Financial sector holding its own
Barbados is introducing a new product – the incorporated cell company – to boost the competitiveness of its international business and financial services sector.
The move was debated in the House of Assembly today as lawmakers considered the Companies (Amendment) Bill 2016 which was introduced by Minister of International Business, Donville Inniss.
“This is an extremely important amendment we are making today because it allows us to create another very interesting product for the international business and financial services sector,” Inniss told the House as he led off the debate.
“This sector can only grow out once the Government continues to identify, not just easier ways of doing business in Barbados, but also of equal importance, the kind of products that we have to offer to the global environment,” he added.
The House heard that incorporated cell companies provide an alternative medium through which investors in the international business sector may engage in business. The product provides a means through which the business activities, potential risks and liabilities of the company and its cells remain separate.
With the amendment to the Companies Act, international companies will be afforded the opportunity to vary the means through which they conduct business. It was further noted that the amendment will facilitate greater flexibility in respect of the types of companies which may be incorporated within Barbados and the manner in which business may be conducted by companies.
Inniss explained that the incorporated cell company is an aspect of the international insurance industry. He noted that a situation has arisen across the world where many large firms and multinational companies have set up captive insurance companies to cut the cost of premiums and other aspects of business.
The Minister of International Business told Parliament that Barbados is currently the home of 237 captive insurance companies. He said Barbados was ranked at number seven out of ten countries for the location of captive insurance companies.
Inniss also disclosed that through the captive insurance industry, Barbados insures assets globally that have a value of about $126 billion. Gross premiums collected by these Barbados-registered companies amount to $39 billion, he said.
The St James South MP told fellow parliamentarians that the international business and financial services sector is making an immense contribution to Barbados. He disclosed that the sector is contributing in excess of $900 million yearly to the economy.
Inniss pointed out that the $900 million is derived from licensing fees paid to the various Government departments, professional fees paid to attorneys-at-law, accountants and corporate administrators in the industry.
Money is also generated through rental of office space, personal accommodation and the payment of salaries. (NC)