With increasing globalisation comes the need for ease of movement in relation to work, education, residence, retirement or recreation. High net worth individuals (HNWIs) are generally more inclined to change their jurisdiction of residence for reasons of asset protection, succession planning, safety and security, greater business opportunities, or simply to enjoy nature's bounty, all of which are possible in Barbados. Indeed, residence in Barbados is particularly attractive due to the island's cosmopolitan feel and good safety record.
The laws of Barbados allow for various types of residency, which include immigrant status, permanent residency, citizenship, being a CARICOM Skilled National, and holding a work permit (WP). More recently, the Government introduced the Special Entry and Residency Permit (SERP), specifically geared towards HNWIs.
In the international business community, the most popular avenue available for foreign, specially qualified individuals wishing to work and reside in Barbados, is to apply to the Immigration Department for a long term WP. Generally, the company which seeks to employ the individual will make the application, but owners of companies can also apply for WPs to work in their company. Long term WPs are granted anywhere from one to five years. The spouse and dependants of the WP holder can be granted permission to accompany him/her and to reside in Barbados.
Unlike some of its Caribbean neighbours, Barbados does not currently offer an economic citizenship programme. Such regimes provide that investment in a certain amount of infrastructure, philanthropy or real estate could lead to citizenship, provided certain conditions are fulfilled. Instead, for HNWIs wishing to reside in Barbados, there is the SERP. A SERP grants the right to reside, but not work, in Barbados. In practice, SERP holders are typically granted a long term WP upon submission of the relevant application and payment of the applicable WP fee, if they wish to work in Barbados.
The criteria for eligibility for SERPs require that the applicant must, have a net worth in excess of US$5M and an investment in Barbados valued at US$2M or greater. A second category allows for a HNWI to make an investment of US$2M to be eligible for a SERP. Investment may include rental real estate, property development projects, manufacturing, tourism, bank deposits, mutual funds or bonds or any financial instrument. The SERP can be issued for an indefinite period to qualified applicants who are 60 years of age, while for those under 60, but over 50 years, a ten year SERP is possible, renewable as indefinite upon attaining 60 years. Those under 50 years will receive a variable term until the SERP holder attains 60 years, renewable as indefinite thereafter.
The main categories available are:
|Category||Length of stay|
|i.||Over 60 years*||Indefinite|
|ii.||50 to 60 years*||Term to 60|
|iii.||Under 50 to 60 years*||Term to 60|
|iv.||US$2M investment||5 years|
|v.||Special skills||5 years|
*Applies to HNWIs with a global net worth of a minimum of US$5M, including an investment of US$2M in Barbados
A spouse will be required to pay the application fee along with the fee for the SERP. On the other hand dependants (children) will be required to pay the application fee and will be granted a term to stay in Barbados to run concurrent with the SERP holder. The SERP regime provides flexibility and convenience for foreign nationals wishing to reside in Barbados. The programme is evolving and will be refined over time.
In considering the requirements for residency status in Barbados, it should be noted that a person need not be domiciled in Barbados to be considered a resident of Barbados. Where an individual is resident but not domiciled in Barbados, that individual is taxed in Barbados only on amounts remitted to Barbados, and is eligible to utilise the Foreign Currency Earnings Credit in the Income Tax Act, which generally reduces the effective tax rate to about 2.4%. Where an individual is resident and domiciled in Barbados, they are taxed on their worldwide income, whether or not remitted to Barbados. It is also important to note that Barbados does not have inheritance, wealth or capital gains taxes, and certain other exemptions are also found in its double taxation treaty network.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.