Conditions in Respect of Companies with Subsidiaries/Affiliates Abroad

Conditions in Respect of Companies with Subsidiaries/Affiliates Abroad

The following conditions will apply to companies with Subsidiaries/Affiliates abroad with respect to borrowing by domestic companies with subsidiaries or affiliates abroad.

1. Companies must declare to the Central Bank, and repatriate to Barbados dividends derived from investments abroad, unless specific permission is given to retain or reinvest such earnings abroad.

2. If a borrower defaults on a loan guaranteed by the local company or affiliate, the latter must satisfy the guarantee call from funds derived, in the first instance, from foreign currency sources.

3. Companies must submit relevant documentation (ex post) to the Central Bank within thirty (30) days of the execution of the loan/guarantee transaction, confirming the authenticity of the investment and the terms of the loan, together with the latest audited financial statements of the investee company.

General Provisions

Residents of Barbados or CSME nationals wishing to borrow in foreign currency will require permission from the Central Bank of Barbados.

Authorised Dealers may not, without the prior approval of the Central Bank of Barbados, lend foreign currencies from foreign exchange accruing to Barbados, to residents of Barbados (other than another Authorised Dealer) for any purpose.  

Applications by residents of Barbados to borrow in any currency from non-residents except as stated in paragraph 8. It will be dealt with on a similar basis and the Authorised Dealers should forward their applications in duplicate to the Central Bank of Barbados with the information required as mentioned in paragraph 6. The type of currency and the source of funds should also be stated.

Without prior permission of the Central Bank of Barbados, authorised dealers may give and renew:

1. 1. Guarantees on behalf of non-residents, in the ordinary course of business in respect of missing documents, the authenticity of signatures, the release of goods on Trust Receipt.

2. 2. Bonds and other commitments on behalf of non-residents provided that full cover is held in foreign currency or in a foreign currency account.

Where Authorised Dealers have given or renewed guarantees, they are required to immediately advise the Central Bank of Barbados by furnishing of details of payment, along with the reference to the approval given by the Central Bank of Barbados.