VZCZCXYZ0000
RR RUEHWEB

DE RUEHWN #0085/01 0251511
ZNR UUUUU ZZH
R 251511Z JAN 07
FM AMEMBASSY BRIDGETOWN
TO SECSTATE WASHDC 4074

UNCLAS BRIDGETOWN 000085 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EB/IFD/OIA 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ETRD ELAB PGOV KTDB XL
SUBJECT: INVESTMENT CLIMATE STATEMENT 2007 
 
REF: 178303 
 
202943 
 
OPENNESS TO FOREIGN INVESTMENT 
------------------------------ 
 
¶1.  Barbados is open for business.  The Government of 
Barbados, through the Barbados Investment and Development 
Corporation (BIDC), strongly encourages foreign direct 
investment in Barbados, particularly in industries that 
create jobs and earn foreign currency. 
 
¶2. The Government offers special incentive packages for 
foreign investments in the hotel industry, manufacturing, 
and offshore business services.  For example, International 
Business Companies (IBCs) have a maximum tax rate of 2.5 
percent on income and exemption from foreign exchange 
controls. 
 
¶3.  The services sector holds the largest potential for 
growth, especially in the areas of financial services, e- 
commerce, tourism, educational, health, and cultural 
services.  In agriculture, the slow demise of the sugar 
industry has opened up land for other agricultural uses, 
and investment opportunities exist in the areas of Sea 
Island cotton and hydroponics.  In the financial services 
sector, offshore banks and insurance companies saw a 
temporary drop-off in activity as the Government improved 
regulatory oversight in 2001 with amendments to the 
International Business Companies Act of 1992 and the Money 
Laundering Prevention and Control Act of 1988, but the 
industry is thriving again under better regulatory 
standards, designed to prevent money laundering and tax 
evasion. 
 
¶4.  Telecom liberalization has brought an end to the 
longstanding monopoly of Cable and Wireless, and has 
introduced competition, lowered the cost of international 
telecommunications, and enhanced the telecom 
infrastructure.  Since 2000, the Government has gradually 
allowed more companies to compete in the sector, and by 
early 2005 there was full competition in wireless and long 
distance service.  The Government is still considering 
Voice over Internet Protocol (VoIP) regulations, and that 
sector should open up in the future. To prepare a workforce 
skilled in advanced IT services, the Government and 
educational institutions such as the Barbados Community 
College and the University of the West Indies have 
undertaken educational and training initiatives. 
 
¶5. Barbados is proud of its tradition of the rule of law. 
Foreign nationals receive the same legal protections as 
local citizens.  The police and court systems are 
relatively efficient and unbiased in commercial matters, 
and the government operates in an essentially transparent 
manner. 
 
¶6.  Local enterprises generally welcome joint ventures with 
foreign investors in order to access technology, expertise, 
markets, and capital. BarbadosQ economy is small, however, 
and new enterprises that might compete with entrenched 
local establishments, especially in the retail and 
restaurant sector, may face a de facto veto of their 
license by local interests.  The Government did not approve 
licenses for importers of U.S. ice cream and poultry 
products, and some U.S. fast food franchises, such as 
TGIFQs and Subway. 
 
CONVERSION AND TRANSFER POLICIES 
-------------------------------- 
 
¶7.  Companies can freely repatriate profits and capital 
from foreign direct investment if they registered with the 
Central Bank at the time of investment.  However, the 
Central Bank may limit or delay conversions depending on 
the level of international reserves under the bank's 
control. 
 
¶8.  The Ministry of Finance controls the flow of foreign 
exchange, and the Exchange Control Division of the Central 
Bank of Barbados executes fiscal policy under the Exchange 
Control Act.  Individuals may apply through a local bank to 
convert the equivalent of USD 3,750 per year for personal 
travel and USD 375.00 per day, per person, for up to a 
maximum of USD 25,000 for business travel.  To convert any 
amount over these limits, one must apply to the Central 
Bank. 
 
