International trusts must be set up by a non-resident and its beneficiary must also be a non-resident of Barbados. 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 or payments to non-resident beneficiaries.
Summary of International Trust Benefits
- Not taxable in Barbados if no income accrues within Barbados.
- No withholding tax on distributions to beneficiaries not resident in Barbados.
- Exempt from exchange control restrictions.
- Provide significant asset protection of trust assets from creditors, family members and economic or political risk.
International Trust Conditions
- The trust deed must specify that the International Trusts Act applies.
- At least one trustee must be a resident of Barbados.
- The settlor and the beneficiaries must be non-residents of Barbados.
- The assets of the trusts cannot include Barbados real estate.
- Income earned within Barbados must be taxed and remitted to Barbados.
- The perpetuity period is up to 100 years
- Registration is mandatory (records are however not publicly available).
Other Special Trusts
The Offshore Banking act also provides for various special trusts as follows:
- Purpose Trusts
- Asset Protection Trusts
- Unit trusts (mutual funds)