACO
The Barbados International Business Association (BIBA) officially welcomes Ms Mialisa Fenty as its new Marketing and Communications Officer. In this new role, she will lead BIBA’s marketing and communications efforts, and will report directly to the Executive Director, Mr Henderson Holmes. Miss Fenty brings to this position 14 years of experience in the media and communications field during which she has amassed a number of skills including graphic and web design, PR writing and effective social media management. Prior to joining BIBA, Ms Fenty worked as a Freelance Communications Specialist, an Online Sub-Editor at the Nation Publishing Company and as an Editorial Executive at the Barbados Advocate, to name a few. “I am thrilled to welcome Ms Fenty to our team,” said Mr Holmes. “Her strong media and communications background, solid graphic design experience and extensive knowledge of the digital media industry will greatly assist us as we position our Association for future growth.” Ms Fenty currently holds a Diploma in Media and Communication specialising in Print and Online Journalism and a Bachelors in Media and Communication speciaiising in Multimedia from the University of the West Indies in Mona, Jamaica. In 2012 she completed her Masters in Digital Media from the University of Sussex in the United Kingdom. “BIBA has built a very strong and well-perceived brand in the international business sector,” said Fenty. “I am excited to be joining BIBA in this capacity as the company continues to be the catalyst in the development of international business in Barbados”.
BIBA Comment on Barbados Ranking in World Bank Ease of Doing Business Report
Improve the ease of doing business in Barbados and the additional Government revenue will naturally follow. This was the stance taken by Barbados International Business Association (BIBA) President, Ms. Connie Smith, as debate continues to swirl around regarding the appropriate measures that Government needs to take to balance its finances. “We have reports in the media of investors trying to get major projects off the ground but are being stymied by the local agencies who can make it happen; we know of local entrepreneurs who want to get up and running to do business with the rest of the world but we lack the enabling environment here to propel this forward,” said Smith. The BIBA leader pointed to the fact that once the stumbling blocks that hobbled enterprise in Barbados were removed, the island could see exponential growth in the number of new domestic and foreign business on the island, leading to higher employment, more tax revenue and additional fees flowing into government’s coffers. “Unfortunately, the World Bank’s Doing Business series of reports shows that Barbados continues to slide with speed down the yearly rankings relative to the performance of other countries in our region, far less across the world. The fact that St. Lucia, Trinidad and Tobago, and Jamaica, all surpass us in the ease of doing business requires some serious introspection. It is frankly ridiculous that it could take as long as 270 days to request and receive planning permission for a new construction; or that a new electrical connection could take up to 87 days,” said Smith. “What is important is for us to set a national agenda for change, to identify what we want to see ourselves achieve over the next two or three years. The Ministry of International Business has set out a Strategic Plan for our sector, but we have to move beyond this to devise a holistic strategy that will benchmark the type of improvements that we want to see achieved across the public and private sector. “We have to commit ourselves to dealing with these issues if we are to improve our conditions and pull ourselves out of the quagmire in which we now find ourselves,” said the international business executive.
Barbados Elevation To Vice Chairmanship Of OECD Global Forum Good For International Business
The Barbados International Business Association (BIBA) views Barbados’s elevation to the Vice Chairmanship of the Global Forum of the Organization for Economic Cooperation and Development (OECD) as a validation of its high standing among international business and financial centres. This was the view expressed by Ms. Connie Smith, President of BIBA, as she reacted to the news of the jurisdiction’s new position following the October 28 to 29 seventh meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) in Germany. “This is two pieces of good news now that Barbados has also been removed from Colombia’s ‘blacklist’ following an agreement between our nations to pursue a tax information exchange agreement. Colombia is one of the important gateways to the Latin America market for us and we expect some positive growth from this development,” said Ms. Smith. The Global Forum, which has set an ambitious global agenda since 2009 to reform the exchange of tax information across its membership of 122 nations plus the European Union (EU), overseas the Peer Review compliance process, under which Barbados recently went through its Phase 2 Assessment. “The Global Forum is the place where policies are created that are fed back to the decision-makers in the G20, which then have a major impact on how business operates in the major financial and corporate centres of the world, and ultimately ramifications for how we do business here in Barbados. This will now allow us to input into the shaping of these policies,” said Ms. Smith. Barbados will be one of 18 other members of the Steering Committee, which includes 13 from the OECD, EU and the G20 nations. “Barbados now really has to make its voice heard on decisions of national importance to our international business sector, plus the access to which we can now avail ourselves in this select committee will be invaluable,” said Ms. Smith. Barbados succeeds Bermuda and will adopt the position in 2015 and hold it for two years. This will coincide with the key focus in 2015 on the final preparations for the review process on the new global standards for automatic exchange of information (AEOI) and the next round of reviews for exchange of information (EOI) on request, which will both commence in 2016. A total of 89 Global Forum member jurisdictions have committed to implement reciprocal exchange of tax information on an automatic basis, with the first exchanges starting from 2017 or 2018 subject to the completion of necessary legislative procedures. In 2015, jurisdictions will provide AEOI implementation plans so that a report can be made to the Global Forum plenary next year. Reviews are expected to start in 2016, as the legal and regulatory frameworks of jurisdictions committed to first exchanges in 2017 should be finalised by then.