Zero – tax jurisdiction in the Caribbean
The Bahamas is one of the most popular Caribbean tax havens. The banking sector is huge and has acquired an excellent reputation as a location for offshore banking. It is a stable financial and business centre regularly used by private individuals and corporate entities as a vantage point for their financial portfolio.
In 1492 Columbus landed in the "New World" on the Bahamian island called San Salvador. On 10th July 1973 The Bahamas achieved its independence, ending some 325 years of British rule. Today The Bahamas remain a member of the Commonwealth of Nations.
The Bahamas comprise of 700 islands, cays and islets scattered over 100,000 sq. miles of ocean, just 50 miles off the coast of Florida. It is an ecological oasis featuring 2000 breathtaking islands and cays.
Limited Liability Companies are incorporated under the Companies Act 1992 for local LLC and under the International Business Companies Act 2000 for international business companies. A domestic resident company limited by shares is incorporated under the Companies Act 1992 for carrying out local business. At least 2 directors are required. Annual returns of the company will include a list of the members and is kept in the public register. Bearer shares can be issued with exchange control permission. There is no requirement of filing financial statements.
International Business Companies is one of the most widely used business entity for offshore operations in The Bahamas. It normally takes the form of a private company limited by shares. IBCs are required to submit their identities, addresses and names of directors and owners to the Registrar General’s Department, since the beginning of 2001. IBC is formed under the IBC Act 1989 and does not carry out business with Bahamian residents.
IBC does not require business license and is exempt from business license fees. There is no fixed limit on the amount of authorised capital. Only one director who may be a corporate, and 2 shareholders are required. Shareholders, directors and officers need not be a resident in The Bahamas and there is no stipulation to their nationality. Shares must be registered and may be issued in any currency. Bearer shares are not permitted. No need to maintain accounts, even if it is maintained, there is no need of an audit.
Shareholders and directors meetings need not be held in The Bahamas and can be held over a phone communication. Memorandum and Articles of Association are the only documents held in Public record. An IBC can also be established for a limited duration. It is exempt from Bahamian Exchange Control, from stamp duty and from other taxes and estate duties for 20 years from the date of incorporation.
Branch or Representative Offices may conduct business in The Bahamas by registering under the Companies Act 1992. Follows minimal requirements and doesn’t require registration unless it is recognised as an “undertaking” or as a “trading” branch.
A non-resident intending to incorporate a new business in The Bahamas will require approval from the Bahamian Investment Authority. Publicly Trading Companies, Limited Liability Partnerships and Limited Liability Company are registered at the Registrar General Office where they receive their certificate of incorporation.
When the Registrar has, in respect of a foreign company, received all the required documents and the prescribed fees, the Registrar shall —
Segregated Account Companies (SAC) are commonly used by captive insurance and investment funds, a SAC is a company with a series of accounts with assets linked to one or more of the segregated accounts. An SAC must be incorporated under the Companies Act or the International Business Companies Act and then registered as an SAC by filing a request with the Company Registrar
Trusts, other than those holding Bahamian real estate, with non-resident beneficiaries are exempt from all taxes, including stamp duty on transfers into trust. The 1998 Act provides for the appointment of a 'protector of trust', effectively a supervisor of the trustee(s), and also managing and custodian trustees.
A company offering trust services must obtain a license under the Banks and Trust Companies Act 1965 and conform to various conditions.
Incorporation process usually takes about 7 to 14 working days in The Bahamas.
Non-Bahamians must meet a minimum capital investment of BS$ 500,000 and the proposed investment must not be in an area reserved for 100% Bahamian participation.
The legislation of an IBC contains asset protection clauses against actions emanating from without the Bahamas. Provisions are also available for protection of minority shareholders. IBCs are permitted to own shares in other Bahamian companies, maintain bank accounts in the jurisdiction and employ the services of local professionals.
Individuals and companies are given resident and non-resident status for exchange control purposes. Resident entities carry on business in the domestic market in Bahamian dollars, while non-resident entities can operate for the Bahamas but trade anywhere else in the world and in any currency except the Bahamian dollar.
The Bahamas have signed Tax Information Exchange Agreements (TIEAs) with about 30 countries.
All businesses must be licensed under the Business License bill 2010. This includes all businesses registered before the bill became law. Any individual who desires to incorporate a company in the Bahamas has to register the business.
Under the new Business License Amendment Act 2013, the following measures are taken, as of July 1st 2013.
To enter The Bahamas, citizens from countries other than the US and Canada are required to present a valid passport, which must be current up to your travel period and some countries are also required to have a Bahamas visa. If you are departing The Bahamas for a country that has the passport validity requirement of six (6) months beyond the dates of travel, then that requirement will be enforced. You must also have a return, or onward journey ticket, hotel confirmation (if staying at a hotel, or name and address of residence) and proof of funds to support your visit.
Non-Bahamian nationals, who are desirous of working and living in The Bahamas for a period greater than 90 days, must first be authorised to do so by way of a valid work permit or visa issued by the Department of Immigration. Individuals wishing to work for up to 90 days must apply for a short-term work permit or visa.
Documents required for submission: