Cayman Islands vs. Barbados: Offshore Business Showdown
With their stunning landscapes and favorable business climates, the Caribbean islands of the Cayman Islands and Barbados are vying for the attention of entrepreneurs globally. We delve into the specifics to assess which destination might be the ideal fit for establishing an offshore business.
Chart: Comparing Business Essentials
|
Details Insights |
Cayman Islands (CEC) |
Barbados |
|
Time to Set Up a Business |
4-6 Weeks |
5 Business Days * |
|
Cost to Establish a Physical Presence |
Starts at USD $14,500 |
Approx. USD $1,500 |
|
IP Considerations |
British Common Law |
British Common Law |
|
Legal Considerations |
100% foreign ownership allowed; regulated under UK Overseas Law |
No restrictions on foreign ownership, pro-investment government ** |
|
Ease of Doing Business |
Ranked least complex jurisdiction in the world; efficient setup process |
Supportive environment for investment, streamlined online processes ** |
|
East of Travel |
Flights to 29 destinations, including a direct flight to Los Angeles. Served by 10 airlines. |
Flights to 27 destinations with direct service to Dusseldorf as the longest route. Served by 19 airlines. *** |
|
Population |
65,483; diverse international presence |
265,332; densely populated; vibrant urban areas **** |
|
Business Community Dynamics |
Close-knit community, regular networking events, diverse international presence |
Business-friendly, pro-investment government support ** |
|
Lifestyle |
Cosmopolitan Island-Lifestyle; high standard of living, education, healthcare |
High standard of living, cultural activities, local dining, excellent schools, health system ** |
|
Cost of Living |
High; however, offset by tax benefits |
Competitive tax regime, with incentives and concessions available ** |
*** FlightsFrom.com
**** CIA World Factbook - Barbados
***** Numbeo - Cost of Living Comparison
Taxation
The Cayman Islands offers a tax-neutral environment with no corporate, capital gains, or sales taxes, making it an appealing destination for fiscal efficiency. Conversely, Barbados general corporation tax rate is 9%, effective January 1, 2024. Approved small businesses earning revenue below US$1M are taxed at 5.5%.
Special Considerations
- Double Tax Treaties: Barbados has a comprehensive network, beneficial for entities in countries like Canada. The Cayman Islands, with a Tax Information Exchange Agreement (TIEA) with Canada, offers a 0% tax rate on repatriating funds, providing a potentially more favorable fiscal position.
|
Tax Type |
Cayman Islands (CEC) |
Barbados |
|
Corporate Tax |
0% |
9% |
|
Personal Income Tax |
0% |
Up to 28.5% |
|
Capital Gains Tax |
0% |
0% |
|
Sales Tax/VAT |
0% |
17.5% |
|
Withholding Tax |
0% |
0% on dividends |
|
Double Taxation Treaties |
None |
Extensive Network |
|
Special Tax Incentives |
The Cayman Islands Special Economic Zones operated by Cayman Enterprise City. |
Approved small businesses earning revenue below US$1M are taxed at 5.5%. |
Setting Up a Business
Barbados boasts a swift online incorporation process, capable of setting up a business in about 5 days. The Cayman Islands provide a detailed, guided setup process taking 4-6 weeks. Due to a tax favourable environment, the Cayman Islands has attracted top-tier service providers such as Maples, Walkers Global, Mourant, and the big four accounting firms, Deloitte, EY, KPMG, and PwC.
Intellectual Property and Legal Framework
Both jurisdictions uphold British Common Law, ensuring robust protection for your business's intellectual property. They both permit 100% foreign ownership, with Cayman Islands' law adding familiarity for those used to British legal systems.
Ease of Doing Business and Travel
The Cayman Islands are noted for their streamlined business setup and connectivity to major American cities. Barbados facilitates efficient business operations and offers extensive global connectivity through its well-equipped infrastructure.
Island Demographics and Business Community Dynamics
Barbados is a bustling hub with over 265,000 residents, supported by an investment-friendly government. The Cayman Islands, though smaller with 65,483 inhabitants, feature a global mix of over 130 nationalities. This diversity enriches a vibrant business community, making it particularly attractive for international networking and enterprises.
Special Economic Zones and Investment Incentives
The Cayman Islands stand out with Special Economic Zones (SEZs), offering significant tax relief and operational benefits. Barbados lacks SEZs, but does offer robust incentives for global businesses, underpinned by supportive government policies. Both locales are primed for global entrepreneurs seeking advantageous business environments.
Lifestyle
In the Cayman Islands, residents enjoy a luxurious lifestyle, complete with top-tier amenities, healthcare, education, restaurants, and leisure activities like beach outings and water sports. Barbados offers a blend of sophistication and local culture, rich in cultural activities, diverse cuisine, and excellent education and health facilities.
Safety
The Cayman Islands are celebrated for their safety and low crime rates, bolstered by proactive anti-corruption measures. Barbados maintains a generally safe environment, with crime mostly limited to minor incidents. Its governance, while stable, is perceived as somewhat lax in addressing corruption, though it doesn't overshadow the island's overall security.
Cost of Living
Both destinations face high living costs. The Cayman Islands offset these costs with no direct taxes, such as income or sales taxes. Barbados, featuring a lower cost of living index, offers an attractive tax regime with numerous incentives. These financial strategies make each island appealing, depending on individual and business financial goals.
The choice between the Cayman Islands and Barbados for setting up an offshore business hinges on specific priorities. Barbados appeals to those looking for a rapid setup and lower initial costs, while the Cayman Islands attract those desiring an efficient and luxurious business environment, complemented by a diverse international community. Each offers unique tax advantages, with the Cayman Islands further distinguishing itself with Special Economic Zones, which enhance both business prospects and quality of life.
Ready to Set Sail?
Discover the unique benefits of Cayman Enterprise City. With world-class facilities and a dynamic business community, the Cayman Islands not only promise significant business growth but also an unparalleled quality of life. Join us and elevate your business within our Special Economic Zones.
.jpg)
