Business Facilities - April 2008 - (Page 29)

INTERNATIONAL PROFILE Caribbean By Karim Khan Economic Transformation in the Islands The Caribbean island nations of Barbados and Jamaica are in the midst of transitioning their economies to rely on higher-value activities. T he Caribbean basin is dotted with island nations small in size, but generous in benefits bestowed upon companies doing business there. Two of them, Barbados (population 274,000) and Jamaica (population 2.8 million), offer unique legal, tax, logistics, and human capital advantages for expanding companies. Most people know these countries for the quality of life they offer; while this is a selling point, it’s also just one of many factors that has led some of these countries to success in attracting foreign investment. Lately, Barbados and Jamaica have become more ambitious in their efforts to let the world know what they have to offer growing companies. BARBADOS COST ADVANTAGES Low corporate tax rate of 2.5% (maximum) No capital gains tax Full repatriation of capital, profits, and dividends Duty free access to the United States, Canada, the EU, and CARICOM countries. (CARICOM nations include the Bahamas, Barbados, Belize, Guyana, Haiti, Jamaica, Trinidad and Tobago, and other Caribbean states.) Double taxation and investment protection agreements with a wide range of countries, including China Exemption from exchange controls, with no withholding taxes on dividends, interest, management fees, and royalties paid Barbados’ literacy rate of 99.7% underscores its potential for success in industries beyond tourism. Western companies, particularly those from the United States and the UK, will recognize the legal environment since it’s derived from English common law and statutes. Health care in Barbados, according to Barbadian economic developers, benefits from the most modern medical facilities in the Eastern Caribbean (giving rise, incidentally, to a growing “healthcare tourism” trade). Although agriculture (mainly sugar) and tourism continue to be critical pillars of the local economy, Barbados is relying on growth in international business, financial services, and light manufac- turing (including cement blocks, clay tiles, garments and textiles, electronic components, and chemicals) to increase its economic diversity. Barbados spends more on education (both as a share of GDP and as a share of total government expenditures) than either the U.S. or Canada. That helps account for its high literacy rate as well as its ranking of 31st (out of 177 countries) in the United Nations Human Development Index 2006. In the World Economic Forum’s Global Competitiveness Index 2006-2007, Barbados also ranked 31st (out of 125 countries measured), and was ranked fourth in the western hemisphere. (Its rank fell to 50th in the 2007- SELECT FINANCIAL INCENTIVES IN JAMAICA Export Industry Encouragement Act: Allows approved manufacturers to develop a product exclusively for export to non-CARICOM markets. In return, for 10 years, the manufacturer will receive income tax relief and exemption from customs duties and general consumption tax on imported raw materials and machinery. Export Free Zone Act: Allows for tax exemptions, duty-free import, repatriation of earnings, and minimized customs procedures for companies operating within specified export processing zones in the country. Duty-free imports: Includes capital goods, raw materials, components or articles used in the manufacturing process, and specified articles for the construction, alteration, extension, repair or equipping of premises in the free zone. Export Industry Encouragement Act: Provides duty-free importation of raw materials and capital goods, and a tax holiday on profits for 10 years. Moratorium on Duties: Allows investors without free zone status to pay their import duties over an average two-year period. BUSINESS FACILITIES 29

Table of Contents Feed for the Digital Edition of Business Facilities - April 2008

Business Facilities - April 2008 Contents First Word Snapshots Corporate Moves: Ohio Businesses On the Move Corporate Moves: Nebraska If You Build It, They Will Come A Tale of Two Industries Economic Transformation In the Islands Diversity: A New York State of Mind Growing in the Sun Key Kansas Industries Get a Boost How To Choose the Right Commercial Real Estate Broker Missouri Downtowns Dare to Dream Advertiser Index Ask the Expert

Business Facilities - April 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.