Read about The Barbados Tourism Development Act. Pt.1

The Tourism Development Act 2002 replaces the Hotel Aids Act of 1956 and brings about significant expansions in investment incentives for the Tourism and Hospitality industry in Barbados. This new act offers incentives not only to the traditional accommodations sector, but also to restaurants, recreational facilities and services, attraction development that highlights the island’s natural, historic, and cultural heritage, and construction of properties in non-coastal areas. Additionally, the Act provides for investors in tourism projects to enjoy capital expenditure write-offs and 150% interest, as well as exemptions from import duty, value added tax, and environmental levy for furniture, fixtures and equipment, building materials, supplies, and equity financing.

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The Tourism Development Act offers incentives and concessions to projects falling under the following categories:

Construction, alteration, or renovation of hotels, including the conversion of buildings into hotels
Furnishing and equipping of buildings intended for use as hotels
Provision of tourist recreational facilities and related services
Construction, alteration, or renovation of restaurants
Construction, alteration, or renovation of attractions
Restoration, preservation, and conservation of natural sites
Construction and furnishing of villas and timeshare properties
Addition of facilities or services to existing tourism products to enhance amenities

Companies engaged in the construction, financing, and operation of hotels, attractions, and tourism-related services are eligible for various incentives. Legislation also provides incentives for companies in financial services, information technology, and manufacturing. Double Taxation Treaties have been established with several countries, including the USA, Canada, and China, while Bilateral Investment Protection Treaties have been signed with Italy, Germany, and other countries. These incentives and treaties make Barbados an attractive destination for foreign investors.

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Approval and Application Procedure in Three Steps

Upon receiving an application for the development or operation of a tourism product, the Minister of Tourism has 90 days to notify the applicant of the approval or refusal of the application or request additional information in writing.

If the tourism project is deemed practical and beneficial to the development of tourism, a three-stage authorization process may be granted, which includes:

Interim Approval based on the information submitted with the application or in response to a request for additional information;
Final Approval based on the completed product that includes any changes that occurred during project construction; and
License issuance to the Applicant once the Minister is satisfied that all relevant procedures, requirements, and laws have been met and the tourism product is in a suitable form to commence operations.

Scope of Concessions:

The Tourism Development Act permits the grant of Customs Duty or Income Tax concessions for the following:

Duty-free importation (including waivers of Value Added Tax (VAT) and Environmental Levy) of building materials and equipment during construction and rehabilitation;
Duty-free importation (including waivers of Value Added Tax (VAT) and Environmental Levy) of supplies for refurbishment of hotels, restaurants, villas, and sports and recreation facilities for tourism purposes;
Extended tax holidays/write-off of capital expenditure and accelerated write-off of interest;
Employee training;
Marketing.

A project approved under the Tourism Development Act cannot be granted concessions simultaneously under the Shipping Incentives Act or the Special Development Areas Act.

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