BARBADOS INSURANCE COMPANIES - PwC · PDF file2 pwc BARBADOS INSURANCE COMPANIES Introduction...

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BARBADOS INSURANCE COMPANIESA Guide to business executives and advisors to the Insurance Industry

PricewaterhouseCoopers (www.pwc.com) is the largest professional service firm in theworld. We provide industry-focused assurance, tax, advisory and corporate services forprivate and public clients, helping them to build value, manage risk and improveperformance.

Across the Caribbean, the PricewaterhouseCoopers network provides a fully integratedrange of professional services to local, regional and international clients from officeslocated in Antigua, Aruba, the Bahamas, Barbados, the British Virgin Islands, theCayman Islands, Curacao, Grenada, Jamaica, The Dominican Republic, Puerto Rico, St. Lucia, St. Maarten, Trinidad & Tobago, the Turks & Caicos Islands and the US Virgin Islands.

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Table of Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

PricewaterhouseCoopers in Barbados . . . . . . . . . . . . . . . . . . . . . . . . .3

Why Barbados? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Establishing an Exempt Insurance Company . . . . . . . . . . . . . . . . . . . .6

Start-up and ongoing operational costs . . . . . . . . . . . . . . . . . . . . . . . .8

The Island of Barbados – Ideal Environment for International Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

n Integrity and Professionalism . . . . . . . . . . . . . . . . . . . . . . .11

n Geography, Climate and Population . . . . . . . . . . . . . . . . . .12

n History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

n Politics, Government and Judiciary . . . . . . . . . . . . . . . . . .15

n Economy, Trade and Industries . . . . . . . . . . . . . . . . . . . . . .16

n Money, Banking and Finance . . . . . . . . . . . . . . . . . . . . . . .18

n Transport and Communication . . . . . . . . . . . . . . . . . . . . . .19

n Infrastructure and Social Environment . . . . . . . . . . . . . . . .20

Appendices

I. Qualifying Insurance Companies . . . . . . . . . . . . . . . . . . . . . . . . . .24

II. Key Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

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Introduction

Barbados is the premier international business centre inthe Eastern Caribbean. As such, it is also one of theworld’s leading domiciles for captive insurance companies.

This guide has been prepared by PricewaterhouseCoopers EastCaribbean. It provides background information to help businessexecutives evaluate the advantages of establishing an insurancecompany in Barbados.

Executives who are already planning to establish an insurancecompany here, or who wish more detailed information on the processor about specific issues, are urged to contact one of the followingpartners with responsibilities for international insurance: Wayne Fields,Michael Bynoe, Marcus Hatch or Ashley Clarke.

Contact information:

PricewaterhouseCoopersThe Financial Services CentreBishop’s Court HillP.O. Box 111St. MichaelBarbados, W.I.

E-mail: first name.last [email protected]

Tel: (246) 436-7000 Fax: (246) 436-1275


PricewaterhouseCoopers in Barbados and the East Caribbean

Through its legacy firms, PricewaterhouseCoopers has roots inBarbados that go back to the 1860s. Officially known asPricewaterhouseCoopers East Caribbean, the partnership isheadquartered in Barbados with practices in Antigua, St. Lucia and Grenada.

Through its Corporate Services Division, which is managed by Abacus ManagementServices Ltd., the firm provides a complete range of services to foreign investors seekingto establish an Exempt Insurance Company or Qualifying Insurance Company inBarbados.

These include:

n Arranging incorporations, registration of external companies and companyliquidations.

n Preparing the application for the exempt insurance licence or registration ofthe insurance company; attending discussions with the Supervisor ofInsurance for the granting of the licence or registration certificate.

n Providing a registered office and a company secretary, and nominating localdirectors.

n Maintaining statutory records, acting as a company registrar and dividendpayment agent; filing statutory returns and generally keeping the company ingood standing.

Over the past 30 years, successive governments have painstakingly built ahighly attractive environment for foreign investment and internationalbusiness. In addition to offering attractive tax concessions and incentives,the island has established a network of tax treaties with several countriesincluding the USA, Canada, the UK, Switzerland and China.