EXPROPRIATION AND COMPENSATION 
------------------------------ 
 
¶9.  The Barbados Constitution and Companies Act contain 
provisions that permit the Government to acquire 
compulsorily property for public use upon prompt payment of 
compensation at fair market value.  The Embassy is not 
aware of any outstanding expropriation claims or 
nationalization of foreign enterprises in Barbados. 
 
DISPUTE SETTLEMENT 
------------------ 
 
¶10.  Barbados bases its legal system on the British common 
law system.  The Attorney General, the Chief Justice, 
Puisne Judges, and Magistrates administer justice in 
Barbados.  The new Caribbean Court of Justice (CCJ), 
replaced London's Privy Council as the highest court of 
appeal for Barbados in 2005. 
 
¶11.  The United States and Barbados are both parties to the 
World Trade Organization (WTO).  The WTO Dispute Settlement 
Panel and Appellate Body resolve disputes over WTO 
agreements, while courts of appropriate jurisdiction in 
both countries resolve private disputes. The Barbados 
Arbitration Act (1976) and the Foreign Arbitral Awards Act 
(1980), which recognizes the 1958 New York Convention on 
the Negotiation and Enforcement of Foreign Arbitral Awards, 
contain provisions for arbitration of investment disputes. 
Parliament has written The New York Convention's provisions 
into domestic law, but has yet to ratify the convention. 
 
¶12.  Barbados is also a member of the International Center 
for the Settlement of Investment Disputes (ICSID), also 
known as the Washington Convention.  Additionally, 
individual agreements between Barbados and multilateral 
lending agencies have provisions calling on Barbados 
officials to accept recourse to binding international 
arbitration to resolve investment disputes between foreign 
investors and the state. 
 
PERFORMANCE REQUIREMENTS AND INCENTIVES 
--------------------------------------- 
 
¶13.  While there are no formal performance requirements, 
government officials will more likely approve investments 
they believe will create jobs and increase exports and 
foreign exchange earnings.  There are no requirements for 
participation either by nationals or by the Government in 
foreign investment projects. 
 
¶14.  There is no requirement that enterprises must purchase 
a fixed percentage of goods from local sources, but the 
Government encourages local sourcing. 
 
¶15.  Companies must meet export performance requirements to 
take advantage of certain tax incentives.  For example, 
Qenclave enterprisesQ must produce goods exclusively for 
export outside the CARICOM region.  Foreign investors must 
finance their investments from external sources or from 
income that the investment generates.  When a foreign 
investment generates significant employment or other 
tangible benefits for the country, the authorities may 
allow the company to borrow locally for working capital. 
 
¶16.  There is no requirement that locals own shares of a 
foreign investor's enterprise, but some restrictions may 
apply to share transfers. The Companies Act does not permit 
bearer shares. Foreign investors do not need to establish 
facilities in any specific location, although there are 
zoning restrictions. 
 
¶17.  Most investment incentives in Barbados are tax 
incentives, although there are some special programs for 
manufacturers. Potential investors should contact a 
licensed accountant and/or lawyer in Barbados to find out 
which incentives fit best with their goals. 
 
¶18.  In the manufacturing sector, the Barbados Investment 
and Development Corporation (BIDC) has established ten 
well-equipped industrial parks with subsidized rent. The 
BIDC may also supply limited training grants and free 
technical assistance through two programs with a focus on 
developing local businesses:  the Export Grant and 
Incentive Scheme and the Technical Assistance Program. The 
former helps both locally and foreign-owned companies (but 
only those foreign companies with management or marketing 
branches in Barbados) by defraying export costs such as the 
preparation and shipment of samples and the development of 
marketing materials.  The latter helps companies solve a 
range of operational problems. 
 
¶19.  The BIDC also offers local small businesses access to 
its Small Business Development Center, with conference room 
facilities, communications services, short-term office 
space, and a commercial library. To further help 
manufacturers, the Central Bank of Barbados has established 
an export credit guarantee scheme, covering pre-shipment 
financing requirements and post-shipment credit risks for 
manufacturing companies. 
 
