Potential to be financial sector
BARBADOS IS IN A “good position” to thrive as an international financial centre (IFC) despite various challenges, including a worrying initiative introduced by the Organisation for Economic Cooperation and Development (OECD).
Ben Arrindell, one of the island’s leading international business practitioners who has also advised Government on such issues or a number of years, said he was confident of this outcome because of the emphasis Barbados was placing on new markets. This was in addition to the fact that Barbados had a good reputation in the marketplace.
In an analysis published in the 2015 edition of Invest Barbados’ Barbados International Finance & Business, Arrindell said the OECD’s Base Erosion and Profit Shifting (BEPS) initiative was “perhaps the area that potentially will have the most [negative] impact from a Barbados point of view” given its proposed focus on treaty shopping and substance.
“However, Barbados has a tradition of attracting businesses of substance and, therefore, has the necessary infrastructure, including flexible immigration laws, to enable investors wishing to establish operations in Barbados to structure their businesses in a way that meets the substance test,” he said.
“With its emphasis on businesses of substance and focus on new markets, particularly in Latin America, Barbados is in a good position to continue to thrive as an IFC, despite the challenges.”
The former Barbados Private Sector Association chairman noted that in the last 15 years there were a number of initiatives “aimed at combating the use of international financial centres by taxpayers, particularly multinationals, resident in hightax countries”.
He said the issues within the BEPS, including concerns about tax abuses, were not new, but added that the project “represents a more concerted effort by the OECD to coordinate the actions of its member countries in combating BEPS”.
Arrindell said “it is expected that the continued international focus on IFCs will make it more difficult in the future for Barbados to obtain [double taxation agreements] with OECD countries”. (SC)
