Q: What is the current macroeconomic prospect for Barbados under the backdrop of a slow, frail global recovery from the worst crisis since the 1930s, whilst new debt crises in the US and Europe are alarming overhead?
A: Like other developed and developing countries the lingering effects of the global financial crisis continues to figure prominently in Barbados' economic profile. Although we are a part of the Caribbean Community Single Market, unlike some countries in the European Union we are not easy beneficiaries of a vast 'bail monies' and therefore have to rely on a creative mix of strategies designed to both stimulate and stablize private enterprise whilesafeguarding the most vulnerable in our society. This is a delicate but important balance because the social, political and economic stability that a small, sovereign state likes Barbados must maintain in order to advance the development objectives of those Barbadians and non-Barbadians who call our island nation home.
Q: How had Barbados' relatively small economy been affected during the 2008/2009 crisis?
A: Barbados continues to perform creditably as its major trading partners, most notably the United States, continue to crawl their way out of the recession.
Barbados' biggest challenge and its most entrenched commitment are to protect its world renowned reputation as a safe, competitive place to do business.
That said Barbados has not reverted to the International Monetary Fund for a 'rescue' programme though it has continued to work with the Fund to implement initiatives which continue to stablise the economy, encouraging growth over the last two quarters.
Q: Is the structure of the Barbadian economy diverse enough for Chinese companies to effectively participate in local economic activities?
A: Barbados' economy is diverse and supports a wide range of economic activities. Barbadian companies are involved in a wide range of activities supported by local, regional and foreign investment including banking, insurance, information services, construction, traditional and alternative energy, tourism, agriculture, research and development, pharmaceuticals, printing, fishing, agro-processing, film, music and the arts. It is really a mix of activities which reflects the richness of economic pursuit that has become a feature of Barbados' economy since independence in 1966 when the government took the deliberate step to diversify from its traditional reliance on agriculture.
Q: There are many offshore destinations, say, the Cayman Islands, British Virgin Islands and Isle of Man, vying for offshore investors. May I know how Barbados can stand out from its potential offshore competitors?
A:Barbados stands aside from offshore jurisdictions like the Cayman Islands, British Virgin Islands and Isle of Man, well-known to Chinese investors and their advisors principally because of its network of double taxation agreements (DTAs), investment protection agreements (IPAs) and its access to a number of free trade agreements (FTAs). Judging by the extent that Barbados can offer the Chinese entrepreneurs both tax efficiency and market access benefits, it means that Barbados is suited for those more sophisticated Chinese investors who have moved beyond solutions merely aimed at 'parking' their money offshore with no plans of 'growing' their portfolios or investing in businesses of 'substance' offshore.
Q: What are the benefits for Chinese companies to go offshore in Barbados, in terms of incorporation capital requirements, tax relief, tax-exemption on distribution of dividends, government refunds and subsidies, procedural efficiency, etc.?
A: Barbados offers all the legal vehicles that other offshore centres offer and it offers much more. Barbados is not a zero-tax jurisdiction and has a prevailing rate of 25% but with opportunities for tax rates at 1% or less depending on the nature of the economic activity involved. This is a key difference between Barbados and the other offshore centres in the region. In addition to the commercial opportunities, Barbados also provides a range of wealth-planning opportunities for Chinese investors who are concerned about securing the best education for their children while maximising their investment opportunities abroad especially in markets like Canada and Mexico where there are opportunities in the extractive industries and access to large markets for Chinese products. Perhaps most importantly for the sophisticated Chinese investor is Barbados' experience and long history of supporting international business and financial service companies especially in the North American markets. This provides Chinese investors with a partner which understands what it required to move from just 'resting' money offshore to using the money and reinvesting the returns in their businesses. This experience is not just in the private sector but is buttressed by the government regulatory authorities who have experience in securing and protecting the interests of the investors.
Q: What is the Barbadian legal system? How could a Chinese investor have access to legal consultation and representation in case he or she is involved in a local commercial dispute?
A: Barbados is home to the third oldest Parliament in the British Commonwealth and is based on the Common Law System. Its written Constitution protects the property and private interests of its residents regardless of their origin. Indeed, Barbados' success as a well-resourced, stable and highly regarded economy is based on its belief in the protection of property rights whether these rights are rights in property, investments or intellectual property. These protections are enshrined in law and carried out in practice.
Not only has Barbados and its successive governments been concerned about the protection, security and certainty of property and investments within its borders, it is also strongly committed to ensuring the protection of investment by its private sector abroad. It is for this reason that Barbados has a number of longstanding investment protection agreements in place with countries like Venezuela, China, Canada, Cuba and Ghana, to name a few. Agreements between Barbados and these states mean that Barbados will defend the rights of its investors abroad should a dispute arise.
Q: How is the current situation of Chinese investors doing in Barbados and what is your government's stand on overseas Chinese investment?
A: The strong relationship is illustrated by our tax treaty and investment protection treaty. As a result, Barbados is home to a growing number of Chinese investments and a growing number of Chinese living and working in Barbados. Both governments have actively encouraged and supported Chinese investment in a number of areas including information technology and construction with a number of Chinese investors participating directly in the local economy that branches out into the rest of the Caribbean from their Barbados bases. Within the international business and financial services sectors, there are over two hundred and fifty entities which are supported by Chinese investment.
The Chinese Embassy has been a great facilitator of the formalities required by both the Barbados and the Chinese governments to encourage new business and support existing ones in Barbados. This is however not a 'long distance' relationship by any means with successive Prime Ministers of Barbados being invited by the Chinese government to Beijing to further strengthen ties and opportunities for growth over the past thirty years. Barbados continues to welcome Chinese investment, investors and their families to share the island we proudly call home.
