Barbados

Barbados is the most easterly of the Caribbean islands. It has a population of a little more than 250,000 residents and is considered to be politically stable. The capital is Bridgetown, and the official language is English.

Barbados has no taxes on assets or capital gains, and no withholding taxes on dividends, interest, management fees or royalties, and a low tax on profits. There are no probate fees or estate or succession taxes.

Currency is fixed against the U.S. Dollar. An exemption from exchange controls may be obtained for Barbados companies which do not do business on the island. Confidentiality laws are well-established.

The Barbados Foreign Sales Corporation Act provides for a corporate entity which is exempt from all Barbados income and other taxes arising from its operations. A disadvantage is that if the corporation invests its profits, then those profits will be subject to taxes, but this does not apply to a corporation which simply brings capital into Barbados and invests it there.

Barbados has new laws relating to asset protection trusts. Like the nearby island of Nevis, Barbados is probably a good island to set up a trust, but have the trust own corporations domiciled and doing business elsewhere. Barbados is an out-of-the-way locale, not generally thought of as a tax haven, and not likely to draw much attention. It is an excellent location for the truly discreet investor.

TAX WARNING FOR U.S. CITIZENS

U.S. citizens are taxed on their taxable income from wherever it is derived, anywhere in the world. U.S. citizens are also taxed on investments indirectly made through foreign trusts and foreign corporations, including offshore trusts and IBCs. Thus, the fact that an offshore jurisdiction may have low or no taxes does not mean that if a U.S. citizen does business there that he or she will enjoy only low or no taxes on the personal income made. There are simply NO personal income tax advantages, at all, for U.S. citizens to use offshore structures, and anyone who tells you differently is probably telling you a falsehood. Any discussion we make of an offshore jurisdiction's tax laws should be construed only according to the foregoing warning.

BEWARE OF OFFSHORE SERVICE PROVIDERS: There are some offshore service providers who will make wild claims about saving you personal income taxes, so as to convince you to set up an offshore structure. Most of these people don't know the first thing about U.S. tax law, and their representations to you will not help you, at all, if you are caught with an unreported trust, corporation, or bank account. All they really want is your money, and even if you commit tax evasion they are not subject to U.S. law, and so couldn't care less. See Hiding Money Offshore