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DE RUEHWN #0070/01 0321257
ZNR UUUUU ZZH
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FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC 0238
INFO RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCPCIM/CIM NTDB WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHWN/AMEMBASSY BRIDGETOWN

UNCLAS BRIDGETOWN 000070 
 
SIPDIS 
STATE FOR EB/IFD/OIA 
STATE ALSO FOR WHA/CAR - KAREN JO MCISAAC 
 
E.O. 12958: N/A 
TAGS: PGOV EINV EFIN ETRD ELAB KTDB OPIC USTR XL
SUBJECT: 2010 INVESTMENT CLIMATE STATEMENT FOR BARBADOS 
 
REF: 09 STATE 124006 
 
OPENNESS TO FOREIGN INVESTMENT 
 
------------------------------ 
 
 
 
¶1. (U) Barbados is open for business.  The Government of Barbados, 
through Invest Barbados, strongly encourages foreign direct 
investment in Barbados, particularly in industries that create jobs 
and earn foreign currency. 
 
 
 
¶2. (U) 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. (U) The services sector holds the largest potential for growth, 
especially in the areas of financial services, e-commerce, medical 
transcription, 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 agro-processing, alternative and renewable 
energy, and hydroponics.  In the financial services sector, 
Government has improved its regulatory oversight, and the industry 
is thriving under better regulatory standards, designed to prevent 
money laundering and tax evasion. 
 
 
 
¶4. (U) Telecom liberalization is bringing an end to the 
longstanding monopoly of  LIME formerly 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 has 
established policy with respect to Voice over Internet Protocol 
(VoIP) regulations, which was approved on August 15, 2007.  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. (U) Foreign nationals receive the same legal protections as 
local citizens.  The police and court systems are efficient and 
unbiased in commercial matters, and the government operates in an 
essentially transparent manner. 
 
 
 
¶6. (U) Local enterprises generally welcome joint ventures with 
foreign investors in order to access technology, expertise, 
markets, and capital. Barbados' 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.  In the 
past, the government did not approve, or considerably delayed, 
licenses for importers of U.S. ice cream and poultry products, and 
some U.S. fast food franchises. Improvement has been made in this 
area as Government seeks to open the economy to this type of US led 
investment. 
 
 
 
CONVERSION AND TRANSFER POLICIES 
 
-------------------------------- 
 
 
 
¶7. (U) Companies can freely repatriate profits and capital from 
foreign direct investment if they registered with the Central Bank 
of Barbados at the time of investment.  The Central Bank may limit 
or delay conversions depending on the level of international 
reserves under the bank's control. 
 
¶8. (U) The Ministry of Finance controls the flow of foreign 
exchange, and the Exchange Control Division of the Central Bank 
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 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. (U) 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. (U) 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 Caribbean 
Court of Justice (CCJ) replaced London's Privy Council as the 
highest court of appeal for Barbados in 2005. 
 
 
 
¶11. (U) 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. (U) 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. (U) 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. (U) There is no requirement that enterprises must purchase a 
fixed percentage of goods from local sources, but the Government 
encourages local sourcing. 
 
¶15. (U) Companies must meet export performance requirements to take 
advantage of certain tax incentives.  For example, "enclave 
enterprises" 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. (U) 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. (U) 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. (U) 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. (U) 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. (U) The Fiscal Incentives (Amendment) Act  (2001) 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 Affairs, Empowerment, Innovation, Trade, 
Industry and Commerce. 
 
 
 
¶21. (U) Enterprises not obtaining benefits under the Fiscal 
Incentives (Amendment Act (2007)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. The Export Development Allowance 
permits a company to deduct from taxable income an additional 50% 
of what the company spends in developing export markets outside 
CARICOM. 
 
 
 
¶22. (U) 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. 
 
 
 
¶23. (U) Barbados' method of calculating export allowance is as 
follows: 
 
 
 
EXPORT PROFIT AS      PERCENTAGE   REBATE OF INCOME TAX AS 
 
OF TOTAL PROFIT                    PERCENTAGE OF INCOME TAX 
 
                                   ON EXPORT PROFITS 
 
----------------------------       ------------------- 
 
Up to 20 percent                   35 percent 
 
21 percent, but under 41 percent   45 percent 
 
41 percent, but under 61 percent   64 percent 
 
61 percent, but under 81 percent   79 percent 
 
81 percent and over                93 percent 
 
 
 
