Wayne Fields, President DGM Financial Group Tel: 1 (246) 434 4850 dgmfinancialgroup.com Trust & Corporate Services Management services for Captive Insurance, Insurance and International Companies Family Office Management License applications for International Banks and Insurance Companies Immigration Applications Listing Sponsor, International Securities Market in Barbados FINANCIAL SECURITY SECURITY . TRUST. DEPENDABILTY2020 BARBADOS INTERNATIONAL FINANCE & BUSINESS | 3 ContentsSponsors Barbados International Finance & Business magazine is a publication of Invest Barbados (IB). IB is grateful to the business community and the service providers for their support on the editorial committee and in contributing articles. We also thank the following sponsors: Brookfield International Bank Inc. Chancery Chambers CIBC FirstCaribbean International Bank Cidel Bank & Trust Inc. Dentons Deloitte DGM Financial Group Ernst and Young InterCaribbean Legal KPMG PricewaterhouseCoopers SRS Strategic Risk Solutions (Barbados) USA Risk Group Introduction to BIF&B 2020 Chairman's Message Charting a Path in a Changing World A Salute to Bernell Arrindell, CBE, SCM Strengthening Ties Between Bridgetown and Beijing The BSE: Buttressing Barbados’ Re-emergence Through Strategic Alliances and International Recognitions Barbados Facilitating Innovation – The Fintech Silicon Valley The Fed’s New Inflation Paradigm Barbados Economic Substance Test – An Overview CASE STUDY: A Perfect Base for Growing Global Operations Economic Substance in a Low Tax Jurisdiction The State of Technology – A Review Tax Convergence and Harmonisation of International Tax Laws Jefferson, Europe and The Hopeful CASE STUDY: Building a Modern Investment Company Recent Amendments to the Companies Act Barbados Overhauls Its Exchange Control Regime Legislative Changes in the Insurance Sector Barbados Private Placement Life Insurance: A Wise Choice in a Transparent World Barbados-Based Assignment Companies – Helping Settle Litigation Streamlined Banking Solutions for Captive Insurance Companies ...and so much more Investment Strategies for Captive Insurance Companies New Opportunities for Insurance Companies Residency by Investment – Barbados’ Treaty Edge Barbados and the United Kingdom – Business Opportunities Seven Little Bajan Secrets! 04 05 07 08 09 10 12 13 14 15 16 18 19 20 21 22 24 26 28 29 30 32 34 35 37 39 414 | 2020 BARBADOS INTERNATIONAL FINANCE & BUSINESS Barbados is an International Financial Centre located in the Caribbean. Not only is it a leader in financial services, the country has expanded in several areas including international schools, Information, Barbados also continues to focus on implementing a new Organisation for Economic Co-operation and Development Base Erosion and Profit Shifting compliant framework and introducing Substance January 1, 2021. To this end the Barbados Government Barbados Economic Substance Guidelines was issued For international companies seeking a global financial centre, Barbados remains a domicile of choice. I invite Introduction to BIF&B 2020 Not sure which way to go with captives? Follow us. We’ve been guiding the way since 1981. CAPTIVE Integrity Independence Innovation Barbados Office 6th Floor CGI Tower, Warrens, St. Michael, Barbados BB22026 Contact Jeanne Crawford at 246.432.6467 or JCrawford@USARISK.bb USARISK.COM MANAGEMENT 2020 BARBADOS INTERNATIONAL FINANCE & BUSINESS | 5 Warm greetings! Welcome to the 12 th edition of the Barbados International Finance & Business, a new decade and a new era. We look forward with great anticipation to signal achievements for our nation and more specifically our business sector, throughout this decade. At the end of 2019, Barbados celebrated the news from Standard and Poor’s that the credit rating of its foreign currency debt was upgraded to B-. This encouraging report is certainly a fillip for the growth prospects of the economy, as it will instill a renewed sense of confidence to the discerning investor seeking to set up business or expand operations in Barbados. The country is indeed on a positive trajectory and the Government has pledged to stay the course and continue charting an upward path through economic reform and transformation. Another positive occurrence during the previous year was Government’s announcement that Barbados will re-engage the Asian market, through the establishment of an Invest Barbados office in Beijing, China. This office will complement the thrust of its existing offices in New York, Toronto and at headquarters in Bridgetown. China with its strong economy, is a world leader in technology, exports and manufacturing. In addition to strengthening relations in Asia, the recent deepening of ties with African countries such as Ghana and Kenya reflect an expanded global outlook. Barbados has signaled to these countries its desire to forge ahead with proposals relative to education, financial services, health, information communication technology, renewable energy and trade, as well as forming air and sea linkages. Africa will continue to be on our dashboard in 2020 and beyond as we explore mutually beneficial opportunities for our respective countries. We fully recognise the times ahead will be challenging. However, we are confident that the Barbados brand, a resilient brand, will withstand these tests. We will not be daunted by a swirling geo-political landscape, the uncertainties of BREXIT or unprecedented impact of the coronavirus pandemic. Together, as a nation, we will face each challenge and find the opportunities for progress and success therein. We must and we shall. We encourage all Barbadians, by birth, descent, choice and those who simply love the country, to visit and join hands in an effort “to build the best Barbados… together.” I invite you to explore the real advantages of setting up business in Barbados. Make Barbados