INVESTMENT CLIMATE STATEMENT 2007

UNCLAS BRIDGETOWN 000085

SIPDIS

SIPDIS

DEPARTMENT FOR EB/IFD/OIA

E.O. 12958: N/A
TAGS: EINV EFIN ETRD ELAB PGOV KTDB XL
SUBJECT: INVESTMENT CLIMATE STATEMENT 2007

REF: 178303

202943

OPENNESS TO FOREIGN INVESTMENT
--------------


1. Barbados is open for business. The Government of
Barbados, through the Barbados Investment and Development
Corporation (BIDC),strongly encourages foreign direct
investment in Barbados, particularly in industries that
create jobs and earn foreign currency.


2. The Government offers special incentive packages for
foreign investments in the hotel industry, manufacturing,
and offshore business services. For example, International
Business Companies (IBCs) have a maximum tax rate of 2.5
percent on income and exemption from foreign exchange
controls.


3. The services sector holds the largest potential for
growth, especially in the areas of financial services, e-
commerce, tourism, educational, health, and cultural
services. In agriculture, the slow demise of the sugar
industry has opened up land for other agricultural uses,
and investment opportunities exist in the areas of Sea
Island cotton and hydroponics. In the financial services
sector, offshore banks and insurance companies saw a
temporary drop-off in activity as the Government improved
regulatory oversight in 2001 with amendments to the
International Business Companies Act of 1992 and the Money
Laundering Prevention and Control Act of 1988, but the
industry is thriving again under better regulatory
standards, designed to prevent money laundering and tax
evasion.


4. Telecom liberalization has brought an end to the
longstanding monopoly of Cable and Wireless, and has
introduced competition, lowered the cost of international
telecommunications, and enhanced the telecom
infrastructure. Since 2000, the Government has gradually
allowed more companies to compete in the sector, and by
early 2005 there was full competition in wireless and long
distance service. The Government is still considering
Voice over Internet Protocol (VoIP) regulations, and that
sector should open up in the future. To prepare a workforce
skilled in advanced IT services, the Government and
educational institutions such as the Barbados Community
College and the University of the West Indies have
undertaken educational and training initiatives.


5. Barbados is proud of its tradition of the rule of law.
Foreign nationals receive the same legal protections as
local citizens. The police and court systems are
relatively efficient and unbiased in commercial matters,
and the government operates in an essentially transparent
manner.


6. Local enterprises generally welcome joint ventures with
foreign investors in order to access technology, expertise,
markets, and capital. BarbadosQ economy is small, however,
and new enterprises that might compete with entrenched
local establishments, especially in the retail and
restaurant sector, may face a de facto veto of their
license by local interests. The Government did not approve
licenses for importers of U.S. ice cream and poultry
products, and some U.S. fast food franchises, such as
TGIFQs and Subway.

CONVERSION AND TRANSFER POLICIES
--------------


7. Companies can freely repatriate profits and capital
from foreign direct investment if they registered with the
Central Bank at the time of investment. However, the
Central Bank may limit or delay conversions depending on
the level of international reserves under the bank's
control.


8. The Ministry of Finance controls the flow of foreign
exchange, and the Exchange Control Division of the Central
Bank of Barbados executes fiscal policy under the Exchange
Control Act. Individuals may apply through a local bank to
convert the equivalent of USD 3,750 per year for personal
travel and USD 375.00 per day, per person, for up to a
maximum of USD 25,000 for business travel. To convert any
amount over these limits, one must apply to the Central
Bank.

EXPROPRIATION AND COMPENSATION
--------------


9. The Barbados Constitution and Companies Act contain
provisions that permit the Government to acquire
compulsorily property for public use upon prompt payment of
compensation at fair market value. The Embassy is not
aware of any outstanding expropriation claims or
nationalization of foreign enterprises in Barbados.

DISPUTE SETTLEMENT
--------------


10. Barbados bases its legal system on the British common
law system. The Attorney General, the Chief Justice,
Puisne Judges, and Magistrates administer justice in
Barbados. The new Caribbean Court of Justice (CCJ),
replaced London's Privy Council as the highest court of
appeal for Barbados in 2005.