¶20.  The Fiscal Incentives Act (1974) provides a maximum 
15-year tax holiday to any manufacturer of an approved 
product, provided that it meets the definition of an 
enclave enterprise: manufacturing exclusively for export 
outside of CARICOM; manufacturing approved products 
containing a specified percentage of local value added; or 
being highly capital intensive. Under the Fiscal Incentives 
Act, such enterprises may import duty-free equipment, spare 
parts, and raw materials from outside CARICOM. Dividends 
and other distributions to shareholders during the tax 
holiday are also exempt from the payment of income tax. 
Non-resident shareholders liable to tax in their country of 
residence are subject to Barbados withholding tax at a 
lower rate. To qualify for these incentives, the enterprise 
must apply to the Ministry of Economic Development. 
 
¶21.  Enterprises not obtaining benefits under the Fiscal 
Incentives Act and generating export profits (other than 
from exports within CARICOM) may receive an export 
allowance expressed as a rebate of corporation tax (between 
35-93 percent) on those profits.  The maximum rebate of 93 
percent applies if more than 81 percent of an enterprise's 
profits result from extra-regional exports.  Such 
enterprises are also entitled to a 50 percent rebate of the 
import duty applicable to all imports for use in 
manufacturing.  Companies may request additional relief 
from the Customs Department based on the ratio of exports 
to local production.  The Export Development Allowance 
allows a company to deduct from taxable income an 
additional 50 percent of what the company spends in 
developing export markets outside CARICOM. 
 
¶22.  Initial Allowances or Investment Allowances of up to 
40 percent on capital expenditure are available for 
businesses making capital expenditures on machinery and 
plants, or on an industrial building or structure.  Annual 
depreciation allowances on such expenditures are also 
available. Under Section 14A of the Income Tax Act, any 
manufacturing company in Barbados can enjoy tax reductions 
based on the percentage of its profits derived from export 
income, as follows: 
 
¶23.  Rebate of Income Tax as a percent of Total Export 
Profits 
 
Percent of Profits from Exports      Rebate of Corporation Tax 
--------------------------------     ------------------------- 
 
Up to 20 percent                     35 percent 
More than 20 and up to 40 percent    45 percent 
More than 40 and up 60 percent       64 percent 
More than 60 and up 80 percent       79 percent 
Over 80 percent                      93 percent 
 
¶24.  In the tourism sector, a Market Development Allowance 
allows a company to deduct an additional 50 percent of what 
it spends encouraging tourists to visit Barbados.  Under 
the Tourism Development Act of 2002, businesses and 
individuals that invest in the tourist sector can write off 
capital expenditure and 150 percent of interest. They are 
also exempt from import duties, the value added tax, and 
environmental levies on furniture, fixtures and equipment, 
building materials, supplies, and equity financing. The Act 
expands the definition of tourist sector to include not 
just accommodation, but restaurants, recreational 
facilities, and services.  The Act encourages the 
development of attractions that emphasize the islandQs 
natural, historic, and cultural heritage, and also 
encourages construction of properties in non-coastal areas. 
The Minister of Tourism must approve all projects under 
this legislation. 
 
¶25.  Regarding taxation, Barbados has entered into double 
taxation treaties with the United States, Canada, CARICOM, 
China, Cuba, Finland, Norway, Sweden, Switzerland, the 
United Kingdom, and Venezuela.  A new amendment to the tax 
treaty between the U.S. and Barbados went into effect on 
January 1, 2005. The revised tax treaty strengthens 
measures to prevent U.S. companies from using Barbados as a 
tax shelter on income earned in the United States. 
 
¶26.  Offshore businesses may operate either free of income 
tax (e.g., captive insurance, foreign sales corporations) 
or with a tax rate from 1 to 2.5 percent. An International 
Business Company (IBC) must by the terms of its 
incorporation export 100 percent of its manufacture in 
order to enjoy the following tax rates on gains and 
profits: 
 
Gains and Net Profits              Corporate Tax Rate 
---------------------              ------------------ 
Up to USD 10 million               2.5 percent 
USD 10-20 million                  2.0 percent 
USD 20-30 million                  1.5 percent 
Over USD 30 million                1.0 percent 
 
¶27.  An IBC may import machinery and equipment into 
Barbados free from certain taxes and customs duties.  IBCs 
also are exempt from withholding tax and tax on the 
transfer of their assets and may also make certain foreign 
exchange transactions free of exchange controls.  IBCs in 
the information services sector receive a special tax rate 
of 2.5 percent on profits, full exemption from import 
duties on production-related equipment, including 
computers, full and unrestricted repatriation of capital, 
profits, dividends, rental of subsidized office space, and 
training grants to subsidize worker training. 
 