¶24. (U) 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 tourism 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 island's 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. (U) Regarding taxation, Barbados has entered into double 
taxation treaties with the United States, Canada, CARICOM, China, 
Cuba, Finland, Luxembourg, Norway, Sweden, Switzerland, the United 
Kingdom, Botswana, Mauritius, Malta, 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. (U) Offshore businesses may operate either free of income tax 
(e.g., captive insurance) 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 services or products in 
order to enjoy the following tax rates on gains and profits: 
 
 
 
GAINS AND NET PROFITS           CORPORATE TAX RATE 
 
---------------------           ------------------ 
 
Up to USD 5 million             2.5 percent 
 
USD 5-10 million                2.0 percent 
 
USD 10-15 million               1.5 percent 
 
Over USD 15 million             1.0 percent 
 
 
 
¶27. (U) 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. (U) 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 2.5 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 business to register as Qualifying 
Insurance Companies, entitled to:  a tax rate of 2.8 percent, after 
deducting a foreign currency earnings allowance, and exemption from 
withholding taxes and exchange controls. 
 
 
 
¶29. (U) 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.  The European Union's 2001 WTO 
challenge to the U.S. Foreign Sales Corporations (FSC) has 
eliminated the exemption to U.S. taxes previously enjoyed on 
profits derived from FSC export sales. 
 
 
 
¶30. (U) 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. (U) 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. (U) 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. (U) 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 120 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, 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. (U) 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 Intellectual 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. (U) 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. (U) 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. 
 
 
 
¶37. (U) In the past, obtaining a work permit could be a difficult 
and time-consuming task. However, the International Business 
Customer Charter launched on November 26, 2007, provides for the 
processing of long and short term work permits in two to four weeks 
(2-4) weeks provided that the application is completed in totality. 
Work permits are of two types, short-term (for six months or less) 
and long-term (usually for no more than three years).  To receive a 
work permit for senior management, the company must show that a 
 
Barbadian national or resident does not possess the skill set to 
fill the position. 
 
 
 
¶38. (U) The principal regulatory agencies are the Ministry of 
Finance and the Ministry of Economic Affairs, Empowerment, 
Innovation, Trade, Industry and Commerce.. 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. (U) The Ministry of Economic Affairs, Empowerment, Innovation, 
Trade, Industry and Commerce 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. (U) Companies using or manufacturing chemicals must obtain 
approval of their environmental and health practices from the 
Barbados National Standards Institution and the Ministry of 
Health's Environmental Division. 
 
 
 
¶41. (U) The Ministry of Economic Affairs, Empowerment, Innovation, 
Trade, Industry and Commerce on rare occasions imposes price 
controls, listed in the Official Gazette.  The Government controls 
gasoline prices. 
 
 
 
¶42. (U) 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. (U) The Minister of Economic Affairs, Empowerment, Innovation, 
Trade, Industry and Commerce 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. (U) 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 2.5 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 0.65 percent, 
and residential properties are taxed as follows: 
 
 
 
Up to USD 62,500                          0  percent 
 
USD 62,500 up to 112,500                0.1  percent 
 
USD 112,500 up to 250,000               0.45 percent 
 
USD 250,000 up to 425,000               0.75 percent 
 
 
 
EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT 
 
--------------------------------------------- ----- 
 
 
 
¶45. (U) 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 in the past 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. (U) 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. A 
self-assessment undertaken by the Bank Supervision Department of 
the Central Bank 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. (U) 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. (U) The Barbados domestic financial sector consists of two 
indigenous and four international commercial banks, two of which 
operate merchant banks and one a trust company.  There are also 
35credit unions and one money remitter.  The offshore sector 
includes  3,361 international business companies,  221 exempt 
insurance companies and  50 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. (U) Assets of commercial banks totaled USD  5.7 billion in 
October 2009, and remained relatively consistent throughout the 
year.  The reserve requirement for commercial banks was  2 percent 
of deposit liabilities, and the minimum deposit rate was 3.0 
percent at the end of October 2009.  The weighted average interest 
rate was 4.06 percent on deposits and 10.25percent on loans for the 
same period. 
 
 
 
¶50. (U) Domestic deposits expanded by USD  131.4 million. Accounts 
of private individuals, financial institutions and  statutory 
bodies, , recorded growth of USD  125 million, USD 6.95million, USD 
14.2 million, , and USD  21.8 million, respectively. Deposits for 
business firms declined by USD 60.7 million which was largely 
attributed to the decline in the construction and manufacturing 
sector while Government deposits declined by USD 11.2 million. 
 
