It is possible to open a bank account in Barbados as a foreigner. There are several banks to choose from and each of them may have different services that can be of better use for people living here, as well as those who want to open an offshore bank account as non-residents.
Our team of specialists can assist in the setup of the offshore bank account in Barbados. We can provide this service for both foreign individuals and companies.
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What does the offshore bank account represent?
An offshore bank account refers to a regular bank account that is set up at a commercial bank operating in a different country than the one where an entity has its tax residency. This applies to individuals who opt for personal banking solutions as well as to individuals who are investors and who plan to initiate the process of offshore company formation.
Offshore also entails the fact that the country of choice is a jurisdiction with very favorable tax conditions, where the tax system provides for many tax exemptions from the standard taxation that can be met in most countries. This is typically referred to as a tax haven.
Although Barbados is not officially considered a tax haven, investors can have many benefits if they plan to set up a business here, operating as an onshore or offshore company.
Why should a person open an offshore account?
The offshore account can have a variety of benefits. Foreigners usually seek to open an offshore account so that they can better protect their assets. This type of account can be a tax planning strategy solution and it can be used in cross-border transactions. It must be noted that the offshore account offers a greater level of confidentiality compared to the onshore one.
For businesses, the bank account is a mandatory part of the company incorporation process, and the same applies to offshore businesses, which must set up a corporate offshore bank account. Companies that are involved in online sales should also open an offshore merchant account. Our consultantscan put you in contact with reliable merchant account service providers available in Barbados.
AML/CTF policies in Barbados
Although foreigners can easily open an onshore or offshore bank account in Barbados, they need to comply with the rules concerning Anti-Money Laundering (AML) and Counter Terrorist Financing (CFT) laws. In general, banks don’t have very complex requirements concerning their foreign clients.
One of the most important in this sense is to provide evidence that the funds that will be deposited in a bank account in Barbados are obtained from lawful sources (businesses, investments, inheritance, property, salaries, etc.).
All foreigners who are not residents of Barbados have the obligation to present a bank reference letter issued by a banking institution from their home country or the country where they currently reside.
Under the AML/CFT laws, which are presented below, banking institutions must make sure that their clients meet the basic legal obligations, as the AML/CTF regulations are directly applied to banking entities, which must maintain their activity following the provisions deriving from these laws. The most important laws are:
- Anti-Terrorism Act 2002;
- Money Laundering and Financing of Terrorism (Prevention and Control) Act 2011;
- Proceeds of Crime Act 1990.
Banks need to impose AML/CTF procedures to their clients, as these laws state that banking institutions (along with other types of entities, such as financial institutions, accountants and accounting firms, etc.) need to conduct customer due diligence before entering any type of contract with a client.
Banks are also obligated to maintain the records of all the transactions completed by their clients and their identification data for a period of 5 years and, provided that local or foreign authorities may need information concerning these issues (of course, within the provisions of the law), banks have the obligation to disclose it.
Provided that a bank observes a suspicious activity, it is legally required to report it to the Financial Intelligence Unit of Barbados. When opening an offshore bank account, clients will be informed on these legal obligations, as they are included in all application forms.
It must be noted that the same rule applies for those who want to open an overseas bank account, as there aren’t any legal distinctions between the 2 ways of opening the account (online and in person), except for the manner in which the account registration is initiated.
Our team can offer more information on other legal obligations foreign clients may have when opening an account. You can rely on us for any matter arising from opening a bank account in Barbados.
Offshore banks in Barbados
Offshore banks exist in Barbados in accordance with the legislation prescribed by the Offshore Banking Act. An offshore bank refers to a legal entity that is incorporated in Barbados, has its registered address in Barbados, but carries out all its activities (or part of them) in connection to other countries.
This type of banking institution is required to apply for a license, which is issued by theCentral Bank of Barbados. Some of the conditions to obtain this license are:
- the legal entity must have a capital of at least US$2 million (this requirement is imposed if it allows third-party deposits);
- otherwise, the company may have a capital of only US$500,000;
- it is mandatory to maintain a reserve of at least 25% of the company’s net profits;
- the company can be set up by at least 1 shareholder (it must also have minimum 1 director, who must be a resident of Barbados).
There are several tax benefits for those who will open an offshore bank, some of which are: tax exemption on capital gains, no withholding taxes charged for royalties, dividends, interests, privacy protection.
Our consultants can offer the necessary support to those who want to start the process of offshore company formation for an offshore bank. We can provide step-to-step assistance during all the incorporation stages. Our services are not limited only to the incorporation itself, we also provide post-incorporation assistance.
We invite you to contact our team if you want to start a banking business here or if you want to know if you can open an overseas bank account in Barbados. We can assist clients who want to set up an offshore bank account remotely, for personal or business purposes.