Barbados IBC Abolished: Company, Permit and 9% Tax in 2026

Nikita Veremeev

11.11.2025 | 6 min read

Updated: 15.10.2026

An International Business Company (IBC) can no longer be registered in Barbados: the IBC Act, Cap. 77, was repealed with effect from 1 January 2019. International business is now carried on through an ordinary company under the Companies Act, Cap. 308. Among offshore jurisdictions, Barbados is no longer chosen for a zero tax rate, but for its double taxation agreements and clear rules.

What applies in Barbados in 2026 instead of the IBC?
What corporate tax rate does a company pay, and who needs real activity on the island?

Below are the rules from Barbados statutes and official pages: company registration, the foreign currency permit, the 9% tax, the minimum tax for large groups and economic substance. COREDO helps assess whether this jurisdiction suits a particular structure and prepare that structure for bank reviews.

The article covers the history of the IBC's abolition, how a company is registered, the tax rates and the foreign currency permit. It also looks at substance requirements, Barbados's status on the EU and FATF lists, and who the jurisdiction suits and who it does not.

IBC in Barbados: What It Was and What Applies Now

Illustration for the section «IBC in Barbados: What It Is and Key Rules» in the article «IBC in Barbados – Main Rules»
An IBC in Barbados is a historical form. Until 2019, an international business company was licensed under the International Business Companies Act, Cap. 77, and enjoyed a special tax regime. Today an ordinary Barbados company fills that role.

History: How the IBC Act Was Repealed

The International Business Companies (Repeal) Act, 2018-40 repealed Cap. 77 with effect from 1 January 2019 (sections 2 and 7). The articles of existing IBCs are deemed by law to have been amended to comply with the Companies Act, Cap. 308. These companies carried on as ordinary companies (section 5).

The benefits of former IBCs were kept only temporarily (section 3(1)):

An IBC without intellectual property holding a licence issued before 17 October 2017 kept its benefits until 30 June 2021.
An IBC holding a licence issued on or after 17 October 2017 lost its benefits after 31 December 2018.
Separate rules applied to income from intellectual property: benefits lasted no longer than 30 June 2021, and for assets acquired from related parties after 17 October 2017 they ended after 31 December 2018.

The result is simple: no new IBC can be registered from 1 January 2019, and after 30 June 2021 no company retained any IBC benefits.

Companies Act Company: Registration Requirements

Companies are registered by CAIPO (Corporate Affairs and Intellectual Property Office) under the Companies Act, Cap. 308, and the Companies Regulations, 1984. According to the CAIPO page, you need:

an approved name reservation, Form 33; without it the incorporation application cannot be filed;
the Articles of Incorporation, Form 1;
the notice of registered office, Form 4;
the notice of directors, Form 9;
a declaration by each signatory to the Articles that he or she is not a prohibited individual, that is, a person barred from doing so.

Forms 1, 4 and 9 are now merged into one electronic form, and the applicant uploads the declaration separately. By law, an attorney-at-law no longer has to make a declaration on behalf of an incorporator, but CAIPO advises consulting a lawyer.

Company Registration in Barbados, Step by Step

Name reservation: filing Form 33 and waiting for its approval.
Preparing documents: the Articles, details of the registered office and directors, the signatories' declarations.
Filing with CAIPO: according to CAIPO, processing takes approximately 5 business days or less.
Foreign currency permit, if all of the company's income will be in foreign currency: the application goes to the Director of International Business.
Opening an account: the bank carries out its own compliance check of the company and its owners.
Licences, if the activity is regulated, for example insurance or financial services: separate Licensing.

The CAIPO timeframe covers registration only. The time needed for a bank account and a licence depends on the bank and the regulator and is not included in it.

Registration gives a company its legal form, not its tax regime. Tax and currency rules are set separately, and the next section covers them.