 
 
¶51. (U) Credit to the non-financial private sector expanded by USD 
248.7 million well above the USD 110.3 million increase recorded 
for 2007. Lending to the personal sector, professional and other 
services,  construction,  tourism, transportation and distribution 
industries, increased by USD  100.8 million, USD  60.4 million, USD 
36.8 million, USD 13.9 million,  USD 6.6 million and USD  6.25 
million, respectively. Commercial bank lending for industrial and 
commercial mortgages averaged USD  64.8 million at the end of 
October 2009, whereas commercial bank lending to residents and 
non-residents averaged USD 83.3 million and USD 8.2 million 
respectively. 
 
 
 
¶52. (U) 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. (U) 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. (U) 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. (U) The Barbados Stock Exchange (BSE) recorded its second 
consecutive decrease in 2009..  This downturn was reflected in the 
Composite Index, which decreased by 14.5% These declines were 
reflected in market capitalization values that dropped by similar 
percentages over the quarter, as the general slowdown in economic 
activity during the year and the repurchase of 87,551 shares by 
West Indies Rum Distillery Limited in June depressed market 
capitalization values. In 2009, the BSE made significant strides 
towards becoming the first CARICOM securities exchange to launch an 
international trading facility, having received Board approval 
earlier in the year. The BSE intends to attract international 
business companies to list on the international securities market 
in order to raise capital on the Barbados market. This move would 
offer greater support to the international business community and 
complement existing bilateral trade agreements. If approved by the 
regulators, the international trading facility could attract four 
types of listings: companies that would have their primary listing 
in Barbados; companies that would use Barbados as a dual or 
secondary listing; fixed income securities; and, mutual funds. 
 
 
 
POLITICAL VIOLENCE 
 
------------------ 
 
 
 
¶56. (U) Barbados has not experienced political violence since riots 
in the 1930s. 
 
 
 
CORRUPTION 
 
---------- 
 
 
 
¶57. (U) Corruption is not a major problem in Barbados, but some 
U.S. companies have reported unfair treatment by Barbados' Customs 
and Excise Department. 
 
 
 
BILATERAL INVESTMENT AGREEMENTS 
 
------------------------------- 
 
 
 
¶58. (U) 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, Luxembourg, 
Switzerland, the U.K., and Venezuela. 
 
 
 
OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS 
 
-------------------------------------------- 
 
 
 
¶59. (U) In 1999, the U.S. Government's 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. (U) In 2009, Barbados' labor force was approximately 142,000, 
distributed in the following sectors: commerce, tourism, 
government, manufacturing, construction, agriculture, and fishing. 
The total average unemployment rate toward the end of 2009 was 
approximately 10.1 percent. 
 
 
 
¶61. (U) 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 2.50 per hour, is only marginally 
sufficient to meet minimum living standards. The Ministry of Labor 
and  Immigration recommended that companies use this as the de 
facto minimum wage, and most employees earned more than the minimum 
wage. The Labor Department within that ministry was charged with 
enforcing the minimum wage. The standard legal workweek is 40 hours 
in five days, and the law requires overtime payment for hours 
worked in excess. The law prescribes that all overtime must be 
voluntary. 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. (U) 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 Barbados' Social 
Partnership, a tri-partite consultative mechanism. 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. (U) 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. However, local labor leadership is sensitive when it 
perceives a lack of respect for Barbadian laws and customs by 
large, visible foreign employers. It is generally cooperative with 
management in unionized shops. 
 
 
 
¶64. (U) 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.  While there is 
no specific law that prohibits discrimination against union 
activity, the courts provide a method of redress for employees who 
allege wrongful dismissal. The courts commonly awarded monetary 
compensation but rarely ordered reemployment. 
 
 
 
¶65. (U) The law provides for the right to strike, and workers 
exercised this right in practice. All private and public sector 
employees are permitted to strike, but essential workers may strike 
 
only under certain circumstances and after following prescribed 
procedures.  In July 2009,the island's largest telecommunications 
firm announced the closure of its Call Centre and the subsequent 
lay-off of 115 workers. The Union intervened and the termination 
notice was rescinded after an intervention by the Government. There 
were long-running negotiations between the Union and the 
telecommunications company regarding the reinstatement of the 
workers. To date, this issue seems to be resolved as the workers 
have been reincorporated in other departments. Early contact and 
rapport with Labor Ministry officials and union leaders by foreign 
investors may be helpful in terms of fostering labor harmony. 
 
 
 
¶66. (U) The law provides for a minimum working age of 16, and this 
provision generally was observed in practice. Compulsory primary 
and secondary education policies reinforced minimum age 
requirements. The Labor Department had a small cadre of labor 
inspectors who conducted spot investigations of enterprises and 
checked records to verify compliance with the law. These inspectors 
may take legal action against an employer who is found to have 
underage workers. Additionally, legislation to address termination 
of employment and benefits and to prohibit sexual harassment is 
pending. 
 
