VII. Investment Climate

Investment Practices:

Foreign direct investment in Barbados has taken place in most of the
areas of activity in which private individuals (as opposed to
Government) are allowed to invest.  Foreign investors may not invest in
certain areas of activity, subject to the discretion of the Government.
Barbados welcomes foreign investment in areas which do not compete
with local investment.  Foreign investment should be registered with the
Central Bank so that profits and capital may be freely repatriated.

Currency Conversion and Transfer

The Central Bank of Barbados administers exchange control regulations
under the Exchange Control Act.  Individuals may convert the equivalent
of U.S. $2,500 per year without special permission if they are traveling
outside the country by applying to a local bank.  Amounts in excess of
U.S. $2,500 may be obtained upon application to the Central Bank.
Profits and capital from foreign direct investment usually may be
repatriated if the investment was registered with the Bank at the time
the investment was made.  The Central Bank may limit or delay
conversions depending on the level of international reserves under the
Bank's control.

Investment Incentives:

Incentives for manufacturing are available under The Fiscal Incentives
Act (1974), which does not discriminate between foreign and national
ownership.  Any manufacturer may qualify for a maximum 10-year tax
holiday by satisfying a value-added criterion or as a so-called "enclave"
(International Business Company) that, by definition, exports 100
percent of its output.

Under Section 14A of the Income Tax Act, any manufacturing company in
Barbados can enjoy tax reductions which are based on the percentage of
its profits derived from export income.  Again, no distinction is made
between locally- and foreign-owned companies.  The scale is as follows:

Export Profits                               Effective Rate
as % of Total Profits                        of Taxation

Up to 20 percent                             26.0 percent
More than 20 and up to 40 percent            22.0 percent
More than 40 and up to 60 percent            14.4 percent
More than 60 and up to 80 percent             8.4 percent
Above 80 percent                              2.8 percent

An International Business Company, which must by the terms of its
incorporation export 100 percent of its manufacture, enjoys an even
more-advantageous tax structure;  the rate of tax is as follows:

For gains and profits up to $10 million       2.5 percent
More than $10 million and up to $20 million   2.0 percent
More than $20 million and up to $30 million   1.5 percent
More than $30 million                         1.0 percent

An IBC is entitled to import into Barbados machinery and equipment free
from certain taxes and duties.  An IBC also enjoys exemption from
Withholding Tax and Transfer Tax on the transfer of its assets.  An IBC
also may effect certain foreign exchange transactions for which other
types of companies would need permission from the Central Bank of
Barbados which administers the Exchange Control regulations.

The Training Grant Scheme, which makes modest reimbursements toward
training costs at the time of company start-up, is similarly to both
locally- and foreign-owned companies.  The Barbados Investment and
Development Corporation (BIDC) administers this program.

The BIDC administers two programs that do discriminate against foreign
investment.  One is an Export Grant and Incentive Scheme, which helps
locally-owned companies defray export costs such as the preparation
and shipment of samples, the development of marketing materials, the
cost of booths at international expositions, and the sponsorship of trade
missions.  The second is a Technical Assistance Program under which
technical consultants can be provided to help companies solve a range of
problems.  Local small businesses can also use the services of the BIDC's
Small Business Development Centre, which offers conference room
facilities, communications services, short-term office space, and access
to a commercial library, among other services.

Expropriation and Compensation:

Like most governments, the Government of Barbados reserves the right
to compulsorily acquire property for public uses, but the Embassy is not
aware of any disputes involving the Government's exercising this right.

Dispute Settlement:

The United States and Barbados are both parties to the General
Agreement on Tariffs and Trade, under which disputes involving that
agreement may be subject to dispute resolution by an arbitral panel.
There is no forum available to private disputants, other than courts of
appropriate jurisdiction in both countries.  Barbadian law is based on
the British "common law" system.  Barbados is a member of the
International Center for the Settlement of Investment Disputes (ICSID,
also known as the Washington Convention).  However, Barbados has not
yet ratified the New York Convention (1958) on the Negotiation and
Enforcement of Foreign Arbitral Awards, although the New York
Convention's provisions have been written into Barbados' domestic law.

Political Violence:

Political violence is unknown in Barbados.

Performance requirements and incentives:

Other than reductions on income tax rates for exporting manufacturers,
there are no performance requirements or incentives in Barbados.

Right to Private Ownership and Establishment:

Foreign investment is subject to the approval of the Government
(normally, the Minister of Trade or the Minister of Finance).  Please refer
to sections on franchises and on investment practices.

Protection of Property Rights:

Liens can be placed on property, including chattel property; mortgage
claims can be pursued in court.

Bilateral Investment Arrangements:

Barbados has not signed bilateral investment arrangements with any
country.

Major U.S. Investors:
[List may not be complete]

American Airlines
ANCO Caribbean, Inc. (joint venture)
Atlantic Manufacturing
Barbados Children's Wear
Barbados Flight Kitchen Ltd. (joint venture)
Bondhus Corp.
Caribbean Cabinets (joint venture)
Caribbean Data Services Ltd.
Caribbean Electronics Mfg.
Charles T. Gamble Industries
Cirrus Logic
Clifford Electronics (joint venture)
David Seaham Associates
Donnelley Caribbean Graphics
Doyle Offshore Sails (joint venture)
Ecolab Barbados Ltd. (joint venture)
EDI (Barbados) Inc.
Galt Controls Inc.
Gas Products Ltd.
IRC Barbados Ltd.
Island Furniture Ltd. (joint venture)
McCann-Erickson Ltd.
N A L Data Services Ltd.
NDL International (B'dos) Ltd.
Offshore Keyboarding