11. The United States and Barbados are both parties to the
World Trade Organization (WTO). The WTO Dispute Settlement
Panel and Appellate Body resolve disputes over WTO
agreements, while courts of appropriate jurisdiction in
both countries resolve private disputes. The Barbados
Arbitration Act (1976) and the Foreign Arbitral Awards Act
(1980),which recognizes the 1958 New York Convention on
the Negotiation and Enforcement of Foreign Arbitral Awards,
contain provisions for arbitration of investment disputes.
Parliament has written The New York Convention's provisions
into domestic law, but has yet to ratify the convention.


12. Barbados is also a member of the International Center
for the Settlement of Investment Disputes (ICSID),also
known as the Washington Convention. Additionally,
individual agreements between Barbados and multilateral
lending agencies have provisions calling on Barbados
officials to accept recourse to binding international
arbitration to resolve investment disputes between foreign
investors and the state.

PERFORMANCE REQUIREMENTS AND INCENTIVES
--------------


13. While there are no formal performance requirements,
government officials will more likely approve investments
they believe will create jobs and increase exports and
foreign exchange earnings. There are no requirements for
participation either by nationals or by the Government in
foreign investment projects.


14. There is no requirement that enterprises must purchase
a fixed percentage of goods from local sources, but the
Government encourages local sourcing.


15. Companies must meet export performance requirements to
take advantage of certain tax incentives. For example,
Qenclave enterprisesQ must produce goods exclusively for
export outside the CARICOM region. Foreign investors must
finance their investments from external sources or from
income that the investment generates. When a foreign
investment generates significant employment or other
tangible benefits for the country, the authorities may
allow the company to borrow locally for working capital.


16. There is no requirement that locals own shares of a
foreign investor's enterprise, but some restrictions may
apply to share transfers. The Companies Act does not permit
bearer shares. Foreign investors do not need to establish
facilities in any specific location, although there are
zoning restrictions.


17. Most investment incentives in Barbados are tax
incentives, although there are some special programs for
manufacturers. Potential investors should contact a
licensed accountant and/or lawyer in Barbados to find out
which incentives fit best with their goals.


18. In the manufacturing sector, the Barbados Investment
and Development Corporation (BIDC) has established ten
well-equipped industrial parks with subsidized rent. The
BIDC may also supply limited training grants and free
technical assistance through two programs with a focus on
developing local businesses: the Export Grant and
Incentive Scheme and the Technical Assistance Program. The
former helps both locally and foreign-owned companies (but
only those foreign companies with management or marketing
branches in Barbados) by defraying export costs such as the
preparation and shipment of samples and the development of
marketing materials. The latter helps companies solve a
range of operational problems.


19. The BIDC also offers local small businesses access to
its Small Business Development Center, with conference room
facilities, communications services, short-term office
space, and a commercial library. To further help
manufacturers, the Central Bank of Barbados has established
an export credit guarantee scheme, covering pre-shipment
financing requirements and post-shipment credit risks for
manufacturing companies.


20. The Fiscal Incentives Act (1974) provides a maximum
15-year tax holiday to any manufacturer of an approved
product, provided that it meets the definition of an
enclave enterprise: manufacturing exclusively for export
outside of CARICOM; manufacturing approved products
containing a specified percentage of local value added; or
being highly capital intensive. Under the Fiscal Incentives
Act, such enterprises may import duty-free equipment, spare
parts, and raw materials from outside CARICOM. Dividends
and other distributions to shareholders during the tax
holiday are also exempt from the payment of income tax.
Non-resident shareholders liable to tax in their country of
residence are subject to Barbados withholding tax at a
lower rate. To qualify for these incentives, the enterprise
must apply to the Ministry of Economic Development.


21. Enterprises not obtaining benefits under the Fiscal
Incentives Act and generating export profits (other than
from exports within CARICOM) may receive an export
allowance expressed as a rebate of corporation tax (between
35-93 percent) on those profits. The maximum rebate of 93
percent applies if more than 81 percent of an enterprise's
profits result from extra-regional exports. Such
enterprises are also entitled to a 50 percent rebate of the
import duty applicable to all imports for use in
manufacturing. Companies may request additional relief
from the Customs Department based on the ratio of exports
to local production. The Export Development Allowance
allows a company to deduct from taxable income an
additional 50 percent of what the company spends in
developing export markets outside CARICOM.