Indeed, Barbados has continually enacted – and refined – legislation thatmakes the country a highly respected domicile not only for InsuranceCompanies but also for:

n International Business Companies

n International Banks

n International Societies with Restricted Liability

n International Trusts

n Mutual Funds

Barbados has excellent international telecommunications links and iseasily accessible by frequent scheduled flights from the United States,Canada, Britain and Europe. In addition, the island is home to a well-educated and skilled population and enjoys a well-developedinfrastructure and a sophisticated level of services.

Underlying legislation for international insurancecompanies

An international insurance company can be licensed in Barbados underthe Exempt Insurance Act, Cap. 308A or, alternatively, registered underthe Insurance Act, Cap. 310 which also governs local insurancecompanies. International companies that choose to register under theInsurance Act, are known as Qualifying Insurance Companies and will facesome tax liability in Barbados (see Appendix I).

Regardless of which alternative they choose, companies must first obtainthe approval of the Minister of Finance before incorporating under theCompanies Act, Cap. 308 (see Appendix II).


Why Barbados?

Already renowned as one of the premier holiday destinations inthe Caribbean, and recognized by the United Nations as amongthe top developing nations in the world, Barbados also enjoys awell deserved reputation for integrity as an international businesscentre. The island is now one of the world’s leading domicilesfor captive insurance companies.

Most international insurance companies on the island have chosen to belicensed under the Exempt Insurance Act. Currently, there areapproximately 413 licensed exempt insurance companies conductingbusiness from Barbados.

Key Tax Incentives

Here are some of the key tax incentives offered by the Exempt InsuranceAct:

n Exemption from tax on income and all withholding taxes.

n Exemption from all corporate taxes on capital gains or any tax on thetransfer of assets or securities to any person.

n Personal tax concessions for specially qualified employees.

n For US corporations, convention expenses are deductible against taxesin the US.

n Benefits and exemptions guaranteed for a period of 30 years.

Other incentivesn No requirements to file tax returns or to publish financial information.

n Exemption from exchange control regulations.

n No necessity for “physical” meetings in Barbados.

n Reasonable solvency requirements.

n Modern and flexible corporate law.

n Provisions for inward and outward re-domiciliation.

n Annual licence fee of only US$2,500.

n External companies may register as a branch in Barbados.

n Some tax treaties apply.

n Minimum capitalisation of US$125,000.

n Availability of a wide range of professional services.

n Competitive start-up and ongoing operational costs.

n Speed of incorporation and licensing.


Principal internationaltax planningconsiderations

n Canada – Canadian investors ina Barbados internationalinsurance company enjoy uniquetax advantages created by theexistence of a tax treaty betweenCanada and Barbados. Providedthat the Barbados insuranceaffiliate carries on an activebusiness and is liable to tax inBarbados, it can benefit frombeing able to pay dividends to itsCanadian shareholder so that theyare not taxable in Canada.Sources of such dividends includethird-party insurance businesscarried on by an affiliate thatemploys more than five full-timeemployees in such business, andrelated insurance business wherepremiums received are deductiblefrom some other group company’sincome derived from anothercountry with which Canada has atax treaty.

n United States – With properplanning and subject to variousprovisions of the U.S. InternalRevenue Code, a U.S. basedcorporation can derive substantiveeconomic benefits by insuring itsemployees and foreign operationsusing Barbados. With properstructuring, substantive benefitscan also be derived throughinsuring/reinsuring the U.S.operations.

Exempt insurance is defined as a business whose risksand premiums originate outside Barbados, and which isowned by persons resident outside of the CARICOMSingle Market and Economy*.

Any person or business seeking to incorporate or register as an externalcompany to engage in exempt insurance must first obtain permission fromthe Minister of Finance.

The next step is to obtain a license from the Supervisor of Insurance. To do this, a company or branch must submit to the Supervisor ofInsurance a completed application supported by relevant documents.These include:

n Objectives of the company or branch, which must be restricted toexempt insurance.

n The proposed source of business, together with the names andaddresses of affiliates.

n The proposed reinsurance programme, if any.

n Estimates of the gross and net premium income for the first year.

n The proposed capitalisation of the company (US$125,000 is theminimum required, and additional capital may be required to meetsolvency margins).


