Bahamas Companies, Foundations and Trusts

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General Introductory and Offshore Tax Information

Bahamas offshore business entities are trusted as mechanisms for commercial operations by people all over the globe. Offshore business entities in Bahamas are multipurpose, help create wealth and assure a brighter future through their usage as estate and tax management vehicles.

In March 2009, the Bahamas Financial Services Board (BFSB) and the government supported the OECD’s new arrangements for transparency and exchange of information regarding Bahamas offshore business entities, offshore accounts and other financial matters. The Bahamas however gave its commitment and required that as a haven for Bahamas offshore business entities, its respect for customer confidentiality was honored. Legislation for Bahamas offshore business entities will continue to protect the privacy of clients and will deny requests that are not within arrangements and procedures that were agreed upon, or do not provide adequate evidence to support an information request or the right safeguards for any information given.

The Bahamas levies no withholding tax on dividends or interests, no capital gains tax, no estate, succession or inheritance tax, no tax on income or duties, no stamp duties and no exchange controls for Bahamas offshore business entities.

All Bahamas offshore business entities are to pay an annual fee as prescribed by their respective laws.

Bahamas Offshore Business Entities

  • Bahamas External Insurance
  • Bahamas Exempted Limited Partnership
  • Bahamas International Business Companies
  • Bahamas Banks and Trusts
  • Bahamas Foundations

Bahamas External Insurance

Key Features:

  • As a Bahamas offshore business entity, The Bahamas external insurance companies serve only non-residents
  • The External Insurance Act was enacted in 1983
  • Bahamas external insurances are the same as Bahamas insurance offshore business entities
  • Bahamas insurance offshore business entities protect against risks only outside The Bahamas
  • A Substantial amount of the value of risks underwritten by Bahamas insurance offshore business entity involves risks of an affiliated company, given that long term insurance business is external insurance regardless of the value of underwritten risks of an unaffiliated company
  • Bahamas external insurance companies must appoint a licenced Bahamian Captive Manager
  • The minimum paid-up share capital of a Bahamas insurance offshore business entity engaged in long-term insurance or functioning as a mutual company is USD 200,000
  • A minimum paid-up share capital of USD100,000 is required for a Bahamas insurance offshore entity engaged in non long-term insurance business
  • External insurance companies enjoy a 15 year tax free period

Bahamas Exempted Limited Partnership

Exempted Limited Partnership

  • Bahamas exempted limited partnerships were introduced in March 1995 under the Exempted Limited Partnership Act
  • A Bahamas exempted limited partnerships as an offshore business entity is used for trade outside The Bahamas
  • As a Bahamas offshore business entity may not trade with local residents (without relevant licence)
  • All Bahamas exempted limited partnerships have a registered office in The Bahamas
  • Limited and general partners may be established, registered or resident locally or abroad provide that in case of an individual, be residing in The Bahamas and a company, be registered under the relevant company act.
  • All Bahamas offshore partnerships are required to pay annual registration fees

Bahamas International Business Companies

Legal forms a Bahamas IBC may take:

  • Company Limited by Shares
  • Company Limited by Guarantee
  • Unlimited Liability Company

Features:

  • As a Bahamas offshore business entity, an IBC may be limited both by shares and guarantee
  • Every Bahamas IBCs has a registered agent in The Bahamas
  • The International Business Companies Act 1992 (with 1993, 1994, 1995 amendments) regulates Bahamas offshore business companies (IBCs)
  • A Bahamas IBC may not provide services to local residents
  • Bahamas IBCs may only be incorporated by a bank or trust company licensed under the Trust Companies Regulation Act, 2000 or person licenced under the Financial and Corporate Service Providers Act, 2000
  • A Bahamas IBC may register as a Limited Duration Company (details below)
  • Two or more companies may merge or consolidate
  • A company incorporated outside The Bahamas may continue into The Bahamas as a Business offshore company (IBC)
  • Bahamas IBCs have a tax free period for duration of 20 years
  • Annual fees required on or before January 1st

Bahamas IBC registered as a Limited Duration Company

  • At least 2 subscribers or members
  • Limited duration of 30 years if not incorporated as an IBC
  • Name ends with words “Limited Duration Company” or LDC

Bahamas Banks and Trusts

Features:

  • Bahamas banks and trust companies both offshore and onshore are regulated under various acts, some of which include the Trustee Act 1998; Trusts (Choice of Governing Law); Banks and Trusts Companies Regulation (2000, 2001)
  • Bahamas offshore banks and trusts as Bahamas offshore business entities are required to appoint an authorized agent
  • A Bahamas offshore bank and trust company has a principal office in The Bahamas
  • All Bahamas offshore banks and trusts are required to meet necessary capitalization standards
  • Shareholder dividends are to be paid out of profits and not from the subscribed capital

Bahamas Foreign Company

Features

  • A foreign company may be registered as a Bahamas IBC once necessary standards are met
  • A Bahamas foreign company is required to be registered with the Registrar-General if operating as a trading branch or identified as an ‘undertaking’ by the Companies Act 1992
  • Ordinary foreign company may own a branch within The Bahamas
  • Requires necessary licence from the Bahamas Investment Authority to be able to carry out business locally
  • A Bahamas foreign company with ‘undertaking’ status is required to hold a licence for certain activities, maintain telephone listing and maintain regular place of business

Taxation and fees:

  • Required to pay necessary fees and taxes where applicable
  • Though may not be a Bahamas offshore business entity can enjoy exemptions as prescribed under the law
  • For a foreign company registered as a Bahamas offshore business entity

Bahamas Foundations

Features:

  • The Foundations Act 2004 governs both onshore and offshore foundations in The Bahamas
  • As a Bahamas offshore business entity a Bahamas foundation name may be reserved for 90 days
  • No perpetuity rules apply to the Bahamas foundation
  • A Bahamas foundation is an independent, separate legal entity
  • Foundations formed abroad may redomicile to The Bahamas
  • As a Bahamas offshore business entity an external audit not required unless stated in charter of a Bahamas foundation
  • Registration fees are applicable and vary according to quarter in which foundation was registered

Segregated Accounts Company

Features:

  • A Bahamas offshore business entity may function as a Bahamas segregated accounts company as provided for under the IBC Act
  • The Segregated Accounts Companies Act was introduced in 2004
  • As a Bahamas offshore business entity or not, segregated accounts companies must hold assets related to a segregated accounts as separate fund from the company’s general account
  • Segregated accounts must be for benefit of their owners
  • Assets of a general account may not be used for covering the liabilities of a segregated account
  • Segregated required to record all assets held in its general account
  • Required to pay necessary fees and taxes where applicable
  • Though may not be a Bahamas offshore business entity can enjoy exemptions as prescribed under the law
  • For a segregated accounts company registered as a Bahamas offshore business entity
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