22. Initial Allowances or Investment Allowances of up to
40 percent on capital expenditure are available for
businesses making capital expenditures on machinery and
plants, or on an industrial building or structure. Annual
depreciation allowances on such expenditures are also
available. Under Section 14A of the Income Tax Act, any
manufacturing company in Barbados can enjoy tax reductions
based on the percentage of its profits derived from export
income, as follows:


23. Rebate of Income Tax as a percent of Total Export
Profits

Percent of Profits from Exports Rebate of Corporation Tax
-------------- --------------

Up to 20 percent 35 percent
More than 20 and up to 40 percent 45 percent
More than 40 and up 60 percent 64 percent
More than 60 and up 80 percent 79 percent
Over 80 percent 93 percent


24. In the tourism sector, a Market Development Allowance
allows a company to deduct an additional 50 percent of what
it spends encouraging tourists to visit Barbados. Under
the Tourism Development Act of 2002, businesses and
individuals that invest in the tourist sector can write off
capital expenditure and 150 percent of interest. They are
also exempt from import duties, the value added tax, and
environmental levies on furniture, fixtures and equipment,
building materials, supplies, and equity financing. The Act
expands the definition of tourist sector to include not
just accommodation, but restaurants, recreational
facilities, and services. The Act encourages the
development of attractions that emphasize the islandQs
natural, historic, and cultural heritage, and also
encourages construction of properties in non-coastal areas.
The Minister of Tourism must approve all projects under
this legislation.


25. Regarding taxation, Barbados has entered into double
taxation treaties with the United States, Canada, CARICOM,
China, Cuba, Finland, Norway, Sweden, Switzerland, the
United Kingdom, and Venezuela. A new amendment to the tax
treaty between the U.S. and Barbados went into effect on
January 1, 2005. The revised tax treaty strengthens
measures to prevent U.S. companies from using Barbados as a
tax shelter on income earned in the United States.


26. Offshore businesses may operate either free of income
tax (e.g., captive insurance, foreign sales corporations)
or with a tax rate from 1 to 2.5 percent. An International
Business Company (IBC) must by the terms of its
incorporation export 100 percent of its manufacture in
order to enjoy the following tax rates on gains and
profits:

Gains and Net Profits Corporate Tax Rate
-------------- --------------
Up to USD 10 million 2.5 percent
USD 10-20 million 2.0 percent
USD 20-30 million 1.5 percent
Over USD 30 million 1.0 percent


27. An IBC may import machinery and equipment into
Barbados free from certain taxes and customs duties. IBCs
also are exempt from withholding tax and tax on the
transfer of their assets and may also make certain foreign
exchange transactions free of exchange controls. IBCs in
the information services sector receive a special tax rate
of 2.5 percent on profits, full exemption from import
duties on production-related equipment, including
computers, full and unrestricted repatriation of capital,
profits, dividends, rental of subsidized office space, and
training grants to subsidize worker training.


28. International financial service companies also enjoy
several tax incentives. Under the Exempt Insurance Act, a
company incorporating with a minimum capital of USD
$125,000 and at least one Barbadian director is eligible
for taxation on profits at zero percent for the first
fifteen years, and 2 percent on the first USD $250,000 of
profits thereafter, as well as an exemption from a
withholding tax on royalties and exchange control
restrictions. Its beneficial shareholders also must not be
persons resident in CARICOM. In 1998, legislation allowed
companies involved in the international insurance
businesses to register as Qualifying Insurance Companies,
entitled to: a tax rate of 2.8 percent, after deducting a
foreign currency earnings allowance; and 2) an exemption
from withholding taxes and exchange controls.


29. The International Trust Act allows non-residents to
create trusts for the benefit of non-residents, with no
minimum capital requirements and no withholding taxes, but
subject to 40 percent tax on profits earned in or remitted
to Barbados. Exempt Societies of Restricted Liability,
which may not acquire land in Barbados or transact business
with CARICOM residents, enjoy certain concessions for up to
30 years, including exemption from exchange controls and
withholding tax on dividends, royalties, interest, or other
interest paid to non-residents.