Establishing an Exempt Insurance Company

* The CARICOM Single Market and Economyincludes the following countries: Antigua & BarbudaBarbadosBelizeDominicaGrenadaGuyanaJamaica

MontserratSt. Kitts & NevisSt. LuciaSurinameSt. Vincent & The GrenadinesTrinidad & Tobago


n The proposed fiscal year-end of the company or branch.

n The name and address of any guarantor, and the amount of anyguarantee, if applicable.

n Copies of reinsurance cover notes and contracts.

n The full name, nationality, home address, country and date of birth,business experience and directorships held, of those persons to beappointed directors. (There may be any number of directors, but atleast one must be a resident citizen of Barbados.)

n The name of the exempt management company or branch, unless thelicensed company will be self-managed.

n The name and address of an individual resident in Barbados on whomthe Supervisor of Insurance may serve notices. (This may be theBarbadian director, the local management company, or any otherperson.)

n The name and address of the actuary, if any, to be retained by thecompany.

8

Start-up and ongoing operational costs

Estimated start-up costs for an International Insurance Company(in US dollars):

Government FeesIncorporation $ 390Application for licence/certificate of Qualification 250Licence/certificate of qualification (calendar year) 2,500

Professional Fees (minimum)Incorporation (inclusive of legal fees) 3,000Application for licence/ certificate of Qualification 1,500Corporate retainer (first year) 1,500

Auditors’ certification on initial capital 2,500Disbursements (estimate) 410

$ 12,050

Estimated recurring costs are as follows (in US dollars):Government licence fee (calendar year) 2,500Retainer fee 1,500

$ 4,000 Local director (minimum fee) $ 2,000

Note: Unless the exempt insurance company will have in-house management, it will have to appoint an exempt insurance management company.Management company fees will vary significantly based on the type ofbusiness and the level of activity involved, ranging from US$15,000 toUS$50,000.

The exempt insurance company must also file audited financial statementswith the Supervisor of Insurance within six months of the year-end. Feesfor such auditing services may range from US$5,000 to US$15,000.

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The Island of BarbadosAn ideal environment for international business

Barbados has tax treaties with the following countries:

NOTE: To review the entire Exempt Insurance Act and other lawspertaining to international business, please visit the website of the Ministryof Industry and International Business at: www.barbadosbusiness.gov.bb


Integrity and Professionalism

For the past 30 years, successive governments in Barbados havediligently constructed a framework of legislation designed toencourage foreign investment and establish the island as a leadinginternational business centre in the Caribbean.

Today, Barbados is a highly respecteddomicile for such entities asInternational Insurance Companies,International Business Companies,International Banks, Societies WithRestricted Liability, InternationalTrusts, and Mutual Funds.

Throughout the process of enactingand refining the laws governinginternational business, the countryhas rigorously safeguarded itsreputation for integrity, respondingquickly to such international concernsas money laundering and lack oftransparency.

Indeed, while offering a low-taxenvironment to internationalbusinesses, Barbados has, from thevery beginning, chosen to establish a high level of transparency and acooperative approach to sharinginformation sharing with taxauthorities in other countries.

Professional Services

The island provides an excellent rangeof professional services – and highlyskilled professionals – to meet the needsof the international business sector. The legal profession is well establishedin Barbados, with many law firms thatspecialise in corporate and internationalbusiness law.

All of the major international accountingfirms are represented through localpartnerships, offering assurance, tax,advisory and corporate services. Thereare several independent managementcompanies on the island that alreadyhandle the business of scores ofInternational Insurance Companies.

n The United Statesn Canadan The United Kingdomn Chinan Cuban Finlandn Norway

n Swedenn Switzerlandn Venezuelan The territories that

comprise the CARICOM Single Market andEconomy


Geography

Barbados is the most easterly ofthe Caribbean Islands. Essentially a “coral” island, with an area of 166 square miles, it is situatedapproximately 1600 milessoutheast of Miami, Florida. The island is easily accessible byfrequent scheduled flights fromMiami (3.5 hours), New York City(4.5 hours), Toronto (5.5 hours),and London or Brussels (8 hours).

