Interview - Barbados Trusts And Foundations

1. What are the key advantages of your jurisdiction in terms of privacy & asset protection for a Chinese HNWI or Family (etc.) looking to succeed their assets to the next generation?

In an increasingly transparent world Barbados offers a range of mechanisms that enable Chinese HNWI & families to operate regulated and legally tax compliant structures from within Barbados.  Such structures will be robust and withstand review and will not therefore be deconstructed and ultimately fail due to lack of legal tax compliance when reviewed by Chinese or other tax authorities.

2. In terms of cost, how is the cost of setting up a trust/foundation in your jurisdiction compare to other jurisdictions? If it’s more expensive, what is the additional value that a client receives for this?

Barbados is very cost effective compared to other jurisdictions. Also trusts in Barbados add much more value as Barbados trusts have access to Barbados’ tax treaty network.

3. What are some of the biggest issues & challenges you come across when planning for Chinese or Asian clients in general? What are the solutions that your jurisdiction provides for these issues?

US tax planning.  Structures that enable Chinese persons to do business and invest in the USA tax efficiently. Making BVI companies and private equity funds, investing and doing business in the USA, tax resident in Barbados are some of the most typical solutions for Chinese clients.

4. We understand that some jurisdictions focus on asset protection, while others focus on asset succession products. Does your jurisdiction have a better solution for asset protection or asset succession?

The Barbados domestic trust is a superior asset protection and succession vehicle.  It has features that combine the desire for retaining some ultimate control while not undermining the fundamental nature of the trust. The features of the Barbados domestic trust enable control and tax efficiency, tax compliance and all the features of asset protection, in one simple structure.

5. What are some of the major features of the law that make the trust/foundation in your jurisdiction particularly attractive to investors?

The Barbados domestic trust is a particularly unique vehicle. Simple, cost effective and very powerful. It can achieve low taxation, has access to all of Barbados’ double tax treaties and distributions are tax deductible. 
In the new world of transparency the key feature of structures is that they do not trigger anti avoidance legislation in the home residence country of the client.  This is the main feature of Barbados based entities. They can be structured to operate tax efficiently internationally and when structured correctly they do not trigger anti avoidance legislation in the home country of the client.

Contributed by: Jonathan Brathwaite, Int'l tax advisor, Attorney at Law at Mithril Advisors