30. The Shipping Incentives Act of 1982 provides
concessions to shipping companies engaged in the operation
of passenger ships, leasing of ships, shipbuilding,
maintenance or repair. The concessions include a ten-year
exemption on tax and custom duties on materials connected
with the shipping activities.

RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT
--------------


31. There is a constitutional right for nationals and non-
nationals to establish and own private enterprises and
private property in Barbados. These rights also pertain to
the acquisition and disposition of interests in private
enterprises.


32. No industries are officially closed to private
enterprise, although the Government reserves the right not
to allow certain investments. Some activities, such as
telecommunications, utilities, broadcasting, banking, and
insurance, require a license from the Government. There is
no percentage, or other restrictions, on foreign ownership
of a local enterprise or participation in a joint venture.


33. The Government of Barbados has been engaged for the
past several years in efforts to strengthen the private
sector by divesting itself of a number of costly and often
unprofitable state-owned enterprises. Since 1992, the
Government has sold over USD 123.4 million of its
commercial property to private investors through the sale
of shares in Barbados External Telecommunications (to Cable
& Wireless of the U.K.),Barbados Telephone Company (to
Cable & Wireless),Barbados Mills (to Archer Daniels
Midland),the Arawak Cement Company, Barbados Dairy
Industries, Barbados National Oil Company, National
Petroleum Corporation, Barbados Tourism Investment Inc.,
and Heywoods resorts. In July 2003, the Government sold its
controlling stake in the Barbados National Bank to Republic
Bank of Trinidad.

PROTECTION OF PROPERTY RIGHTS
--------------


34. The Barbados Government has improved the legal regime
for property rights. Civil law protects physical property
and mortgage claims. Barbados signed the Paris Convention
on Intellectual Property Rights (IPR),the Madrid accords,
and is a member of the United Nations World Industrial
Property Organization (WIPO). The Government of Barbados
adopted a new Copyright Act in August 1998, and amended it
in 2004 to provide for tougher penalties. The Government
also approved legislation in September 1998 for Integrated
Circuits Topography and Protection against Unfair
Competition and Geographical Indications. In addition, the
Government recently revised The Trademark and Industrial
Designs Acts to meet world standards. Article 45 of the
Protocol Amending the Treaty that established CARICOM
commits all 15 members to implement stronger IP protection
and enforcement.


35. IPR infringement in most areas is small-scale,
although video stores sell and rent pirated DVDs and
videos, and other stores sell illegal copies of computer
software, designer items, and music.

TRANSPARENCY OF REGULATORY SYSTEM
--------------


36. Barbados uses transparent policies and effective laws
to foster competition and establish clear rules for foreign
and domestic investors in the areas of tax, labor,
environment, health, and safety. The regulatory system can
be slow at times, and some companies have complained that
the Ministry of Finance does not give adequate
justification for rejecting a license (in the case of
American fast food restaurants kept out of the market).


37. Obtaining a work permit can be a difficult and time-
consuming task. To receive a work permit for top
management, the company must show that a Barbadian national
or resident cannot fill the position. Work permits are of
two types, short-term (for six months or less) and long-
term (usually for no more than three years).


38. The principal regulatory agencies are the Ministry of
Finance and the Ministry of Economic Affairs and
Development. The Ministry of Finance regulates the Exchange
Control Authority of the Central Bank of Barbados,
including inward investment, registration of foreign
capital, currency accounts, and repatriation of capital and
earnings. Local on-shore companies must meet fairly
stringent exchange control requirements, but the Government
welcomes investment by non-residents with external sources
of financing.


39. The Ministry of Economic Affairs and Development
administers the Companies Act and other statutes dealing
with company affairs. The Companies Act is modeled on the
Canada Business Corporations Act, and creates flexibility
and simplicity for the incorporation and operation of
companies in Barbados.


40. Companies using or manufacturing chemicals must obtain
approval of their environmental and health practices from
the Barbados National Standards Institution and the
Ministry of HealthQs Environmental Division.


41. The Ministry of Commerce, Consumer Affairs, and
Business Development on rare occasions imposes price
controls, listed in the Official Gazette. The Government
controls gasoline prices.