Climate

Barbados has a tropical climateand relatively high averagetemperatures and humidity.However, these conditions aremoderated by the cooling effect of strong North East trade windsthat blow over the island.

Temperatures during the day rarely exceed 30C (86F). During November though March,conditions tend to be a fewdegrees cooler, while the months of July through October aregenerally more humid and wet.

Population

The resident population of theisland is approximately 270,000.Approximately 94% of Barbadiansare of African descent, with theremainder being of Europeandescent and other nationalities.

When segmented by age, 24% of the population is under 15, with 64% between the ages of 15 and 64. The remaining 12% are over 65.

Geography, Climate and Population

Top: the island’s East Coast is noted for its rugged beauty and Atlantic swells.Bottom: The West Coast is famous for its crystal-clear waters, fine sandbeaches and luxury accommodation.


Barbados is the most easterly of the Caribbean islands, situated about 1600 miles southeast of Miami, Florida.


The Europeans knew about theexistence of Barbados since the16th century. However, the islandwas not settled until 1627 when agroup of Englishmen established aformal colony and planted tobaccoand cotton for export to England.After 1645, these crops werereplaced by sugar cane, whichfostered the development of theplantation system.

From early on, Barbados enjoyedtrading relationships and other ties with the United States and later Canada. In 1670, Barbadianimmigrants helped to found theState of South Carolina and itscapital city of Charleston. What ismore, Barbados bears thedistinction of being the only countryoutside of the United States evervisited by George Washington whocame to the island in 1752.

Since the abolition of slavery in1834, the descendants of African slaves who were brought to Barbados to underpin theplantation system have developedinto a thriving and industriouspopulation.

In 1966, after almost 350 years ofunbroken British colonial status,Barbados became a fullyindependent sovereign nation. The island is English-speaking andhas remained a member of theBritish Commonwealth.

History

Archaeological evidence shows that the Arawaks, apeople indigenous to the Orinoco River area of Venezuela,inhabited Barbados from around 600BC. They were laterdriven out by the Caribs, who also migrated north from thesame area but who did not settle on the island.

Carved by aBritish armyofficer stationedon the island, thisstone lion is areminder ofBarbados’colonial past.

The Corp ofDrums of theBarbadosDefence Forcewear uniformsthat date back toVictorian times.


Politics

An independent country sinceNovember 30, 1966, Barbados isnoted for its high level of political,economic and social stability, aswell as for the integrity of itsinstitutions. The country operatesas a well developed democracywith open elections held every fiveyears. There are two main politicalparties, the Barbados Labour Partyand the Democratic Labour Party.Elections are hotly contested, butare notably free of violence andcorruption.

Government

Barbados enjoys a parliamentarystyle government, with a House ofRepresentatives and a Senate. The island’s first Parliament wasestablished in 1639, making it thesecond oldest in the WesternHemisphere.

The function and powers of theGovernment are vested in Cabinet,presided over by the PrimeMinister. Senators are appointed:12 by the Government, two by theofficial Opposition, and seven“independents” on therecommendation of the GovernorGeneral who is the Queen’srepresentative and Head of State.

Judiciary

The legal system of Barbados isbased on English Common Law asmodified by Statute to meet localrequirements. The members of thejudiciary, in performing their judicialacts, are completely independentof the executive and legislativefunctions of Government.

Politics, Government and Judiciary

Top: The Parliament Buildings in Bridgetown – home to the second oldestparliament in the Western Hemisphere.

Bottom: Mounted police in full ceremonial uniform.


In 2003, the country’s GrossDomestic Product (excluding netindirect taxes) was approximatelyBDS$4.4 billion. That same year,exports amounted to BDS$500million, while imports totalledBDS$2.39 billion. Domestic exportsconsist mainly of sugar and its by-products rum and molasses,chemicals, clothing, furniture,electrical components and cement.

Consumer goods, mostly food andbeverages, account for the majorityof the island’s imports – BDS$915million in 2003. That same year,intermediate goods and capitalgoods such as machinery for use inagriculture and manufacturing,accounted for BDS$2.26 billion ofthe island’s import bill.

