The US is cracking down on fake offshore businesses. I have a number of friends who have been moved by their employers to Luxembourg, for example, so that they can demonstrate they actually have a headquarters in Luxembourg.
Also, the scenario you describe defers taxes, but doesn’t necessarily eliminate them. If/when the dollars that build up in Barbados ever move back to the US, there should be a repatriation tax on them. It’s important, however, that the government remain vigilant in keeping repatriation tax consistent and not give in (like Congress did in 2004) to lobbyists pushing for repatriation holidays.
