Officials in the international business sector here are in somewhat of a wait and see mode as Barbados continues to make necessary legislative and regime changes governing the sector.
This means companies seeking to attract new international business to Barbados have not been as robust in their efforts as they would have liked given current uncertainties.
However, president of the Barbados International Business Association (BIBA) Julia Hope remains upbeat that the sector would soon be able to once again attract tremendous business.
She explained that legislation governing the sector should go before Cabinet by the end of this year, which should make Barbados more compliant with international laws.
“We understand that we have got drafting skills that we are going to outsource to get the work done. There is a lot of work and it simply has to be done,” said Hope.
Barbados is widely considered a low tax jurisdiction, but as per the Organization for Economic Co-operation and Development (OECD) Forum, the country is required to make suitable amendments in order to ensure that the revised regime was compliant with international laws and practices.
The main purpose of the current review process is to identify features of preferential tax regimes that create opportunities for Base Erosion and Profit Shifting (BEPS), which the OECD describes as a planning or tax strategy used by companies to avoid taxation or to reduce tax burden in their home country by engaging in tax evasions or migrating intangibles to lower tax jurisdictions.
With Barbados expected to have legislation in place by December, BIBA and Government had established a task force back in February this year, to work closely with legal, tax and insurance professionals and other key stakeholders in order to examine the issues relating to ring fencing and how to make Barbados fully compliant without hurting the jurisdiction.
She was speaking with journalists on the sidelines of the BIBA cocktail reception at the Apes Hill Polo Club on Monday night to officially open the association’s 10th international business week of events, Hope said she was confident Barbados would meet its deadlines.
“We have worked very hard from the BIBA standpoint, but we have the legal professionals that have actually identified every piece of legislation and every change within every piece of legislation that needs to happen. Now, what we need to do is combine that into the proper legal format and have the legislation redrafted,” she said.
Earlier, Hope had told the gathering that the sector continued to face a number of challenges, chief among them, the OECD’s BEPS initiative, adding that each time the country sought to take two steps forward “we seem to take a couple of steps backwards or sideways”.
“In 2018, I think the industry has been slightly stymied due to the fact that we are waiting for the developments from the BEPS programme. So we still have a lot of companies continuing to do their business, but in terms of new opportunities people are waiting to see what comes out of the new legislation towards the end of the year,” said Hope.
She gave the assurance that in the meantime sector officials continued to examine new markets and opportunities for attracting diversified product offerings.
“We are looking at different opportunities so the other area I speak about quite often is the area for fintech (financial technology) and opportunities in blockchain, and we do have a number of very good companies here already in that field, but we have got to work on a regulatory sandbox,” she said.
Just last week local government officials, including Minister of International Business Ronald Toppin, were in Paris making a case for Barbados and putting forward suggestions for the solution to the BEPS initiatives.
Toppin is expected to provide an update on those discussions later this week.