Based primarily on sugar until the1970s, the island’s economy nowhas four key productive industries:tourism, agriculture, manufacturingand international business.

Tourism

Tourism continues to play a key rolein the economy and has a positive“spin-off” impact on virtually all otherbusiness sectors. Currently, thisindustry accounts for about 11% ofthe employed labour force and is thecountry’s principal foreign exchangeearner. For example, in 2003, thegross annual earnings from tourismwere approximately BDS$1.46billion. The island attractsapproximately one million visitorseach year, with an almost equal split between long stay visitors andcruise ship passengers.

Economy, Trade and Industries

Barbados embodies an open, small, free enterpriseeconomy. A Value Added Tax on consumption,implemented in 1997, has enabled the country to reduceits dependence on import tariffs and duties as a source ofrevenue, and also to improve compliance with WTO rules.

Top: St. Lawrence Gap, on the vibrant South Coast – heart of the island’snightlife.

Bottom: This modern distillery produces fine rums for which Barbados isfamous.


intensive products that use moderntechnology. Electronics, medicalequipment and informationprocessing are areas of particularinterest. In recent years, the islandhas been attracting a growingnumber of call centres.

Agriculture

While the production of sugar is stillimportant to the island’s ability toearn foreign exchange, theGovernment’s policy in agriculturehas been to reduce dependence

Manufacturing

The manufacturing sector inBarbados accounts forapproximately 7% of the island’semployed labour force and includesfood and beverages (especiallysugar and rum), electronics,hardwood furniture, garments andchemicals.

The country continues to welcomeinvestment in the manufacturingsector, especially for the productionof higher value-added, skills-

Barbados Gross Domestic Product (2003)

on this commodity and toencourage diversification, especiallyin vegetables, poultry, livestock and fishing. The island is virtuallyself-sufficient in pork, poultry, freshmilk and vegetables.

International BusinessThis sector, which has steadilydeveloped since 1977, nowcontributes significantly to theisland’s foreign exchange earningsand provides employment forapproximately 3,000 Barbadians.Some unofficial estimates put thesector’s contribution to thecountry’s GDP at about 7.5%.

Primary Resources

Other than substantial limestonedeposits that are mined and usedto produce cement and other lime-based products, Barbados doesnot have an abundance of naturalresources. However, the countrydoes have some oil and natural gasdeposits that have been accessedto reduce dependence on outsidesources. In 2003, approximately22.4 million cubic metres of naturalgas were sold, and 371,000 barrelsof crude oil produced. Local crudeoil production meets about half thedomestic requirements.

Local crude oil production meets about half the islands domestic requirements.


Exchange control

Barbados has exchange controlregulations, although these are beingloosened over time. However,international businesses, includingExempt Insurance and QualifyingInsurance Companies, are exemptfrom these exchange regulations.

The Central Bank ofBarbados

Barbados has had a Central Banksince 1973. The main role of theCentral Bank is to act as banker,fiscal agent and financial advisor tothe Government, and to monitorand regulate the activities ofcommercial banks and otherfinancial institutions. It also has aduty to promote monetary policiesand exchange policies thatencourage economic growth.

Commercial Banks andFinance Companies

The banking system in Barbados iswell established, and the island hasa competitive commercial bankingsector. The commercial bankscurrently operating here include:First Caribbean International Bank(a regional combination of BarclaysBank and CIBC Caribbean), RoyalBank of Canada, Bank of NovaScotia, Barbados National Bank(majority owned by Republic Bankof Trinidad), Bank of Butterfield &Sons, and Caribbean CommercialBank (wholly owned by Royal Bankof Trinidad & Tobago).

Money, Banking and Finance

Barbados has been a member of the InternationalMonetary Fund since 1973. The Barbados dollar isbacked by gold and foreign assets, which havepromoted stability and confidence in the currency.Since 1975 the country’s dollar has been fixed atBDS$2.00 to US$1.00.

There are also several financecompanies operating in Barbados.Apart from collecting deposits,these companies complement thecommercial banks in financing thepurchase of constructionequipment, motor vehicles andother consumer durable goods.

Domestic Insurance

Barbados has a highly developeddomestic insurance industry.Placement of insurance throughbrokers is commonplace.

