Barbados Societies with Restricted Liability (SRL)
Similar to what is known as a Limited Liability Company (LLC) in other jurisdictions, a Society with Restricted Liability (SRL) can take one of two forms. It can either be set up as an Exempt SRL or a Non-Exempt SRL. Exempt SRLs, also known as International SRLs (ISRLs), are used mainly for international transactions and are prohibited from owning land for business purposes and transacting business with CARICOM residents. Non-Exempt SRLs on the otherhand are subject to standard coporate tax rates but are allowed to transact business with CARICOM residents who can have ownership share in the company exceeding 10%.
SRL Characteristics:
- Limited liability
- A maximum of 50 years duration
- The rights, powers and privileges of an individual
- Quotas (the owners' share in the company), have transfer stipulations that limit the rights of the transferee to participate in the SRL without the agreement of all members
- The ability to seek, as an Exempt SRL, the benefit of the special tax and other privileges outlined below
Benefits
Benefits of this statute, in conjunction with other relevant benefits are:
- Incorporation is inexpensive and convenient
- A physical presence in Barbados is not required. There must however be a locally registered agent and office
- Tax on income on a sliding scale, from a maximum of 2.5% to a minimum of 0.25%
- Exemption from all withholding taxes
- No capital gains tax or estate duty
- Tax credit in respect of taxes paid outside of Barbados is allowable but only insofar as it reduces tax payable in Barbados to a minimum of 0.5%
- Complete freedom from exchange control
- Privacy is protected and there is no need to publicly file financial statements
- Books of account may be kept outside Barbados and in foreign currencies
- No minimum capital rules
- Bearer shares are permitted
- Full corporate mobility
- Tax Treaty network
- Convention expenses allowed by U.S. tax authorities
- Modern and flexible corporate law
- The sale of foreign real estate or investments, and the transfer of equity in an SRL, are not subject to local transfer taxes and stamp duty
- An SRL may import, free from all customs duties, machinery or materials for use in its business
- Benefits and exemptions are guaranteed for a minimum of 30 years
All of these benefits apply to a SRL which elects to be treated as an exempt SRL; whereas several of the benefits would not otherwise apply.
How to Qualify as a SRL
To fulfill the requirements of a SRL, the entity must:- Be registered in Barbados and have locally registered agent and registered office
- Have a minimum of 2 members and elect a manager annually
- Pay the annual license fee of US $425
- Locally file annual financial statements
- Provide audited statements where revenues and assets exceed US $1 million
