The Companies Act 1982 is the main legislation governing companies in Barbados. It was modeled on the Canadian Business Corporation Act. Company forms available under the Act are limited liability companies, companies without share capital (for non-profit purposes) and mutual insurance companies. Most offshore operations in Barbados make use of the limited liability company form, and then take offshore status under one of the enabling pieces of legislation, including the International Business Companies Act 1991, the Foreign Sales Corporations Act 1984, and the various specialized financial company forms. The International Business Company is the most widely used vehicle for offshore operations in Barbados.
IBC status is given to companies that are carrying on the business of international manufacturing or international trade or commerce. Broadly speaking, these activities have to be carried out in Barbados, with exports or the provision of services being to countries outside the Caricom area or to other IBCs, exempt insurance companies or Foreign Sales Corporations (i.e. other offshore entities). The Act limits the issue of an IBC license to companies that fulfill the following criteria:
- a company should be resident in Barbados (resident means incorporated in or managed and controlled from Barbados; registered foreign – external – companies are deemed to be resident);
- no more than 10% of the assets of a company would accrue on a liquidation to holders of its shares and loan capital resident in the Caricom area;
- no more than 10% of the interest and dividend payments made by a company should go to individuals resident in the Caricom region.
Barbados companies’ names must end with one of the following words, or their relevant abbreviations – Limited, Corporation, Incorporated. The following names to be used, require licensing: Bank, Insurance, Assurance, Re-Insurance, Trust, Trustee, Savings, Royal, Asset management, Fund Management, Investment Fund, Building Society, Municipal, Chartered. Names denoting any connection to local, state or national Governments are generally prohibited.
MEMORANDUM AND ARTICLES OF ASSOCIATION
Companies in Barbados are formed under the Companies Act by submitting Articles of Incorporation, Notices of Directors and Registered Address and Request for Name to the Registrar of Companies. The Registrar issues a Certificate of Incorporation, and the company exists as from the date of the Certificate. Memorandum specifies the activities in which the company may engage and Articles of Association specify the rules governing the internal management of the company. In addition, application must be made to the Barbados Ministry of Finance for an international business company license. This application should be made as soon as possible after the incorporation of a company.
A minimum of one shareholder is required which may be an individual or a body corporate. The details of company beneficial owners and shareholders are not part of the public records.
There is no specific minimum capital requirement. The usual authorized share capital is US$ 50,000. The minimum issued capital may be one share of par value. Issued shares must be fully paid. Registered shares, bearer shares, preference shares, redeemable shares and shares with or without voting rights are permitted. A company may purchase its share back or reduce stated capital subject to solvency tests.
Barbados IBC requires a minimum of one director and corporate directors are permitted. Details of the directors do not appear on the public file. There is no requirement to have resident directors.
REGISTERED OFFICE AND SECRETARY
Barbados companies must maintain a registered office in Barbados. Copies of the Articles of Association, Memorandum of Association, and Certificate of Incorporation must be kept at the Registered Office. A copy of the Register of Directors must also be kept at the Registered Office of the IBC. The Register is not available to the public. There is no requirement to have a company secretary; however, it is advisable to have one for administration purposes. An individual or a body corporate of any nationality can be appointed as company secretary.
The directors and the shareholders meetings need not be held in Barbados; also there is no requirement for an Annual General Meeting. All meetings may be held outside Barbados by telephone or other electronic means. Alternatively, directors and shareholders may vote by proxy.
Usually it is up to 10 working days, but we need up to another 10 working days for legalization of the documents and delivery by courier.
RECURRING AND MAINTENANCE FEE AS FROM 2ND YEAR
- Annual administration, provision of registered office, registered address and agent
- Payment of annual government fees
- Payment of the Government License Fees, provision of registered office, registered agent and company Secretary must be renewed by December 31 irrespective of the date of incorporation.