Top: The Tom Adams Financial Centre, named after the island’s second primeminister, is home to the Central Bank of Barbados.

Bottom: This elegant building is the head office of FirstCaribbean InternationalBank.


Airport

Voted the “Best Caribbean Airport”at the World Travel Awards for 2003,the Grantley Adams InternationalAirport is located in the south of theisland, about 30 minutes from thecapital of Bridgetown. The airport isserviced by major internationalairlines, including American Airlines,American Eagle, Continental, USAirways, Air Canada, Air Jamaica,British Airways, BWIA and VirginAtlantic. These airlines providedirect links to major cities such asMiami, New York, Newark,Philadelphia, San Juan, Washington,Toronto and London. The GAIA is amajor “hub” for several regionalairlines that connect the EasternCaribbean with frequent flights daily.

Port facilities

Located on the edge of the City, theBridgetown Port is one of the mostmodern in the Caribbean. The portprovides container handling andberthing facilities for ocean-goingfreighters and passenger shipsincluding the world’s major luxuryliners, several of which now use theBridgetown Port as their “homeport”for Caribbean cruising in the SouthCaribbean.

Postal, Courier andTelecommunicationServices

The Post Office Department providesspeedy and reliable domestic andinternational mail services on a dailybasis to all parts of the island. Thereare 17 post offices that are openfrom 8:00 a.m. until 3:00 p.m.,Monday through Friday. Expresspost is available to certain countriesthrough the Post Office Department,and there are a number of privatecouriers including Federal Express,DHL and UPS.

Barbados has excellenttelecommunications links, withdirect-dial available to all worlddestinations. Businesses areoffered the latest in communicationstechnology, and many use theInternet to provide information ontheir products and services.Currently, there are threetelecommunications companies onthe island providing cellular phonesservices: including Cable & Wireless,Digicel, and AT&T Wireless.

Transport and Communication

News Media

There are two English languagenewspapers, a television stationand several radio stations thatprovide local, regional andinternational news. Internationaleditions of major foreignnewspapers (from North Americaand the UK) are also available on adaily basis. Also, two satellite linkedcable television services providesubscribers with access to a widerange of international programming.

Top: Barbados enjoys excellent telecommunications links with the rest of theworld.

Bottom: The island is also served by a modern deep water port.


Infrastructure and Social Environment

Barbados is one of the most highly developed small countries in the world. The United Nations Development Programme (UNDP) has ranked Barbados as No.1on its Human Development Index in the Caribbean and Latin America. In itsdevelopment, Barbados is also outperforming all of Africa, and all of Asia with theexception of Hong Kong, Singapore, Japan and South Korea.

The country’s high level ofdevelopment is reflected in itsinfrastructure and socialenvironment.

Health Services

The Queen Elizabeth Hospital,situated on the outskirts ofBridgetown, accommodates 600patients in private and generalwards. There is also the BayviewHospital, which is privately ownedand accommodates 24 patients.There are also several well-equipped private clinics, healthcentres and nursing homes. The psychiatric hospital enjoys agood reputation.

Barbados enjoys a high standard ofmedicine and health services overall.Dental and optical services are readilyavailable, and the Medical Registerlists specialists trained in the UnitedKingdom, Canada and the UnitedStates.

Education

Barbados has an exceptionallygood educational system thatcomprises free primary, secondaryand tertiary levels of education.The literacy rate on the island isapproximately 97%.

One of the campuses of theUniversity of the West Indies issituated in Barbados. Theuniversity’s Department ofManagement Studies together with the affiliated Centre for

Top: The Sherbourne Conference Centre – one of the most modern facilitiesof its kind in the Eastern Caribbean.

Bottom: Student residences on the Cave Hill campus of the University of theWest Indies.


Management Development providemany of the graduates for thecountry’s domestic corporatesector, professional services firms,and international business sector.

Barbados also has a communitycollege, a teachers’ training college,a theological college, a hospitalityinstitute and a polytechnic.

Housing

Barbados has well developedresidential areas, and high qualityhousing for executives is availablefor sale or rent in many locationsacross the island.