¶28.  International financial service companies also enjoy 
several tax incentives. Under the Exempt Insurance Act, a 
company incorporating with a minimum capital of USD 
$125,000 and at least one Barbadian director is eligible 
for taxation on profits at zero percent for the first 
fifteen years, and 2 percent on the first USD $250,000 of 
profits thereafter, as well as an exemption from a 
withholding tax on royalties and exchange control 
restrictions.  Its beneficial shareholders also must not be 
persons resident in CARICOM. In 1998, legislation allowed 
companies involved in the international insurance 
businesses to register as Qualifying Insurance Companies, 
entitled to:  a tax rate of 2.8 percent, after deducting a 
foreign currency earnings allowance; and 2) an exemption 
from withholding taxes and exchange controls. 
 
¶29.  The International Trust Act allows non-residents to 
create trusts for the benefit of non-residents, with no 
minimum capital requirements and no withholding taxes, but 
subject to 40 percent tax on profits earned in or remitted 
to Barbados. Exempt Societies of Restricted Liability, 
which may not acquire land in Barbados or transact business 
with CARICOM residents, enjoy certain concessions for up to 
30 years, including exemption from exchange controls and 
withholding tax on dividends, royalties, interest, or other 
interest paid to non-residents. 
 
¶30.  The Shipping Incentives Act of 1982 provides 
concessions to shipping companies engaged in the operation 
of passenger ships, leasing of ships, shipbuilding, 
maintenance or repair. The concessions include a ten-year 
exemption on tax and custom duties on materials connected 
with the shipping activities. 
 
RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT 
-------------------------------------------- 
 
¶31.  There is a constitutional right for nationals and non- 
nationals to establish and own private enterprises and 
private property in Barbados. These rights also pertain to 
the acquisition and disposition of interests in private 
enterprises. 
 
¶32.  No industries are officially closed to private 
enterprise, although the Government reserves the right not 
to allow certain investments.  Some activities, such as 
telecommunications, utilities, broadcasting, banking, and 
insurance, require a license from the Government. There is 
no percentage, or other restrictions, on foreign ownership 
of a local enterprise or participation in a joint venture. 
 
¶33.  The Government of Barbados has been engaged for the 
past several years in efforts to strengthen the private 
sector by divesting itself of a number of costly and often 
unprofitable state-owned enterprises. Since 1992, the 
Government has sold over USD 123.4 million of its 
commercial property to private investors through the sale 
of shares in Barbados External Telecommunications (to Cable 
& Wireless of the U.K.), Barbados Telephone Company (to 
Cable & Wireless), Barbados Mills (to Archer Daniels 
Midland), the Arawak Cement Company, Barbados Dairy 
Industries, Barbados National Oil Company, National 
Petroleum Corporation, Barbados Tourism Investment Inc., 
and Heywoods resorts. In July 2003, the Government sold its 
controlling stake in the Barbados National Bank to Republic 
Bank of Trinidad. 
 
PROTECTION OF PROPERTY RIGHTS 
----------------------------- 
 
¶34.  The Barbados Government has improved the legal regime 
for property rights. Civil law protects physical property 
and mortgage claims. Barbados signed the Paris Convention 
on Intellectual Property Rights (IPR), the Madrid accords, 
and is a member of the United Nations World Industrial 
Property Organization (WIPO). The Government of Barbados 
adopted a new Copyright Act in August 1998, and amended it 
in 2004 to provide for tougher penalties. The Government 
also approved legislation in September 1998 for Integrated 
Circuits Topography and Protection against Unfair 
Competition and Geographical Indications. In addition, the 
Government recently revised The Trademark and Industrial 
Designs Acts to meet world standards. Article 45 of the 
Protocol Amending the Treaty that established CARICOM 
commits all 15 members to implement stronger IP protection 
and enforcement. 
 
