With the United States having eased restrictions on the
Spanish-speaking Caribbean island, Bruce Zagaris, a prominent
American tax attorney who has long-standing working relationship
with Barbados, said the island was well poised to act as "an
intermediary for foreign investment" in Cuba.
In a new analysis on investing in Cuba, the lawyer said
"the potential investors who may want to access Cuba from
Barbados will include, especially in the near term, hotels and
other businesses engaged in tourism and related
This included "transportation, as well as enterprises
involved in telecommunications, building and construction,
financial services, and agriculture". Importantly, all of
these activities "are also all liberalised under the revised
US sanctions," he explained.
Zagaris said much of the potential advantage for foreign
investors in Cuba using Barbados as a conduit for such investments
"results from the fact that Barbados has both a double tax
agreement and a bilateral investment treaty with Cuba, and that the
CARICOM and Cuba have a Trade and Economic Cooperation
"As of June 1, 2011, Cuba had income tax treaties with
Austria, Barbados, China, Portugal, Qatar, Russia, Spain,
Venezuela, and Vietnam. The treaties with China, Portugal and
Vietnam only apply to income while the others apply to both income
and capital. Of those treaties the one with Barbados is among those
potentially useful for planning purposes," he noted.
"The 1999 Barbados-Cuba Income Tax Treaty applies to
personal income tax and tax on profits in Cuba.
"Significantly, the DTA does not have treaty abuse
provisions. It means that significant planning opportunities exist
if foreign investors want to engage in tax planning through
Cuba also has a bilateral investment agreement with Barbados and
Barbados is also a signatory of the CARICOM-Cuba Trade and Economic
In terms of Cuba's overall investment potential, Zagaris
said "as the economic liberalisation in Cuba continues, the
traditional investors, including Canadians, Europeans and Latin
Americans, are likely to deepen their own investments as the income
of Cuban people increases and as more non-Cubans start spending
time in Cuba for second homes and extended visits".
"However, given the comparatively low levels of Cuban
income, the market for Cuban purchasers of services and products
will increase rather slowly. The entry of US banks and credit cards
as well as the increased amounts of remittances by the Cuban
diaspora and the increased activities of Americans in Cuba is bound
to have some multiplier effect," he added.
Adapted from Nationnews.com
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