Private Wealth Management Trusts in Barbados

International Trust

The International Trusts Act allows trusts to be created by non-residents for the benefit of non-residents. There are no minimum capital requirements for Barbados Trusts and they can be either of fixed interest or discretionary. An International Trust is taxed on its profits earned in, or remitted to Barbados but there are no withholding taxes on payments to non-resident beneficiaries.

 An International Trust must satisfy the following conditions:

The Trust deed must specify that the International Trusts Act applies

The settlor and the beneficiaries must be non-residents of Barbados

The assets of the Trust cannot include Barbados real estate

One of the principal benefits of the international trust is its asset protection provision. To qualify as an international trust:

at least one trustee must be resident in Barbados;

settlor must be resident outside of Barbados;

beneficiary is not a resident of Barbados (with certain exceptions);

trust instrument must specify that the ITA applies;

immovable property is owned in Barbados;

income derived within Barbados is taxed or remitted to Barbados

VAT is zero-rated, exempt from exchange controls, and Barbados; withholding tax

;

perpetuity period is up to 100 years; and

Registration is required but does not become publicly available.

The ITA also provides for the establishment of non-charitable purpose trusts which may have no named or ascertainable beneficiaries. One of the key attractions of the purpose trust is that it need not be set up for charitable purposes and may therefore be established for a group that does not otherwise meet the criteria of a charity. The purpose trust may be used in many diverse business transactions.