¶35.  IPR infringement in most areas is small-scale, 
although video stores sell and rent pirated DVDs and 
videos, and other stores sell illegal copies of computer 
software, designer items, and music. 
 
TRANSPARENCY OF REGULATORY SYSTEM 
--------------------------------- 
 
¶36.  Barbados uses transparent policies and effective laws 
to foster competition and establish clear rules for foreign 
and domestic investors in the areas of tax, labor, 
environment, health, and safety.  The regulatory system can 
be slow at times, and some companies have complained that 
the Ministry of Finance does not give adequate 
justification for rejecting a license (in the case of 
American fast food restaurants kept out of the market). 
 
¶37.  Obtaining a work permit can be a difficult and time- 
consuming task. To receive a work permit for top 
management, the company must show that a Barbadian national 
or resident cannot fill the position.  Work permits are of 
two types, short-term (for six months or less) and long- 
term (usually for no more than three years). 
 
¶38.  The principal regulatory agencies are the Ministry of 
Finance and the Ministry of Economic Affairs and 
Development. The Ministry of Finance regulates the Exchange 
Control Authority of the Central Bank of Barbados, 
including inward investment, registration of foreign 
capital, currency accounts, and repatriation of capital and 
earnings. Local on-shore companies must meet fairly 
stringent exchange control requirements, but the Government 
welcomes investment by non-residents with external sources 
of financing. 
 
¶39.  The Ministry of Economic Affairs and Development 
administers the Companies Act and other statutes dealing 
with company affairs.  The Companies Act is modeled on the 
Canada Business Corporations Act, and creates flexibility 
and simplicity for the incorporation and operation of 
companies in Barbados. 
 
¶40.  Companies using or manufacturing chemicals must obtain 
approval of their environmental and health practices from 
the Barbados National Standards Institution and the 
Ministry of HealthQs Environmental Division. 
 
¶41.  The Ministry of Commerce, Consumer Affairs, and 
Business Development on rare occasions imposes price 
controls, listed in the Official Gazette.  The Government 
controls gasoline prices. 
 
¶42.  Barbados enacted legislation in 2000 to create the 
Fair Trading Commission (FTC) to provide consumer 
protection in telecommunication and utility services. There 
is no specific antitrust legislation in Barbados. 
 
¶43.  The Minister of Economic Affairs and Development or 
the Minister of Finance must approve foreign investment. 
The Chief Town Planner must approve new construction or 
changes in land use. Zoning restrictions protect 
agricultural land, and the Government pursues policies to 
ensure environmental integrity. 
 
¶44.  The Central Bank must approve real property purchases 
for non-residents. If a non-resident uses foreign funds and 
pays for the property in Barbados, the Central Bank will 
normally approve the transaction.  When they sell the 
property, non-residents need to pay the 18 percent Property 
Transfer Tax in addition to brokerage and legal fees. The 
Commissioner of Land Tax charges an annual fee based on the 
assessed property value.  The Government taxes hotels on 50 
percent of the improved value at 0.7 percent, and 
residential properties on 100 percent of the improved value 
at between 0.2 and 1 percent. 
EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT 
--------------------------------------------- ----- 
 
¶45.  Barbados has a small stock exchange, an active banking 
sector, and opportunities for portfolio investment.  Local 
policies seek to facilitate the free flow of financial 
resources, unless there is a shortage of funds.  The 
Government has, in the past, intervened in the local credit 
market to control interest rates, limit the volumes of 
funds available for borrowing, and borrow on the local 
market. However, the Central Bank has raised interest rates 
five times in the past 18 months without any government 
intervention.  There are a variety of credit instruments in 
the commercial and public sectors that local and foreign 
investors may access. 
 