Water

Barbados enjoys crystal cleardrinking water throughout theisland. Its primary source isunderground springs, filteredthrough coral, and these aresupplemented by the output from a newly completed desalinationplant.

Electricity

The Barbados Light & PowerCompany provided a highly reliableelectricity service throughout theisland. Domestic current willoperate appliances designed for110 volts AC, 50-cycle supply. A 220-volt supply is also availableto industrial and domestic users.

Roads

Barbados is criss-crossed by anextensive network of paved roads, including a trans-islandhighway that links all of the maintransportation arteries. Driving ison the left-hand side of the road.

Office Space

Good quality, air-conditioned officespace is available in Bridgetown orin several purpose-built officecomplexes on the outskirts of thecity. Lease arrangements can benegotiated at reasonable rates.

Top: High quality executive housing is available for sale or rent in many partsof the island.

Bottom: Good quality, modern office space is available in several purpose-built complexes on the outskirts of the city.


Hotel Accommodation

In keeping with its reputation as ahigh-end tourism destination,Barbados has well-run hotels ofinternational standards. Theseinclude a newly reconstructedHilton, The Fairmont Hotels’ RoyalPavilion, and Sandy Lane Resort,recognized as one of the finestfacilities of its kind in the world.Other smaller but excellent qualityhotels include Coral Reef, ColonyClub, Glitter Bay Resort, CobblersCove and The Crane PrivateResidence Resort. In all,accommodation in Barbados,including luxury hotels, villas,guesthouses, and rental apartments,totals just over 8,000 rooms.

Many of the larger hotels offerconference facilities, as does the

Sherbourne Conference Centre, apurpose-built facility on the outskirtsof Bridgetown.

Restaurants and Nightclubs

Barbados has dozens ofrestaurants, many of which areworld-class in standard. In additionto these restaurants, there areseveral excellent private firms thatcater for receptions. The island hasan active nightlife, particularly onweekends, and there severalnightclubs offering live bands as wellthe latest in international music.

Sports and RecreationalActivities

Barbadians are a sports-lovingpeople, and while cricket remains

the national “passion, sports ofevery kind are played on the island,including basketball, volleyball, fieldhockey, soccer, tennis, squash andgolf. Horse racing and polo are alsowell established on the island andamong the leading spectator sports.A national stadium and agymnasium are used throughout theyear to host field athletics, cyclingand other well attended sportingevents.

Barbados has gained increasingprofile in recent years as a golfingdestination. There are five golfcourses on the island: two 18-holecourses at Sandy Lane, which havebeen recently designed by TomFazio; the luxurious 18-hole courseat Royal Westmoreland, designedby Robert Trent Jones; the 18-hole

Bottom: Horseracing is a well-established and popular sport on the island.


course at Southern Golf andCountry Club; and the 9-hole courseat Rockley Resort, which is theoldest course on the island.

The water and coral reefssurrounding Barbados are theisland’s greatest natural attraction.There are a number of traditionalwater sports activities includingsailing, surfing, deep-sea fishing,scuba diving and snorkelling.

Festivals

Barbados celebrates the nationalfestival of Crop Over during the

month of July. It is a festival ofmusic, art and dance, andexotically costumed Barbadianstake to the streets in thethousands during the final paradeknown as “Kadooment”.

In March, the Annual HoldersOpera Season offers the music andtheatre of local and internationalperformers, and attracts visitorsfrom around the world.

There are several world-class golfcourses on the island.

Polo has become increasinglypopular, and there are currently fourpolo fields on the island.


Appendix I Qualifying Insurance Companies

To become a Qualifying Insurance Company, a company or branch mustregister under the Insurance Act and apply for a certificate of qualification.

To complete this process, the company or branch must submit to theSupervisor of Insurance an application for registration containing the samebasic information as for an exempt insurance licence, supported by therelevant documents.

Where the Supervisor is satisfied that at least 90% of the company’s orbranch’s premiums do, or will, originate outside of CARICOM, and that atleast 90% of its risks insured are located outside of this same Region, acertificate of qualification will be issued.