42. Barbados enacted legislation in 2000 to create the
Fair Trading Commission (FTC) to provide consumer
protection in telecommunication and utility services. There
is no specific antitrust legislation in Barbados.


43. The Minister of Economic Affairs and Development or
the Minister of Finance must approve foreign investment.
The Chief Town Planner must approve new construction or
changes in land use. Zoning restrictions protect
agricultural land, and the Government pursues policies to
ensure environmental integrity.


44. The Central Bank must approve real property purchases
for non-residents. If a non-resident uses foreign funds and
pays for the property in Barbados, the Central Bank will
normally approve the transaction. When they sell the
property, non-residents need to pay the 18 percent Property
Transfer Tax in addition to brokerage and legal fees. The
Commissioner of Land Tax charges an annual fee based on the
assessed property value. The Government taxes hotels on 50
percent of the improved value at 0.7 percent, and
residential properties on 100 percent of the improved value
at between 0.2 and 1 percent.
EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT
-------------- --------------


45. Barbados has a small stock exchange, an active banking
sector, and opportunities for portfolio investment. Local
policies seek to facilitate the free flow of financial
resources, unless there is a shortage of funds. The
Government has, in the past, intervened in the local credit
market to control interest rates, limit the volumes of
funds available for borrowing, and borrow on the local
market. However, the Central Bank has raised interest rates
five times in the past 18 months without any government
intervention. There are a variety of credit instruments in
the commercial and public sectors that local and foreign
investors may access.


46. The Government has implemented a continuous review
process for legislation in the financial sector in an
effort to strengthen and improve the regulatory regime in
order to attract and facilitate retention of foreign
portfolio investments. The Bank Supervision Department of
the Central Bank undertook a self-assessment in 2000, and
found their on-shore and offshore sectors in general
compliance with the Basel Core Principles of Effective
Banking Supervision utilizing the Basel Committee's Core
Principles Methodology. The International Financial
Services Act, which replaced the Offshore Banking Act in
June 2002, incorporates the Basel standards, and provides
for on-site examinations of offshore banks. This allows
the Central Bank to augment its offsite surveillance system
of reviewing anti-money laundering policy documents and
analyzing prudential returns.


47. Under the authority of the Money Laundering and
Financing of Terrorism Prevention and Control Act, Cap 129,
the Government established the Anti-Money Laundering
Authority and its operating arm, the Financial Intelligence
Unit, in 2000. The Bank Supervision Department of the
Central Bank of Barbados, in conjunction with the Anti-
Money Laundering Authority in 2001, issued in 2001 the
Anti-Money Laundering Guidelines for Licensed Financial
Institutions, which were revised in 2006.


48. The Barbados domestic financial sector consists of two
indigenous and three international commercial banks, two of
which operate merchant banks and one a trust company.
There are also 38 credit unions and one money remitter.
The offshore sector includes 4,932 international business
companies, 426 exempt insurance companies and 54 offshore
banks (December 2006 figures). Starting in 2001, the
Government required Barbados institutions and legal
entities to reveal the identity of beneficiaries receiving
dividends and/or interest.


49. Assets of commercial banks totaled USD 4.1 billion in
December 2005, and remained relatively consistent
throughout the year. The reserve requirement for
commercial banks was 17 percent of deposit liabilities, and
the minimum deposit rate was 4.75 percent at the end of

2005. The weighted average interest rate was 4.12 percent
on deposits and 10.63 percent on loans for the same period.


50. Domestic deposits expanded by BBD 585.8 million in
2005 following growth of BBD 484.7 million in the previous
year. Accounts of private individuals, financial
institutions, statutory bodies, business firms, and
Government recorded growth of BBD 221.2 million, BBD 170.8
million, BBD 65.7 million, BBD 50.4 million, and BBD 26
million respectively.


51. Credit to the non-financial private sector expanded by
BBD 730 million in 2005, following growth of BBD 439.2
million in 2004. Demand for residential mortgages totaled
BBD 129.9 million and drove up personal lending by BBD
349.8 million. Lending to tourism, professional and other
services, distribution and construction expanded by BBD
155.7 million, BBD 110 million, BBD 47.1 million and BBD
51.4 million, respectively.