¶46.  The Government has implemented a continuous review 
process for legislation in the financial sector in an 
effort to strengthen and improve the regulatory regime in 
order to attract and facilitate retention of foreign 
portfolio investments. The Bank Supervision Department of 
the Central Bank undertook a self-assessment in 2000, and 
found their on-shore and offshore sectors in general 
compliance with the Basel Core Principles of Effective 
Banking Supervision utilizing the Basel Committee's Core 
Principles Methodology. The International Financial 
Services Act, which replaced the Offshore Banking Act in 
June 2002, incorporates the Basel standards, and provides 
for on-site examinations of offshore banks.  This allows 
the Central Bank to augment its offsite surveillance system 
of reviewing anti-money laundering policy documents and 
analyzing prudential returns. 
 
¶47.  Under the authority of the Money Laundering and 
Financing of Terrorism Prevention and Control Act, Cap 129, 
the Government established the Anti-Money Laundering 
Authority and its operating arm, the Financial Intelligence 
Unit, in 2000. The Bank Supervision Department of the 
Central Bank of Barbados, in conjunction with the Anti- 
Money Laundering Authority in 2001, issued in 2001 the 
Anti-Money Laundering Guidelines for Licensed Financial 
Institutions, which were revised in 2006. 
 
¶48.  The Barbados domestic financial sector consists of two 
indigenous and three international commercial banks, two of 
which operate merchant banks and one a trust company. 
There are also 38 credit unions and one money remitter. 
The offshore sector includes 4,932 international business 
companies, 426 exempt insurance companies and 54 offshore 
banks (December 2006 figures).  Starting in 2001, the 
Government required Barbados institutions and legal 
entities to reveal the identity of beneficiaries receiving 
dividends and/or interest. 
 
¶49.  Assets of commercial banks totaled USD 4.1 billion in 
December 2005, and remained relatively consistent 
throughout the year.  The reserve requirement for 
commercial banks was 17 percent of deposit liabilities, and 
the minimum deposit rate was 4.75 percent at the end of 
¶2005.  The weighted average interest rate was 4.12 percent 
on deposits and 10.63 percent on loans for the same period. 
 
¶50.  Domestic deposits expanded by BBD 585.8 million in 
2005 following growth of BBD 484.7 million in the previous 
year.  Accounts of private individuals, financial 
institutions, statutory bodies, business firms, and 
Government recorded growth of BBD 221.2 million, BBD 170.8 
million, BBD 65.7 million, BBD 50.4 million, and BBD 26 
million respectively. 
 
¶51.  Credit to the non-financial private sector expanded by 
BBD 730 million in 2005, following growth of BBD 439.2 
million in 2004.  Demand for residential mortgages totaled 
BBD 129.9 million and drove up personal lending by BBD 
349.8 million.  Lending to tourism, professional and other 
services, distribution and construction expanded by BBD 
155.7 million, BBD 110 million, BBD 47.1 million and BBD 
51.4 million, respectively. 
 
¶52.  The Securities Exchange Act of 1982 established the 
Securities Exchange of Barbados (SEB), which was re- 
incorporated as the Barbados Stock Exchange (BSE) in 2001. 
The 1982 Act was replaced by the Securities Act, Cap 318A, 
which removed regulatory responsibility for the securities 
market activity from the BSE. This Act helped to strengthen 
the regulatory framework and development of the capital 
market.  In 1997, the BSE began trading corporate stocks 
and fixed income securities, including Government bonds 
(not commercial paper).  Activities on the BSE include 
regional cross-border trading arrangements for shares 
listed on the Trinidad and Jamaica stock exchanges. 
¶53.  The BSE operates a two-tier electronic trading system 
comprised of a Regular Market and a Junior Market. 
Companies applying for listing on the Regular Market must 
observe and comply with certain requirements. Specifically 
they must inter alia have assets of not less than USD 
500,000 and adequate working capital based on the last 
three years of their financial performance, as well as 
three-year projected performance.  Companies must also 
evidence competent management and be incorporated under the 
laws of Barbados or other regulated jurisdiction approved 
by the Securities Commission.  Applications for listing on 
the Junior Market are less onerous, requiring minimum 
equity of one million shares at a stated minimum value of 
USD 100,000. Reporting and disclosure requirements for all 
listed companies include interim financial statements, and 
an annual report and questionnaire. Non-nationals must 
obtain exchange control approval from the Central Bank of 
Barbados to trade securities on the BSE. 
 
