Sugar and rum are the two products manufactured in Barbados which together earn the island's most foreign exchange.
Provisional Barbados Central Bank figures for the first eight months of 2007 show that the two combined accounted for about a quarter of the BDS$336.9 million dollars in export income. Rum brought in $43.8 million and sugar $37.3 million.
Manufacturing in Barbados centres mainly on light industry. This includes the production of cement and its by-products, clay tiles, garments and textiles, paint, paper products, poultry, furniture, electronic components, chemicals, edible oils, soap and food products.
Manufacturing enterprises involved in the production of an "approved product" are entitled to special incentives under the Barbados government's Fiscal Incentives Act, on approval of their application to the ministry responsible for industry.
Tax holidays are granted according to the percentage of local value added to the item being produced. Enterprises considered highly capital intensive with an investment of US$25m or higher may be eligible for up to 15 years tax holiday.
Companies involved in manufacturing exclusively for export outside of the Caribbean Community (CARICOM) can qualify for benefits as an International Business Company (IBC). These benefits include a tax rate ranging from one per cent to a maximum of 2.5%. In addition to the low tax rates, the benefits include exemption from exchange controls and the duty free import of plant machinery, equipment and raw materials used in the production process.
The IBC regime has been particularly attractive to investors from Canada, with which Barbados has a comprehensive double taxation treaty. For these Canadian-owned operations, dividends paid out of the active business income of a foreign affiliate operating in Barbados are fully deductible in the determination of the taxable income of a recipient Canadian resident corporation.
The Barbados Manufacturers' Association (BMA), established back in 1964, is the umbrella body representing local companies involved in the production of goods and services on the island. It plays a pivotal role in the development of the island's manufacturing sector.
The association does a great deal to represent its members and their collective interests. At the same time, it aims to assist in the growth of the Barbadian economy.
Annually the BMA mounts the island's largest international trade exhibition, which gives companies - local and Caribbean - an opportunity to showcase their goods to the public.
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