Taxes and the Foreign Currency Permit

Illustration for the section «Advantages and tax incentives of IBC in Barbados» in the article «IBC in Barbados – Main Rules»
Barbados tax rules have been the same for former IBCs and domestic companies since 2019, apart from the transitional IBC benefits that ended no later than 30 June 2021. Special rates remain only for certain types of income and for companies of large multinational groups.

Corporate Tax: 2019–2023 and from 2024

2019–2023: a single scale under the Income Tax (Amendment) (No. 3) Act, 2018-54. The rate was 5.5% on taxable income up to BBD 1,000,000, 3% up to BBD 20,000,000, 2.5% up to BBD 30,000,000 and 1% above that.
From income year 2024: 9% under section 43(8) of the Income Tax Act, Cap. 73. The rate was introduced by the Income Tax (Amendment and Validation) Act, 2024-15.
Small business: 5.5% if gross income does not exceed BBD 2,000,000 and the company is registered as an approved small business under the Small Business Development Act, Cap. 318C (section 43(9)(a)).
International shipping: the former scale from 5.5% to 1% (section 43(9)(b)).
Income from qualifying intellectual property: 4.5% at the company's election, if the asset was created, developed or improved through its own research and development (section 43B).

The 4.5% rate does not apply to all income from intellectual property. The qualifying share is calculated with the nexus formula: the ratio of qualifying expenditure to overall expenditure on the asset (section 22A).

COREDO's practice confirms: proper structuring of an IBC taking BEPS into account makes it possible to avoid additional tax assessments in EU and Asian countries and to guarantee transparency of operations.

The 15% Minimum Tax for Large Groups

The Corporation Top-up Tax Act, 2024-16 sets an effective tax rate of 15% for large groups (section 5). A group is in scope if its consolidated revenue was EUR 750,000,000 or more in at least two of the four preceding fiscal years (section 6). The rule applies to fiscal years commencing on or after 1 January 2024.

If the group's effective tax rate in Barbados is below 15%, its companies there pay the difference as a top-up tax (section 5(2)).
In the first such fiscal year, the top-up tax applies only if the group's income is subject to an IIR or a UTPR in another jurisdiction (section 5(4)).
If the group's parent company is in a jurisdiction without such a minimum tax, its Barbados company pays tax on the former 5.5–1% scale (section 43(10) and (11) of the Income Tax Act).
The tax is administered by the Barbados Revenue Authority (BRA) (section 4).

The Foreign Currency Permit

The permit is granted by the Director of International Business under the Foreign Currency Permits Act, 2025-5. This Act replaced the 2018 Act of the same name (Act 2018-44) and is deemed to have been in force from 1 January 2019 (sections 15 and 16).

Who may obtain it: a company, an external company, a firm, a society with restricted liability or the trustee of a trust, if 100% of its income is in foreign currency (section 2).
What it gives: the Exchange Control Act, Cap. 71, does not apply to the permit holder (section 9).
Importing equipment: a holder engaged exclusively in the trade of services imports the equipment and materials its business needs free of customs duty and VAT (section 10).
Validity: the permit is valid for 12 months and is then renewed (sections 4 and 8).
Condition: the application comes with a declaration that 100% of income is in foreign currency; on renewal it is supported by the audited financial statements for the previous year (section 3(3)).

This Act contains no income tax benefits: a permit holder pays corporate tax at the general rates.

The permit is renewed every year. Invest Barbados warns that if the renewal fee is not paid within three business days of the renewal date, the permit expires automatically.

Comparison: Rules for a Barbados Company in 2026

Question	Rule in 2026	Legal basis
New IBC	Cannot be registered from 1 January 2019	Act 2018-40, sections 2 and 7
Company form	Company under the Companies Act, Cap. 308	Act 2018-40, section 5
Registration	CAIPO, approximately 5 business days or less	CAIPO page
General tax rate	9% from income year 2024	Income Tax Act, section 43(8)
Small business	5.5% with gross income up to BBD 2,000,000	Income Tax Act, section 43(9)(a)
Income from intellectual property	4.5% at the company's election	Income Tax Act, section 43B
Large groups	Effective tax rate of at least 15%	Act 2024-16, section 5
Exchange control	Does not apply to a permit holder	Act 2025-5, section 9
Economic substance	Insurance and shipping taxed below 9%	Income Tax Act, section 52A

Barbados does not compete with zero-tax jurisdictions. Its arguments are the 9% rate, a network of double taxation agreements and rules that take OECD standards into account.