52. The Securities Exchange Act of 1982 established the
Securities Exchange of Barbados (SEB),which was re-
incorporated as the Barbados Stock Exchange (BSE) in 2001.
The 1982 Act was replaced by the Securities Act, Cap 318A,
which removed regulatory responsibility for the securities
market activity from the BSE. This Act helped to strengthen
the regulatory framework and development of the capital
market. In 1997, the BSE began trading corporate stocks
and fixed income securities, including Government bonds
(not commercial paper). Activities on the BSE include
regional cross-border trading arrangements for shares
listed on the Trinidad and Jamaica stock exchanges.

53. The BSE operates a two-tier electronic trading system
comprised of a Regular Market and a Junior Market.
Companies applying for listing on the Regular Market must
observe and comply with certain requirements. Specifically
they must inter alia have assets of not less than USD
500,000 and adequate working capital based on the last
three years of their financial performance, as well as
three-year projected performance. Companies must also
evidence competent management and be incorporated under the
laws of Barbados or other regulated jurisdiction approved
by the Securities Commission. Applications for listing on
the Junior Market are less onerous, requiring minimum
equity of one million shares at a stated minimum value of
USD 100,000. Reporting and disclosure requirements for all
listed companies include interim financial statements, and
an annual report and questionnaire. Non-nationals must
obtain exchange control approval from the Central Bank of
Barbados to trade securities on the BSE.


54. The Barbados Stock Exchange (BSE) is moving to full
immobilization of traditional share certificates where
clearance and settlement is fully computerized through a
Central Securities Depository. However, investors requiring
a traditional certificate can be accommodated for a small
fee and the transfer is adjudicated by the Securities
Commission under the Property Transfer Tax Act. Mutual
Funds are also regulated by the Securities Commission in
accordance with the Mutual Funds Act, Cap 320B.


55. The performance of the BSE in 2005 was, at best,
moderate. There was a general decline in the volumes and
values of shares traded when compared with 2004. This was
also a regional trend, as indicated by similar movement in
the Jamaica and Trinidad & Tobago stock exchanges. Despite
the decline in traded volume, the index and market
capitalization rose and outperformed all of the other
regional markets. The Barbados Central Securities
Depository, Inc. (BCSDI) increased its income by 38 percent
over the previous year and reduced expenses by 15 percent,
reversing a loss position in 2004, and registered a profit
in 2005. There are 27 companies listed on the BSE,
comprised of 20 domestic and seven cross listed companies.

POLITICAL VIOLENCE
--------------


56. Barbados has not experienced political violence since
riots in the 1930s.

CORRUPTION
--------------


57. Corruption is not a major problem in Barbados.

BILATERAL INVESTMENT AGREEMENTS
--------------


58. Barbados has no bilateral investment treaty with the
United States, but has a double taxation treaty and tax
information exchange agreement. Barbados has bilateral
investment treaties with Canada (CARIBCAN),China, Cuba,
Germany, Italy, Switzerland, the U.K., and Venezuela.

OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS
--------------


59. In 1999, the U.S. GovernmentQs Overseas Private
Investment Corporation (OPIC) signed with Citibank to
establish a USD $200 million Investment Facility for the
Caribbean and Central America, as one means of encouraging
investment and stimulating economic development. The
Caribbean Development Bank, which is based in Barbados,
administers this program. OPIC provides financing and
political risk insurance to viable private sector projects,
helps U.S. businesses invest overseas, and fosters economic
development in new and emerging markets.

LABOR
--------------


60. In 2006, BarbadosQ labor force was approximately
125,000, distributed in the following sectors: commerce,
tourism, government, manufacturing, construction,
agriculture, and fishing. The unemployment rate during
2006 hovered between 9 and 10 percent.



61. Wages in Barbados are among the highest in the
Caribbean. Minimum wages for only a few categories of
workers are administratively established and enforced by
law. The minimum wage for shop assistants, USD 2.13 per
hour, is only marginally sufficient to meet minimum living
standards. Most employees earn more. The standard workweek
is a 40-hour, 5-day week. Custom and practice dictate
overtime payment for hours worked in excess of 40 hours.
Workers are guaranteed a minimum of fourteen days of annual
leave and are covered by unemployment benefits legislation
and National Insurance (social security) legislation.


