Guidance

Overseas business risk: Barbados

Updated 11 February 2021

1. General overview

Barbados is the Eastern most island in the Caribbean, located just three hours south of Miami by plane and sitting just North of South America. The island is ranked among the safest and least corrupt in the entire Caribbean with strong connectivity to major cities throughout Europe and the US.

Barbados enjoys strong commercial and historical links to the UK. The island is the second highest recipient of UK tourists in the CARICOM region welcoming just over 218,000 visitors in 2019. Similarly over £4.2 billion in UK Foreign Direct Investment (FDI) was registered on island in 2018 and UK suppliers export hundreds of millions of dollars in goods and services to Barbados each year.

Over 2000 international companies have located in the country, taking advantage of the favorable investment climate, educated workforce and year-round warm weather. Several regional and international organizations’ are located in Barbados or utilize it as a hub for the Eastern Caribbean countries including the United Nations, IMF Caribbean branch and more. The Organization for Economic Co-operation and Development (OECD) views Barbados as a mature, increasingly sophisticated and well regulated international financial services center.

Opportunities for UK business in Barbados are in the following sectors: aid-funded business, infrastructure, clean growth, education and infrastructure/tourism.

1.1 Benefits for UK businesses exporting to Barbados include

• English language

• UK-CARIFORUM Economic Partnership Agreement

• UK-Barbados Bilateral Investment Treaty and Double Taxation Agreement

• similar legal and political systems to the UK

• open, market-based economy with similar business practices

• British-made/sourced products, companies and institutions valued for quality and reliability

• varied business opportunities with private and public sectors and international agencies

1.2 Strengths of the Barbadian market include

• political stability, with a long tradition of democracy

• skilled and literate workforce, 100% literacy

• easily accessible from UK with direct flights to a selection of UK cities

• well-established property rights maintained through legislation and rule of law mechanisms

• proximity to United States, Central American and South American markets

• developed International Business sector facilitating registry of foreign businesses and well-established offshore sector support services

• the hub for several regional agencies and international aid agencies are located in Barbados including the United Nations, Inter-American Institute for Cooperation on Agriculture, Inter-American Development Bank, Organisation of American States, Caribbean Development Bank and the Regional Security System

• low crime, low corruption, and relatively safe place to operate from

1.3 Challenges to doing business in Barbados include

• high levels of government bureaucracy can delay the conclusion of business activities with the public sector

• the correspondent banking issue threatens to cut local banks off from US banking institutions that act as intermediaries for the transfer of money from the Caribbean to International markets like the UK

• limited digitization among many regulatory authorities which can delay the speed in which transactions are completed

• declining Ease of Doing Business ranking

• small population of 280,000, which can limit prospects for certain opportunities, so UK exporters are encouraged to utilise Barbados as a hub to the Eastern Caribbean markets

• expensive and unreliable air transportation links between neighbouring countries can hinder regional interaction and trade

2. Politics

Political risk is low on the island. Barbados is an independent state within the Commonwealth, with over 300 years of parliamentary democracy. Features include:

• a bicameral Parliament similar to that of the UK

• general elections held every 5 years and have been free of violence

• two main established political parties – the Barbados Labour Party (BLP), the Democratic Labour Party (DLP)

• the BLP had an overwhelming victory at the General Election in May 2018, winning all 30 seats. The DLP has no place in the current Opposition line-up

• Prime Minister Mia Mottley leads a Cabinet of 26 Ministers. The Opposition Leader is Bishop Joseph Atherley, who left the BLP after the election and established the People’s Party for Democracy and Development (PdP)

• next general election due by May 2023

3. Economics

Barbados boasts a small, relatively open (primarily services) economy that is one of the most prosperous and highly developed economies in the Eastern Caribbean. Features include:

• well educated workforce (professionals, skilled artisans, available labour) with an overall population of 287,000

• telecommunications infrastructure that is among the best in the region and competitive globally. Barbados ranked 34th in the ICT Development Index in 2017 by the International Telecommunications Union

• tourism is the lead foreign exchange earning sector, followed by international business and financial services

• classified as a High-Income Country with a GDP per Capita of $18,145 in 2019. The economy grew at an average of 1 percent per year from 2015-2019. The International Monetary Fund estimates that Barbados suffered a contraction of 11.6 percent in 2020 due to the impact of COVID-19 on the economy

• in 2018, the Barbados government entered into an agreement with the IMF to secure macroeconomic stability for the country. Since the initiation of the agreement, both the Barbados government and IMF representatives have observed that the measures implemented have had a strong positive impact on efforts to consolidate the fiscal position

