The Organisation for Economic Co-operation and Development (OECD) has long championed transparency and accountability in global financial systems, using its experience and evidence-based analysis to shape policies that foster prosperity, opportunity and equality. Its reports have been instrumental in prompting countries to continue to evolve their tax policies to align with international standards. One notable example of such influence is the development of the Foreign Currency Permit (FCP) in Barbados.
In response to the OECD’s findings, Barbados took significant steps to reform its tax system in 2018, which took effect from 1 January 2019. The introduction of the FCP was a strategic move to align the country’s tax framework with international standards and to attract foreign investment. This initiative was not only a response to international recommendations but also a proactive measure to enhance the country’s economic outlook.
The FCP offers a range of benefits to entities operating in Barbados that earn 100% of their income in foreign currency. These benefits include exemptions from various taxes, such as property transfer tax, withholding tax, stamp duty, and value added tax. Such incentives significantly lower the overall cost of doing business in Barbados, making it an appealing option for foreign investors.
In recent updates made to the Foreign Currency Permits Act in 2025, the definition of ‘qualified persons’ was expanded to include external companies and trustees of a trust, in addition to the previously in-scope entities: companies, firms and societies. This update also reinstated the exemption for trusts from the Exchange Control Act, which had been removed with the repeal of the International Trusts Act in 2018.
A key advantage of the FCP remains simplified access to foreign currency by absolving companies from exchange controls. This ease of access allows businesses to conduct their operations more efficiently, without the bureaucratic hurdles that often accompany foreign currency transactions. By facilitating smoother financial operations, the FCP enhances the overall business environment in Barbados.
Another significant enhancement recently introduced is import duty relief for FCP holders engaged in the trade of services. These entities can now import a wide range of business-critical items - such as machinery, equipment, tools, and raw materials - free of customs duty, VAT, and stamp duty. Restrictions apply to the resale of these items within five years unless sold to another FCP holder or the applicable duties are paid.
The implementation and evolution of the FCP have yielded several benefits for the Barbadian economy. By encouraging a flow of foreign currency into the country, the FCP supports economic stability and reinforces Barbados’ reputation as a compliant, competitive, and trustworthy international business centre. This reputation continues to attract foreign investment, stimulate business growth, and create employment opportunities.
In conclusion, the OECD reports played a crucial role in the creation of the Foreign Currency Permit in Barbados. The FCP provides substantial advantages - ranging from tax exemptions to operational efficiencies - that make Barbados an attractive destination for global businesses. The recent updates further demonstrate the country’s commitment to maintaining a favourable and internationally aligned business environment.