your domicile of choice. Together, let us work to achieve new levels of growth and prosperity, through 2030 and beyond! Chairman's Message John Williams ChairmanCONTRIBUTORS Technical Review: Ben Arrindell Editorial Review: James Gardiner Jean-Paul Cumberbatch Sandra Payne Authors: John Williams Invest Barbados jwilliams@investbarbados.org Kaye-Anne Brathwaite Invest Barbados kbrathwaite@investbarbados.org Marlon Yarde Barbados Stock Exchange marlon.yarde@bse.com.bb Terry Belgrave Barbados Stock Exchange terry.belgrave@bse.com.bb Robert Simmons Dentons robert.simmons@dentons.com Ryle Weekes Cidel Bank & Trust rweekes@cidel.com Carlos Stevenson Cidel Bank & Trust cstevenson@cidel.com Liza Harridyal-Sodha Harridyal-Sodha & Associates liza@lizalaw.com Jonathan Fox AFM International jfox@afminternational.com Louisa Ward KPMG louisaward@kpmg.bb Lily Dash Hannah Properties Ltd. ldash@hannahproperties.com Javier Lemoine PricewaterhouseCoopers javier.lemoine@bb.pwc.com Sir Trevor Carmichael Chancery Chambers chancery@chancerychambers.com David Staples Williams Caribbean Capital dstaples@williamsindustries.bb Mary Mahabir Lex Caribbean mary.mahabir@bb.lexcaribbean.com Joanna Austin Lex Caribbean joanna.austin@bb.lexcaribbean.com Novaline Brewster Central Bank of Barbados novaline.brewster@centralbank.org.bb Kester Guy Financial Services Commission info@fsc.gov.bb kguy@fsc.gov.bb Charles Gagnon Amphora Life cgagnon@amphoragroup.bb Kyle Rudder Structured Assignments Inc. krudder@structuredassignments.bb Sean Coleman Structures scoleman@structures.com Paul Jenkins CIBC First Caribbean International Bank Inc. paul.jenkins@cibcfcib.com Andrew Alleyne Argentum Asset Management Inc. aalleyne@argentummgmt.com Maria Robinson Ernst & Young maria.robinson@bb.ey.com Ruan Martinez Bynoe Martinez & Co Attorneys-at-law rmartinez@bynoemartinez.com Justin Cole DGM Financial Group jcole@dgmgroup.com John McLeod Eticas International j.mcleod@forvestgroup.com Design & Layout: Blueprint Creative Inc. Barbados International Finance & Business 2020 Edition Published by Invest Barbados Barbados: (246) 626-2000 Toronto: (416) 214-9919 New York: (212) 551-4375. Email: bifb@investbarbados.org I www.investbarbados.org © Copyright Invest Barbados 2020. All rights reserved. No part of this publication may be reproduced or transmitted in any form or any means, or stored in any retrieval system of any nature without prior written permission of the copyright holder. The views expressed in this magazine are those of the contributors, and not necessarily those of Invest Barbados. The information provided in this magazine is meant as a guide only and does not amount to professional advice. 2020 BARBADOS INTERNATIONAL FINANCE & BUSINESS | 7 Charting a Path in a Changing World It is with a special sense of pride and purpose that I engage with you for the first time since assuming leadership of Invest Barbados. Invest Barbados, together with key stakeholders, continue to position Barbados to become a premier centre for global business. Particularly, the Invest Barbados team is engaging the world, as it executes its mandate of landing sustainable foreign direct investment and international business for Barbados. This comes at a time when the economy continues to improve, following the successful implementation of the first phase of the Barbados Economic Recovery and Transformation programme. In addition, the Barbados Stock Exchange (BSE) was recently acknowledged by Her Majesty's Revenue and Customs as a Recognised Stock Exchange. This allows listings on the BSE to qualify for the Quoted Eurobond Exemption with the benefit of withholding tax of 20% on interest payments. Developments such as these reflect the country’s determination to remain resilient, displaying the dedication and vigour necessary to resuscitate and propel the economy. Our strategy now must be to use the solid base laid over the past year to pursue initiatives that will result in increased investment activity and economic growth for Barbados. This must still be our focus in the face of the coronavirus pandemic. Our strategy is also aligned with the nation’s push towards a digital economy, designed to make Barbados more attractive in the medium and longer term. Additionally, it is certain to drive the ease of doing business in the country closer towards efficiency and best practice standards. As this cultural shift becomes the country’s modus operandi, our ranking in the international arena will also become even more competitive. Similarly, the recently enacted legislation will tangibly enhance the Barbados value proposition. For example, the Companies (Economic Substance) Act, requires that “Core Income Generating Activities” be conducted in and from Barbados. Locally based foreign enterprises can meet this requirement by adding value, mainly by employing more of our skilled human resources, and continue to enjoy the benefits of maintaining their entities in Barbados. Given the country’s well-educated workforce and a range of professional and business services, Barbados remains attractive to potential investors as a jurisdiction that can readily satisfy the substance requirements in place globally. Barbados also stands to benefit from a new and unorthodox area of opportunity that has emerged - medicinal marijuana. The Government, recognising the advantages to be derived from this sector, recently passed the Medicinal Cannabis Industry Act, which provides a framework for engagement. The establishment of a regulatory authority is another positive step in the advancement of this sector. The medicinal cannabis opportunity reinforces the ongoing appeal of our country. We invite investors pursuing interests in medical marijuana as well as other health-related areas, to look no further. Invest Barbados will continue to be a lighthouse, steering you not only to emerging