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Societies with Restricted Liability

A society with restricted liability (“SRL”) is established pursuant under the Societies with Restricted Liability Act (the “SRL Act”). An SRL is similar to a limited liability company in the U.S. and may be treated as a flow-through entity for U.S. tax purposes. The SRL Act provides for the creation of both domestic and international SRLs.

International SRLs are designed for use in international transactions and are entitled to preferential tax treatment and are taxed on a sliding basis from 2.5% to 1%. International SRLs are exempt from all withholding taxes and there is no capital gains tax or estate duty. Further, they are entitled to a tax credit in respect of taxes paid outside of Barbados, subject to a minimum tax payable in Barbados to a minimum of 1%. A domestic SRL is not entitled to preferential tax treatment and is taxed at a rate of 25%.

An international SRL may not acquire or hold land in Barbados, other than land required for its business held by way of lease or a tenancy agreement nor can an international SRL transact business with any Barbados residents.

International SRLs can be used as a holding entity – an entity which holds investments in foreign subsidiaries of the parent company, a group finance entity, a property holding entity or an intellectual property holding and licensing entity.

International SRLs are required to be licensed by the Ministry of International Business and International Transport. An initial licence will be granted for a fee of US$375 and the licence must be renewed annually for the same fee. The Ministry will carry out a due diligence review of the managers, quotaholders and ultimate beneficial owners of the SRL in order to process the licence application.

You can consult the PDF pamphlet here.