Barbados is Canada’s number one source of revenue from international financial centres worldwide and its third largest jurisdiction for total foreign direct investment.
Those findings, contained in a new Canadian-based scientific study, were presented this morning to a World Forum On International Financial Centres In A Borderless Digital Environment at the Hilton Barbados Resort.
Associate Professor at Canada’s Rotmer School of Management Walid Hejazi, who presented the findings, noted that Barbados was the only country in the world with whom Canada trades that provided the greatest level of additional financial benefits as far as offshore companies are concerned.
He told the forum that as a result of Canadian companies investing in Barbados as a conduit to the global economy, Canadian exports are worth between $2.6 billion to $3.1 billion more than they would have been, had those firms not had access to Barbados.
“So as Canadian companies increase their footprint internationally, they are increasingly using offshore financial centres as conduits into the global economy, and of the 30 or so offshore financial centres that are relevant for Canada, Barbados is the most important . . . Eight per cent of all of Canada’s foreign investment abroad comes into or through Barbados,” Professor Hejazi revealed, adding that represents about $62 billion in 2013.
“When you look at the top eight or nine offshore financial centres relevant for Canada, you look at Barbados and Barbados is much further ahead, and the next closest jurisdiction will be the Cayman Islands which has given one half of what Barbados receives.”
The business expert said the reason Barbados has become so important to Canada, was not just because of the tax exemptions.
“The key thing is that Barbados is a jurisdiction that allows Canadian companies to open up an affiliate to leverage all of these bilateral tax treaties, set up in Barbados and from Barbados, use it as a hub to international activities and from there go onto the global economies by leveraging the environment here in Barbados.”
Professor Hejazi suggested that Barbados was unique in the world with its double taxation treaties and bilateral investment agreements, which distinguished it from many other offshore centres.
He reasoned that differences in culture and language correlate significantly in successful business trading arrangements.
“So language and religion and distance and time zones . . . all of these things really matter. It’s a parliamentary democracy like Canada, it has a strong political system, operates on a common law, [has a] clear understanding of legal and compliance of law enforcement and the legal framework . . . and it has a low crime rate and is safe for expatriates to come and to bring their families.”
He added that Barbados’ institutions and high level of educated people, coupled with the other benefits, could not be duplicated in most other countries.
Meanwhile, Governor of the Central Bank of Barbados, Dr Delisle Worrell said the research confirmed that the net worth of this country’s international financial services sector was built on a foundation of double taxation treaties.
Dr Worrell said Barbados has also been able to reap benefits.