opportunities, but supporting interest in more traditional areas including, global banking and insurance, financial technologies, wealth management, global educational services, renewable energy, niche manufacturing and information communication technology. During 2019, Invest Barbados participated in exploratory business development missions to Ghana, Kenya and Morocco. Plans are in train to establish a new office in Beijing to reinvigorate business with China and further afield in Asia. We will continue to strategically target markets with the best prospects. Best wishes for the year and decade ahead. Our team is keen to assist in building a stronger Barbados. Let’s help you to make your investment goals a reality. Kaye Brathwaite CEOA Salute to Bernell Arrindell, CBE, SCM During 2018, Ben was Chair of the Barbados International Business Association’s Taskforce, charged with the responsibility of revising Barbados’ international business legislation to ensure the country’s compliance with the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Action 5 initiative. Successive governments have valued his expertise. Making the 2020 New Year’s Honours List has added yet another accolade to this accomplished gentleman’s portfolio of noteworthy recognitions. The Invest Barbados team and industry partners publicly salute Bernell Llewellyn Arrindell, CBE, SCM, for his sterling service to Barbados and extend best wishes for many more years of success. Invest Barbados joins with stakeholders engaged in global business from Barbados in extending hearty congratulations to Bernell 'Ben' Arrindell, Silver Crown of Merit (SCM), who was honoured in the Queen’s 2020 New Year’s Honour List for his outstanding contribution to the international business services sector in Barbados. He was awarded the Commander of the British Empire (CBE). Presently the Deputy Chairman of Cidel, he also serves as Special Envoy and Advisor to the Government of Barbados, consulting on business and product development in relation to Barbados’ global business sector. He is a member of Invest Barbados’ Board of Directors. Ben is an ‘in-demand’ speaker on the international tax circuit. This international tax consultant has a wealth of experience in international business, having worked for over 30 years in the UK and Barbados. During his distinguished career, he has held several executive positions, which include International Tax Partner and Country Managing Partner for Ernst & Young Barbados, where he provided tax advisory services to major multinational companies and high net worth individuals. He was also a Chairman and Director of the Barbados Private Sector Association, as well as a member of the United Nations Committee of Experts on International Co-operation in Tax Matters. Ben spearheaded the Joint Policy Working Group’s Strategic Planning Subcommittee, which developed Barbados’ International Business Strategic Plan 2007 – 2012 and was also a member of the team that developed the 2014 – 2019 plan. Over the years, Ben has consistently made significant contributions to the development of Barbados’ business sector. In fact, he served as an adviser to the Barbados Government since 1998 on double taxation treaty strategy, the development of new legislation, and the impact of international tax developments on Barbados’ attractiveness as a domicile. He was awarded the SCM in 2012 for services to Barbados’ international financial services sector. Strengthening Ties between Bridgetown and Beijing Hallam Henry was recently appointed Senior Business Development Officer at Invest Barbados. He is responsible for attracting foreign direct investment from China. Hallam’s language skills, including fluency in Mandarin, experience in living and working in China, as well as his understanding of the intricacies of navigating Chinese cultural norms and business environment, are among the assets he brings to this assignment. During 2010, Hallam made the trek from Bridgetown to Beijing to commence a Bachelor’s degree in Computer Science & Technology. He became fluent in Mandarin during his time at China’s renowned Tsinghua University, where he developed an interest in increasing his knowledge of China and its relations with the world. He pursued a Master’s in Chinese Politics, Foreign Policy and International Relations. On completion, Hallam embarked on a mission to actively promote relationships between Barbados and other countries with the economic powerhouse that is China. During his eight-year stint in China, Hallam frequently served as an interpreter for both Chinese and international clients, including assisting in negotiations between Chinese contractors and several Caribbean governments. He also collaborated with the Barbados Embassy at Beijing to facilitate meetings and orientations for visiting Barbadian delegations representing both the public and private sectors. China is the world’s largest economy, measured by purchasing power and the second largest, by gross domestic product. Barbados was among the first group of English-speaking Caribbean countries to have established diplomatic ties with China in the 1970’s. In fact, Barbados and China established diplomatic relations in 1977, and since then, relations have continuously been enhanced, economic co-operation expanded and educational and cultural co-operation strengthened. Barbados has a double taxation and a bilateral investment protection treaty with China. Barbados continues to successfully attract foreign direct investment from its traditional partners of Canada, the UK and USA. The establishment of an Invest Barbados office in Beijing will boost business from this market and complement its other overseas offices located in New York and Toronto. It will also be testament to the country’s expanded global outlook and commitment to strengthening business ties with China.Next >