Business
FATCA among the new challenges affecting Barbados in the International Financial Services sector
The Governor of the Bank of Barbados DeLisle Worrell has revealed that new challenges such as the Foreign Account Tax Compliance Act (FATCA) are affecting the island-nation’s international financial services (IBFS) sector.
Addressing the fifth annual International Business and Financial Services Sector conference late last week, Worrell said that while the event provides an opportunity to reflect on the challenges and opportunities for Barbados “the challenges we face in the international financial services sector are of the same nature as the challenges our economy has always faced in international competition with players much larger than ourselves.
“The lessons of our past are that you must know your strengths and operate well within them, you must make a game plan based on those strengths, you must arm yourself fully with research and information, you should implement your strategy in a flexible, responsive way, and you should prepare and commit yourself for the long haul. These are the lessons we must apply in facing the new challenges in the international financial services sector.”
The international financial services sector in Barbados faces new challenges, often referred to by acronyms such as BEPS, FATCA and FAPI rules.
FATCA is a United States federal law that requires United States nationals, including individuals who live outside of that country to have reported their financial accounts held outside of the United States, and requires all global non-US Financial Institutions to search their records for suspected US persons for reporting their assets and identities to the US Treasury.
Worrell said in responding to the current challenges Barbados must play to its strengths.
“Our value proposition is that international companies can establish subsidiaries in Barbados to perform international transactional services that they would otherwise do in a major metropolis such as Toronto or New York.
“They are able to reduce costs and be more competitive because wages for skilled professionals in Barbados are so much lower. They are able to offer the same quality of service because Barbados boasts international levels of social and economic infrastructure, and excellent communications with North America, Europe and beyond.”
According to Worrell, Barbados has regulatory and legal oversight systems that are constantly being upgraded in light of guidance from the Basel Committee, the International Monetary Fund (IMF) and the Financial Action Task Force as well as the the Global Forum among other international bodies.
“We are constantly expanding our range of products. And we are not a tax haven; companies operating in Barbados are liable to pay corporation tax,” he said, adding that Barbados was also seeking new opportunities to strengthen international financial services and activities, with the exploration of new markets in Latin America, Africa, the Middle East and beyond.