¶54.  The Barbados Stock Exchange (BSE) is moving to full 
immobilization of traditional share certificates where 
clearance and settlement is fully computerized through a 
Central Securities Depository. However, investors requiring 
a traditional certificate can be accommodated for a small 
fee and the transfer is adjudicated by the Securities 
Commission under the Property Transfer Tax Act. Mutual 
Funds are also regulated by the Securities Commission in 
accordance with the Mutual Funds Act, Cap 320B. 
 
¶55.  The performance of the BSE in 2005 was, at best, 
moderate. There was a general decline in the volumes and 
values of shares traded when compared with 2004.  This was 
also a regional trend, as indicated by similar movement in 
the Jamaica and Trinidad & Tobago stock exchanges. Despite 
the decline in traded volume, the index and market 
capitalization rose and outperformed all of the other 
regional markets. The Barbados Central Securities 
Depository, Inc. (BCSDI) increased its income by 38 percent 
over the previous year and reduced expenses by 15 percent, 
reversing a loss position in 2004, and registered a profit 
in 2005.  There are 27 companies listed on the BSE, 
comprised of 20 domestic and seven cross listed companies. 
 
POLITICAL VIOLENCE 
------------------ 
 
¶56.  Barbados has not experienced political violence since 
riots in the 1930s. 
 
CORRUPTION 
---------- 
 
¶57.  Corruption is not a major problem in Barbados. 
 
BILATERAL INVESTMENT AGREEMENTS 
------------------------------- 
 
¶58.  Barbados has no bilateral investment treaty with the 
United States, but has a double taxation treaty and tax 
information exchange agreement. Barbados has bilateral 
investment treaties with Canada (CARIBCAN), China, Cuba, 
Germany, Italy, Switzerland, the U.K., and Venezuela. 
 
OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS 
-------------------------------------------- 
 
¶59.  In 1999, the U.S. GovernmentQs Overseas Private 
Investment Corporation (OPIC) signed with Citibank to 
establish a USD $200 million Investment Facility for the 
Caribbean and Central America, as one means of encouraging 
investment and stimulating economic development. The 
Caribbean Development Bank, which is based in Barbados, 
administers this program. OPIC provides financing and 
political risk insurance to viable private sector projects, 
helps U.S. businesses invest overseas, and fosters economic 
development in new and emerging markets. 
 
LABOR 
----- 
 
¶60.  In 2006, BarbadosQ labor force was approximately 
125,000, distributed in the following sectors: commerce, 
tourism, government, manufacturing, construction, 
agriculture, and fishing.  The unemployment rate during 
2006 hovered between 9 and 10 percent. 
 
 
¶61.  Wages in Barbados are among the highest in the 
Caribbean. Minimum wages for only a few categories of 
workers are administratively established and enforced by 
law. The minimum wage for shop assistants, USD 2.13 per 
hour, is only marginally sufficient to meet minimum living 
standards. Most employees earn more.  The standard workweek 
is a 40-hour, 5-day week. Custom and practice dictate 
overtime payment for hours worked in excess of 40 hours. 
Workers are guaranteed a minimum of fourteen days of annual 
leave and are covered by unemployment benefits legislation 
and National Insurance (social security) legislation. 
 
¶62.  Trade unions, and the leaders of the trade union 
movement, enjoy a strong voice in the labor and economic 
affairs of the country through their participation in 
BarbadosQ Social Partnership, a tri-partite consultative 
mechanism. The major unions recognize the advantages 
accruing to Barbados from foreign investment and foreign 
expertise, and they are generally flexible and 
accommodating in their dealings with employers. 
Approximately 25 to 30 percent of the labor force belongs 
to trade unions, but this small percentage belies the power 
and importance of unions in Barbados; all key sectors are 
unionized, with all private and public employees in 
agriculture, tourism, and at the airport and seaport 
belonging to a single union confederation. 
 