Note: Since it is registered under the Insurance Act the same as a localinsurance company, a Qualifying Insurance Company is required to file a taxreturn and financial statements in the same manner as a local company.

Key Benefits

Here are some of the key benefits enjoyed by Qualifying InsuranceCompanies:

n A tax credit – based on the level of premiums originating outsideof CARICOM – that can reduce tax payable on general insurancebusiness to 2.8% of taxable income and on life insurancebusiness to 0.35% of gross investment income.

n Exemption from withholding taxes.

n Exemption from transfer tax on sale or transfer of any assets orsecurities.

n No requirement to publish financial information if no premiums orrisks originate within CARICOM.

n Exemption from exchange controls regulations.

n Reasonable solvency requirements (see Appendix III).

n Full access to Barbados’s network of tax treaties.

n Personal tax concessions for specially qualified employees.

n Provisions for both inward and outward re-domiciliation.

n Fixed annual government fee of US$2,500.

n Modern and flexible corporate law.

Note: While tax credits will be available if international insurance is carried on,the other tax benefits will not apply where the 90% threshold test is not met.


Appendix II Key Legal Requirements

Both Exempt and Qualifying Insurance Companies must incorporate under Barbados’Companies Act 1982, which is modelled on the Canada Business Corporations Act.Here are some of the key requirements:

Company formation and registration of branches

Incorporation is achieved by filing Articles of Incorporation and paying a fixed fee ofUS$390. A company may undertake any business, unless its Articles circumscribe itsactivities, or certain activities such as banking and insurance, which are restricted by law.

For example, in the case of a captive, activities are restricted to exempt insurance.

Tax returns

Qualifying Insurance Companies must file tax returns and financial statements same aslocal companies. Those with year-ends prior to September 30th must file by the followingMarch 15, all others by the following June 15th. Taxes must be prepaid.

Capital

A company need only have one shareholder. There is no stamp duty on capital. Shares haveno nominal or par value, but may not be issued until fully paid. A company may purchase andcancel its own shares provided it is solvent. Companies may amalgamate and mutualcompanies are allowed. The approval of the Ministry of Finance is required where more than10% of the company’s shares are to be transferred to another company other than a licensee,holding company, or management company licensed under this Act.

Management

A company need only have one director. However, a captive company must have at leastone director who is a resident citizen of Barbados. Directors’ duties and liabilities areexpressly stated in the Companies Act. A unanimous shareholders’ agreement mayrestrict the power of the directors. Minutes of all meetings and resolutions of directorsmust be maintained at the registered office in Barbados. Alternate directors are allowed.

Meetings and votes

Directors may conduct their business by unanimous written resolution, or meet bytelephone. An annual meeting of shareholders is required, at which shareholders may berepresented by proxies. Fundamental changes to the company’s Articles require two-thirds majority. Minutes and resolutions of the shareholders must be maintained at theregistered office in Barbados.


Appendix II (continued)

Winding up licensees

Winding up proceedings, either by voluntary intention or else by petition bythe Supervisor of Insurance or policyholders, have to be through an order ofthe court, and the Supervisor becomes a party to any winding upproceedings.

In certain circumstances a licensee may be placed under judicialmanagement. All actions and the execution of all writs, summonses andother processes are stayed once a petition for winding up is presented, andcan only be proceeded with by leave of the Court.

Accounting and auditing

Adequate accounting books and records must be maintained in Barbados,and a qualified local auditor must be appointed. Accounting and auditingstandards are prescribed by the Institute of Chartered Accountants ofBarbados. Audited financial statements must be filed with the Supervisor ofInsurance within six months of year-end.

Solvency Requirements

The solvency requirements for both Exempt and Qualifying InsuranceCompanies are the same.

For general insurance business, the value of assets must exceed liabilities byUS$125,000 during the first year, and also in subsequent years if annualpremium income does not exceed US$750,000.

Otherwise, after the first year, the solvency margin is 20% of annual premiumincome on the first US$5 million, and 10% thereafter. All calculations arebased on the net earned premium income of the preceding financial year.

For long-term insurance business, the value of assets must exceed liabilities.

© 2005 Copyright PricewaterhouseCoopers

"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, eachof which is a separate and independent legal entity.

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