Barbados is a well-known place for its beautiful beaches, friendly residents and culinary experiences. In addition to being one of the most sought-after tourist destinations, Barbados has become one of the safest countries to work, especially in light of the pandemic plaguing many countries throughout the world. With a population size of approximately 287,000, the small island spanning 166 square miles, with only 253 confirmed cases, 5 active cases, 7 deaths and 43,420 tests, as of 19 November 2020, has been applauded by the World Health Organization (WHO) and a number of world leaders on the management of the pandemic.
As most would know, Barbados’ main economic contributor is tourism and with COVID-19 essentially dampening the tourism and airline industries, the island like most other countries suffered from a significant increase in unemployment. This, coupled with the need for Barbados to generate economic activity, led to the Government of Barbados introducing the Remote Employment Act, 2020-23 to give effect to the Barbados Welcome Stamp.
The Welcome Stamp not only allows non-Barbadian citizens (and their dependents) working for non-Barbadian entities, the opportunity to live and work remotely from Barbados for up to 12 months, it also helps the island economically and socially.
The attractiveness of this initiative is dependent on its key features, mainly simplicity of the immigration process, quality of life and certainty of tax status for both employers and employees.
Simplicity of Immigration Process
Welcome Stamp holders are issued with a permit for a period of 12 months, and thereafter on a case by case basis. To be eligible for the initiative, applicants must provide:
- passport sized photograph
- bio data page of passport
- proof of relationship of dependents
- proof of annual income over US$50,000
The process is governed by the Immigration Department and usually takes a couple of days to obtain approval. The applicants are required to pay the application fee and the Welcome Stamp is issued. While the process is simple, all individuals arriving on the island must meet the COVID-19 travel protocols to maintain a safe environment for both visitors and nationals of the island. Individuals arriving from High and Medium Risk countries must present a negative COVID-19 PCR test and are kept in quarantine for a period of 5 days until results of the second negative test are confirmed. Accommodation is provided by the Government at no cost, or visitors may select one of the 12 designated hotels at reasonable rates.
Quality of Life
Barbados has a welcoming culture, stunning weather, educated population, good infrastructure, sophisticated healthcare and beautiful attractions, all of which are features that result in the high quality of life in Barbados. In an article entitled, ‘Digital nomads living in Barbados share what it’s like to work remotely in paradise during the pandemic’, by Rachel Hosie, one Welcome Stamp holder indicated that, “I’m always struck by how nice people are here ... also, some beaches have wi-fi and that is a real game changer. I’ve been able to set up my hammock a few times, go for a dip, then carry on working from there.”
Barbados, like most other countries, has a physical presence threshold test whereby individuals on-island for more than 183 days are deemed resident for tax purposes. Such individuals are normally taxed at a maximum rate of 28.5% and are eligible for a foreign currency earnings credit on any foreign income remitted to Barbados that can effectively reduce their tax rate to 10%. Additionally, employers with employees working on-island are usually deemed to be undertaking business in Barbados. However, Welcome Stamp holders and their employers are excluded from any personal or corporate tax obligations/filings. The initiative should not have any international tax repercussions as holders deemed non-residents would not be eligible for treaty benefits.
The Future Ahead
With over 2,800 applicants, predominately from the USA, UK and Canada, submitted in the first few months of the initiative, hoteliers, guest house owners and restaurants have seen a slow to moderate increase in business. There has also been some relief in the number of persons filing for unemployment from the hospitality sector as businesses in this sector resumed operations. One charitable organization has also commented on the increase in donations received from holders of the Welcome Stamp.
It is expected that there will be a further increase in Welcome Stamp holders as the second wave of COVID-19 cases plagues Europe and the Americas. The months ahead promise to pose many challenges for a number of locations, as developed countries race for a cure and/or vaccine against COVID-19.
Until then, Barbados remains a safe place for nationals and non-nationals to work and be productive, whether working by the beach or in the office.