¶63.  Local labor leadership is sensitive when it perceives 
a lack of respect for Barbadian laws and customs by large, 
visible foreign employers, but is generally cooperative 
with management in unionized shops.  In late 2002 and early 
2003, workers at the new Hilton complex walked off the job, 
protesting numerous terminations and what they called 
unfair working conditions on the construction site. 
However, work on the site resumed shortly after the 
walkout.  There were no long-term work stoppages called by 
unions in 2006. 
 
¶64.  Barbados does not have labor legislation that mandates 
a legal process necessary for unions to achieve status as 
bargaining agents, and employers have no legal obligation 
to recognize unions under the Trade Act of 1954, but most 
employers do so when a majority of their employees desire 
representation.  Early contact and rapport with Labour 
Ministry officials and union leaders by foreign investors 
may be helpful in terms of fostering labor harmony. 
Additionally, legislation to address termination of 
employment and benefits and to prohibit sexual harassment 
is pending.  The Government is currently developing 
regulations to implement the 2005 Occupational Safety and 
Health legislation. 
 
FOREIGN TRADE ZONES/FREE PORTS 
------------------------------ 
 
¶65.  There are no foreign trade zones or free ports in 
Barbados. 
 
FOREIGN DIRECT INVESTMENT STATISTICS 
------------------------------------ 
 
¶66.  The Government of Barbados compiles no official 
statistics on Foreign Direct Investment (FDI). However, the 
Barbados Investment and Development Corporation (BIDC) 
reported that BBD 26,694,227 was invested in 2004, up from 
BBD 9,798,518 in 2003 and BBD 8,604,936 in 2002. Most 
recent data are from 2004, which show new investment 
totaling BBD 3,899,000, up from BBD 2,783,700 in 2003 and 
BBD 1,350,000 in 2002.  (Note:  these are not official FDI 
statistics, but are numbers based on a BIDC survey.) 
 
MAJOR U.S. INVESTORS 
-------------------- 
 
¶67.  American Airlines; Barbados Mills (Archer Daniels 
Midland); Bondhus Corp.; Carib Supply (BQdos) Ltd.; Charles 
¶T. Gamble Industries; Chevron Texaco; Cingular Wireless; 
Cirrus Logic; Citicorp Merchant Bank; Continental Airlines; 
C F Caribbean Flavors; Delta Airlines; Ecolab Barbados Ltd. 
(joint venture); Ernst & Young; Exxon Mobil; Federal 
Express; Lenstec Ltd.; MSI International Ltd.; Pricesmart 
Inc.; PriceWaterhouseCoopers; 
United Parcel Service (UPS); U.S. Airways; and Waggoner 
Barbados Ltd. 
 
CONTACTS FOR INVESTMENT RELATED INQUIRIES 
----------------------------------------- 
 
¶68.  The following are contacts for investment related 
inquiries: 
 
Barbados Investment and Development Corporation (BIDC) 
Pelican House 
Princess Alice Highway 
Bridgetown, Barbados 
Tel:  246-427-5350 
Fax:  246-426-7802 
Email: bidc@bidc.org 
Website: http://www.bidc.org 
 
BIDC Q Miami Office 
150 Alhambra Circle, Suite 1000 
Coral Gables, Florida 33134 
Tel:  305-442-2269 
Fax:  305-567-2844 
 
BIDC - New York Office 
800 Second Avenue, 2nd Floor 
New York, New York 10017-4709 
Tel:  212-867-6420 
Fax:  212-682-7496 
Email: bidc@bidc.com 
 
WEB RESOURCES 
------------- 
 
¶69.  Additional web resources include: Barbados Investment 
and Development Corporation (BIDC) Website: 
http://www.bidc.org; and The Industry and International 
Business Unit of the Ministry of Economic Affairs and 
Development Website: http://www.barbadosbusiness.gov.bb 
 
OURISMAN