 
 
¶67. (U) Parliament passed core regulations to implement the 2005 
Occupational Safety and Health at Work Act, but the government had 
not implemented them by year's end. The Labor Department enforced 
other health and safety standards and followed up to ensure that 
management corrected problems cited. The law requires that in 
certain sectors firms employing more than 50 workers create a 
safety committee that could challenge the decisions of management 
concerning the occupational safety and health environment. Trade 
union monitors identified safety problems for government factory 
inspectors to ensure the enforcement of safety and health 
regulations and effective correction by management. The Labor 
Department's Inspections Unit conducted several routine annual 
inspections of government-operated corporations and manufacturing 
plants. Workers had the right to remove themselves from dangerous 
or hazardous job situations without jeopardizing their continued 
employment. 
 
 
 
FOREIGN TRADE ZONES/FREE PORTS 
 
------------------------------ 
 
 
 
¶68. (U) There are no foreign trade zones or free ports in Barbados. 
 
 
 
FOREIGN DIRECT INVESTMENT STATISTICS 
 
------------------------------------ 
 
 
 
¶69. (U) The Government of Barbados compiles statistics on Foreign 
Direct Investment (FDI) in the areas of branches, subsidiaries, 
undistributed earnings, and other investments. The Barbados 
Investment and Development Corporation (BIDC) reported that since 
1995, FDI has increase on average by USD 1.6 million, but in 2003 
alone shot significantly upward by more than USD 80 million from 
the previous year. FDI in 2006 totaled approximately USD 91.5 
million, up from USD 62 million in 2005. 
 
 
 
MAJOR U.S. INVESTORS 
 
-------------------- 
 
 
 
¶70. (U) American Airlines; Barbados Mills (Archer Daniels 
Midland);;;; Chevron Texaco;;; Citicorp Merchant Bank; JetBlue 
Airways; C F Caribbean Flavors; Delta Airlines; Ecolab Barbados 
Ltd. (joint venture); Ernst & Young; Exxon Mobil; Federal Express; 
Lenstec Ltd.; Pricesmart Inc.; SC Johnson; TGI Fridays; Hilton 
 
Worldwide Resorts; PriceWaterhouseCoopers; United Parcel Service 
(UPS); U.S. Airways; and IBM World Trade Corp. 
 
 
 
An American Chamber of Commerce (AmCham), Barbados, has made 
attempts at formation, but has not met regularly. 
 
 
 
For further information, please contact the Economic/Commercial 
Section at the U.S. Embassy. 
 
 
 
Jake Aller 
 
Commercial Officer 
 
US Embassy, Bridgetown, Barbados 
 
Tel: 246-277-4274 
 
Allerjc2@state.gov 
 
 
 
Jonelle M. Watson 
 
Commercial Assistant 
 
US Embassy Bridgetown, Barbados 
 
Tel: 246-277-4052 
 
watsonjm@state.gov 
 
 
 
CONTACTS FOR INVESTMENT RELATED INQUIRIES 
 
----------------------------------------- 
 
 
 
¶71. (U) The following are contacts for investment related 
inquiries: 
 
 
 
Invest Barbados 
 
Trident Insurance Financial Centre 
Hastings, Christ Church 
BARBADOS, BB15156 
 
Tel:  246-626-2000 
 
Fax:  246-626-2099 
 
Email:  info@investbarbados.org 
 
Website: http://www.investbarbados.org 
 
 
 
 
Invest Barbados - New York Office 
 
800 Second Avenue, 2nd Floor 
 
New York, New York 10017-4709 
 
Tel:   212-551-4375 
 
Fax:   212-682-5496 
 
newyork@investbarbados.org 
 
 
 
WEB RESOURCES 
 
------------- 
 
¶72. (U) Additional web resources include: 
 
 
 
BARBADOS 
 
 
 
Invest Barbados website: http://www.investbarbados.org; 
  and The 
 
Industry and International Business Unit of the Ministry of 
Economic 
 
Affairs and Development Website: http://www.barbadosbusiness.gov.bb 
 
 
 
 
UNITED STATES 
 
 
 
Foreign Commercial Service, U.S. Department of Commerce: 
 
http://www.buyusa.gov/caribbean/en/; 
  and 
 
http://www.export.gov/index.asp  
 
 
 
Foreign Agricultural Service, U.S. Department of Agriculture: 
 
http://www.fas.usda.gov/;   and 
 
http://www.export.gov/fas/fas.asp?pName=mr 
 
HARDT