IBCs are governed by the International Business Companies Act, 1991 as amended by the International Business (Miscellaneous Provisions) Act, 2001-29. An international business company does not qualify for a licence unless it is resident in Barbados, and satisfies the Minister that it is financially capable of carrying on the business of international manufacturing or international trade or commerce and complying with other prescribed conditions. An IBC cannot engage in trading or business unless it holds the necessary licence, valid until the 31st December in the year in which the licence was granted, from the Ministry of Economic Development.

There are many advantages of forming an IBC, but IBCs primarily enjoy a separate income tax regime: on annual profits up to $10,000,000 Barbados dollars the rate is 2.5 per cent. Also specially qualified persons enjoy  tax concessions.