Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Barbados. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Submit Request for Name Search and Name Reservation form to the Corporate Affairs and Intellectual Property office to reserve company name | 2 days | BDS 30 ($25 for reserving the name + $5 for electronic search) |
| 2 | Draft articles of association | 2 days | BDS 1500 |
| 3 | Submit application for business registration | 1 - 2 weeks | included in procedure 4 |
| * 4 | Pay the registration fees | 1 day (simultaneous with procedure 3) | BDS 750 |
| 5 | Register with the Inland Revenue Department for income tax payment | 2 days | no charge |
| * 6 | Register with the VAT division of the Customs and Excise Department | 2 days (simultaneous with previous procedure) | no charge |
| * 7 | Register with the National Insurance Scheme | 1 day (simultaneous with previous procedure) | no charge |
| * 8 | Make company seal | 1 day (simultaneous with previous procedure) | BDS 60 |
* Takes place simultaneously with another procedure.