Legal and Regulatory Aspects: Substance, AML, Lists

Illustration for the section «Legal and regulatory aspects of IBC in Barbados» in the article «IBC in Barbados – Main Rules»
The legal and regulatory aspects for a Barbados company in 2026 are the economic substance requirements, customer due diligence and the country's status on international lists. All three affect how banks and partners deal with the company.

Economic Substance: Rules from 2025

The Companies (Economic Substance) Act, 2019 (Act 2019-43) was repealed by Act 2025-31 with effect from 1 January 2025. It still applies to fiscal periods ending on or before 31 December 2024 (section 3). From income year 2025, the requirements are part of the Income Tax Act as Division VA (Act 2025-30).

Who is covered: companies carrying on insurance business or international shipping business that pay tax at a rate below 9% (section 52A).
What is required: the core income-generating activities are conducted in Barbados, and the company has adequate expenditure, premises and qualified staff there (section 52B).
Corporate governance: the board meets in Barbados at an adequate frequency, a quorum is physically present, and the minutes and records are kept there (section 52B).
Outsourcing: permitted to another person in Barbados if the company monitors and controls that person's work (section 52B).
Reporting: substance information is filed with the tax return, and the BRA Commissioner may conduct an audit (sections 52C and 52D).
Consequences: if the requirements are not met, the tax is reassessed at the 9% rate (section 52D).
Companies taxed at 4.5% on intellectual property income are regarded as having economic substance (section 52E).

COREDO's practice has shown that implementing a corporate governance system and a transparent shareholder structure reduces the risks of account freezes and license refusals.

AML and Compliance

A Barbados company is reviewed by its bank and, where the activity is licensed, also by the regulator. For a company holding licenses for financial services the reviews are stricter. They are also influenced by the country's status on the FATF and EU lists.

FATF: Barbados is not on the list of jurisdictions under increased monitoring of 19 June 2026.
EU: in the EU Council conclusions of 9 October 2026, Barbados is in neither Annex I (non-cooperative jurisdictions) nor Annex II.
What this means: there are fewer questions about the country itself, but the bank still reviews the structure, the beneficial owners and the source of funds.

The COREDO team implemented cases where deploying a comprehensive AML system allowed a client to obtain a license for payment services in the EU and avoid the risks of regulatory sanctions.

The more transparent the structure and its documents, the fewer questions the bank and partners ask.

Asset Protection and Risk Management

A Barbados company does not by itself protect assets or reduce tax in the country where its owner operates. The main risks come from three mistakes.

A structure without real activity: for an insurance or shipping company taxed below 9%, this means its tax is reassessed.
The wrong rate: a company in a large group must check whether the 15% minimum tax applies to it.
Losing the foreign currency permit: the Director of International Business refuses, cancels or does not renew it if the company no longer meets the conditions or has given misleading information (section 5).
Remedies: objections are filed within 21 days of the notice, and a cancellation or refusal to renew can be appealed to a judge within 30 days (sections 5 and 6).

COREDO's experience has shown that asset diversification and the implementation of a multi-layered risk management system help maintain business resilience even when international standards change.

Risk is reduced not by the choice of country but by the structure's compliance with its rules. Let us move on to managing the company and to who Barbados suits.

Managing a Company and Choosing a Structure in Barbados

Illustration for the section «Optimization and management of IBC in Barbados» in the article «IBC in Barbados – Main Rules»
Managing a Barbados company revolves around three questions: where decisions are made, which tax rate the company applies, and whether it needs a foreign currency permit.