62. Trade unions, and the leaders of the trade union
movement, enjoy a strong voice in the labor and economic
affairs of the country through their participation in
BarbadosQ Social Partnership, a tri-partite consultative
mechanism. The major unions recognize the advantages
accruing to Barbados from foreign investment and foreign
expertise, and they are generally flexible and
accommodating in their dealings with employers.
Approximately 25 to 30 percent of the labor force belongs
to trade unions, but this small percentage belies the power
and importance of unions in Barbados; all key sectors are
unionized, with all private and public employees in
agriculture, tourism, and at the airport and seaport
belonging to a single union confederation.


63. Local labor leadership is sensitive when it perceives
a lack of respect for Barbadian laws and customs by large,
visible foreign employers, but is generally cooperative
with management in unionized shops. In late 2002 and early
2003, workers at the new Hilton complex walked off the job,
protesting numerous terminations and what they called
unfair working conditions on the construction site.
However, work on the site resumed shortly after the
walkout. There were no long-term work stoppages called by
unions in 2006.


64. Barbados does not have labor legislation that mandates
a legal process necessary for unions to achieve status as
bargaining agents, and employers have no legal obligation
to recognize unions under the Trade Act of 1954, but most
employers do so when a majority of their employees desire
representation. Early contact and rapport with Labour
Ministry officials and union leaders by foreign investors
may be helpful in terms of fostering labor harmony.
Additionally, legislation to address termination of
employment and benefits and to prohibit sexual harassment
is pending. The Government is currently developing
regulations to implement the 2005 Occupational Safety and
Health legislation.

FOREIGN TRADE ZONES/FREE PORTS
--------------


65. There are no foreign trade zones or free ports in
Barbados.

FOREIGN DIRECT INVESTMENT STATISTICS
--------------


66. The Government of Barbados compiles no official
statistics on Foreign Direct Investment (FDI). However, the
Barbados Investment and Development Corporation (BIDC)
reported that BBD 26,694,227 was invested in 2004, up from
BBD 9,798,518 in 2003 and BBD 8,604,936 in 2002. Most
recent data are from 2004, which show new investment
totaling BBD 3,899,000, up from BBD 2,783,700 in 2003 and
BBD 1,350,000 in 2002. (Note: these are not official FDI
statistics, but are numbers based on a BIDC survey.)

MAJOR U.S. INVESTORS
--------------


67. American Airlines; Barbados Mills (Archer Daniels
Midland); Bondhus Corp.; Carib Supply (BQdos) Ltd.; Charles

T. Gamble Industries; Chevron Texaco; Cingular Wireless;
Cirrus Logic; Citicorp Merchant Bank; Continental Airlines;
C F Caribbean Flavors; Delta Airlines; Ecolab Barbados Ltd.
(joint venture); Ernst & Young; Exxon Mobil; Federal
Express; Lenstec Ltd.; MSI International Ltd.; Pricesmart
Inc.; PriceWaterhouseCoopers;
United Parcel Service (UPS); U.S. Airways; and Waggoner
Barbados Ltd.

CONTACTS FOR INVESTMENT RELATED INQUIRIES
--------------


68. The following are contacts for investment related
inquiries:

Barbados Investment and Development Corporation (BIDC)
Pelican House
Princess Alice Highway
Bridgetown, Barbados
Tel: 246-427-5350
Fax: 246-426-7802
Email: bidc@bidc.org
Website: http://www.bidc.org

BIDC Q Miami Office
150 Alhambra Circle, Suite 1000
Coral Gables, Florida 33134
Tel: 305-442-2269
Fax: 305-567-2844

BIDC - New York Office
800 Second Avenue, 2nd Floor
New York, New York 10017-4709
Tel: 212-867-6420
Fax: 212-682-7496
Email: bidc@bidc.com

WEB RESOURCES
--------------


69. Additional web resources include: Barbados Investment
and Development Corporation (BIDC) Website:
http://www.bidc.org; and The Industry and International
Business Unit of the Ministry of Economic Affairs and
Development Website: http://www.barbadosbusiness.gov.bb

OURISMAN