• recent legislation surrounding the IMF programme instituted by the Barbados government in 2018 includes amendments to public finance management, international business and the regulatory and fiscal framework for international and local businesses

• despite challenges the Barbadian economy remains open to trade. Total imports from the UK up to Q2 2020 were valued at £248 million, with approximately £43million in goods and £205 million in services imported. The total outward stock of foreign direct investment from the UK in Barbados was valued at £4.2 billion in 2018

• rhe UK has a long trading relationship with Barbados which is an important, friendly and reliable market for UK exporters, with main UK exports to Barbados including vehicles, industrial machinery, dairy produce and pharmaceutical products

• enhanced market access is available for Barbados regionally through trade agreements between CARICOM countries and internationally through e.g. the newly signed Economic Partnership Agreement (EPA) between CARIFORUM and the UK, the EPA with EU members and a range of double taxation agreements.

• there is an investment protection treaty and double taxation agreement with the UK.

4. Business and human rights

The government of Barbados has ratified several International Labour Organisation (ILO) conventions on labour rights including those relating to ‘freedom of association and the right to organise’, ‘social security’, ‘forced labour’ and ‘child labour’. Other human rights features include:

• ILO conventions (where applicable) form the basis for labour legislation on the island, which includes the Employment Rights Act 2012. The 2017 Employment (Prevention of Discrimination) Act prohibits discrimination on grounds of race, sex, gender or sexual orientation

• there is an active trade union movement which plays a robust role in the Social Partnership (government, workers representatives and private sector representatives)

• Barbados has no gender policy. There is a Sexual Offences Act (1992), Sexual Offences (Amendment) Act, 2016 and Domestic Violence Act (1992) and Domestic Violence (Protection Orders) (Amendment) Act, 2016.

• four topical human rights issues in Barbados are:

• the death penalty (still on the statute books, but no one has been executed since 1984).

• the continued use of corporal punishment in schools

• the level of domestic violence across Barbadian society

• rights and freedom of association for the LGBT community

5. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial operation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

Legislation to promote Integrity in public life is in progress through the parliamentary system, which will require public servants and others to declare their financial affairs. Barbados has not ratified the Convention against Corruption

In 2020 Barbados ranked 29th in Transparency International’s Corruption Perception Index (CPI) and had the same ranking for the previous two years. Anti-Money Laundering legislation is in place.

6. Terrorism and security

Read the terrorism information provided on our FCDO Travel Advice page.

7. Protective security

Read the security information provided on our FCDO Travel Advice page.

8. Commercial disputes

Businesses in Barbados may be operated as a limited liability company, partnership, joint venture or sole trader. Should UK firms’ encounter commercial difficulties in Barbados there are provisions in the UK-Barbados Promotion and Protection of Investment Treaty which can offer some support.

Specifically, Article 8 of the treaty states that commercial disputes between UK and Barbadian entities are to be deferred to the International Centre for the Settlement of Investment Disputes for the ‘settlement by conciliation or arbitration of investment disputes between states and nationals of other states’. In addition, UK businesses can also utilize the Caribbean Court of Justice as fora for commercial disputes at the highest appellate level.

UK firms are advised not to conduct work outside of the agreed scope of works in negotiated contracts without a formal and written obligation from the contracting firm. History has shown that informal commitments made by individual representatives of organisations/government agencies are sometimes not honored when there is no formal contract for additional services or goods provided.

UK business owners should seek legal advice as the tax and legal obligations of each sector or businesses structure may differ. Note there is a UK-Barbados double taxation agreement. The legal process in Barbados, for example the settling of commercial disputes, can be lengthy and costly.

9. Intellectual property

Infringement of copyright and intellectual property is low in Barbados. CAIPO is responsible for the administration of these intangibles in Barbados. Modern legislation and conventions are adhered to by CAIPO, e.g. The Copyright Act 1998-4; the Convention establishing the World Intellectual property Organisation.

Read the information provided on our intellectual property page.

10. Department for Business and Trade (DBT)

Sherry-Ann Blackett, Senior Trade & Investment Officer

Department for Business and Trade Barbados
British High Commission
Lower Collymore Rock
St Michael BB11000
Barbados

Tel: 1 246 430 7800; E-mail: Sherry-Ann Blackett

11. Useful links

The Department for Business and Trade (DBT) publishes monthly Export Opportunities across all sectors. Visit the Export Opportunities website.

If you are travelling to Barbados for business, check the Foreign, Commonwealth and Development Office’s (FCDO) travel advice for Barbados.

12. Contact

Contact the DBT team in Barbados for further information.