Management and Reporting

Register: the registered office and the directors are notified to CAIPO on Forms 4 and 9.
Tax prepayments: from income year 2025, by the 15th of each month a company pays 1/12 of the tax calculated on the income of the year before the preceding year (section 64B.1).
Tax return: in it, an insurance or shipping company taxed below 9% reports on its substance (section 52C).
Foreign currency permit: annual renewal and a declaration that 100% of income is in foreign currency.

The COREDO team implemented projects where the introduction of automated reporting and audit systems enabled the client to accelerate obtaining a license and reduce operational risks.

Who Barbados Suits and Who It Does Not

It suits holding and trading structures that need double taxation agreements. The BRA publishes more than 30 such agreements, including those with Canada, the United Kingdom, China and the Czech Republic.
It suits insurance and shipping companies ready to conduct their core activities on the island.
It suits companies earning income from their own intellectual property that are ready to keep records for the nexus formula.
It does not suit "empty" companies without staff that expect a 0–2.5% tax. Lower rates apply only in the cases described above, and the general rate is now 9%.

COREDO's practice confirms: integrating an IBC in Barbados into an international structure allows not only tax optimization but also increases business resilience to regulatory changes.

Prospects for Legislative Development

The 9% rate and the 15% minimum tax were introduced in 2024 together with the OECD Pillar Two rules.
The Minister may amend the minimum tax rate by order (section 5(6) of Act 2024-16).
In 2025 the substance requirements moved from a separate Act into the Income Tax Act.
Before setting up a structure, it is worth checking the current rates against the BRA and the text of the law.

COREDO monitors legislative changes and helps clients adapt their structures in good time.

FAQ: Companies in Barbados After the IBC's Abolition

Illustration for the section «FAQ on IBC in Barbados - answers» in the article «IBC in Barbados – Main Rules»

Can an IBC be registered in Barbados in 2026?
No. The IBC Act, Cap. 77, was repealed with effect from 1 January 2019. Instead of an IBC, an ordinary company is registered under the Companies Act, Cap. 308.

What happened to existing IBCs?
They carried on as companies under the Companies Act. Their benefits ended no later than 30 June 2021, and for some companies already after 31 December 2018.

What corporate tax rate applies?
9% from income year 2024. Exceptions: 5.5% for a registered small business with gross income up to BBD 2,000,000, 4.5% on income from qualifying intellectual property and the 5.5–1% scale for international shipping.

What does the foreign currency permit give?
The Exchange Control Act, Cap. 71, does not apply to the holder. A company trading exclusively in services imports equipment for its business free of duty and VAT. The condition is 100% of income in foreign currency, and the permit is renewed annually.

Is real presence in Barbados required?
By law, for insurance and shipping companies taxed below 9%. For other companies, banks and the tax authorities of other countries also check where the company is actually managed.

How long does registration take?
According to CAIPO, approximately 5 business days or less after the name is approved. A bank account and licences are handled separately, and their timing depends on the bank and the regulator.

Is Barbados on the EU blacklist?
No. In the EU Council conclusions of 9 October 2026, Barbados is in neither Annex I nor Annex II. It is not on the FATF list of 19 June 2026 either.

Key Takeaways and Steps for Entrepreneurs

An IBC in Barbados is a historical form: no new IBCs have been registered since 1 January 2019.
Today a company under the Companies Act, Cap. 308, is used, together with a foreign currency permit where all income is in foreign currency.
The general corporate tax rate is 9% from 2024; companies of large groups pay at least 15%.
From 2025 the substance requirements are in the Income Tax Act and cover insurance and shipping taxed below 9%.
COREDO's support: assessing the jurisdiction, preparing documents, opening an account, licensing and compliance.

If you are considering Barbados for a holding, trading or insurance structure, contact the experts at COREDO. We will assess whether the jurisdiction suits your business and help prepare the documents for registration, the bank and the regulator.

IBC in Barbados: What Replaced It and Which Rules Apply