Directors

We often recommend that a company should consist of a board with locally based directors. If this is not possible, then at least a clear majority of the directors of the company should be local resident persons. If a majority of directors are however overseas in another country because of reasons of convenience (e.g. time zone), then it would be pertinent that they are not in the same country so that the domicile of the relevant company remains where it was intended to be. Further, if there is an overseas director, it is best that they are not appointed as chairman of the board as often the chairman will have a casting vote or some overall authority which should not be brought overseas. It should also be noted that there are usually no specific rules under any law in relation to these general principles and therefore the approaches taken by tax authorities are on a case-by-case basis, and very much dependent on other factors as further discussed below. 

Board Meetings

In general, the number of board meetings should be at the very least four per year to give any sense of actual commercial work being carried out. For holding companies receiving dividends or capital gains from its holdings, we anticipate that annual physical meetings should be sufficient. It is recommended that the agenda and minutes for the board meetings are prepared and distributed from Barbados and should not be prepared under the direction of an overseas person or director. ​

It is important that board meetings are convened in Barbados and that they are a genuine forum for discussion. In general, the types of discussions and decisions the directors should make include, but are not limited to, the following: 

• The declaration of dividends; 

• The approval of accounts; 

• The appointment of a director, banker, auditor, advisors, agents and if relevant, senior employees; 

• The company’s strategy and a review of financial performance, including clientele (in the case of the hedge fund industry, typically therefore the fund, or other managed accounts); 

• The review of and entry into substantial transactions – including but not limited to reviewing negotiation, funding, final approval of documents, authorising execution of documents and reviewing profitability of the relevant transaction; 

• The disposal of assets; and 

• The repayment of borrowings at the end of a transaction. 

Each director should be furnished with all the relevant materials to reach an informed decision on the business to be discussed at the meeting. If there are overseas directors, information (such as invoices from a service provider) must not be sent to their overseas addresses and cannot exclusively be provided to them as this may confirm to tax authorities as evidence of control being exercised by the overseas directors over the other directors irrespective of whether the overseas directors are in the minority. 

The meetings' discussions should be recorded as minutes in as much detail as possible, with supporting evidence of any discussions and decisions.