The Bahamas

The Bahamas

A Tax Haven Jurisdiction – Generally suitable for holding and passive activities and as part of a tax planning structure

Synopsis

An independent sovereign state having gained independence from the United Kingdom in 1973. The Bahamas benefits from excellent efficiency, English speaking with very good air and sea communications with the United States. It has not suffered to the same extent as the Cayman Islands from financial scandals. No corporate or individual taxation for residents. Significant ship and yacht registrations with a well run Registry. There is a growing banking and insurance sector but it has a very limited direct tax treaty network.

Star Ratings

Corporate registration efficiency

5

Cost

4

Confidentiality

4

Local Banking facilities

4

Legal system

5

Political stability

5

Reputation

4

bahamas

Location

The Commonwealth of the Bahamas is a 100,000 square mile archipelago of approximately 700 sub tropical islands and 2,000 cays situated just 62 miles south east of Florida.

Relationship with the UK

The Bahamas are now fully independent from the United Kingdom but are still members of the 'British' Commonwealth. Today, the relationship with the United States, both politically and financially, is far more important. The Bahamian dollar is at parity with the U.S. Dollar.

Advantages of a Bahamian international business corporation (IBC)

Under Act 2/1990, the Bahamas introduced IBC legislation very similar to that of the British Virgin Islands. The legislation effectively sought to codify and guarantee the rights, principally that of being tax free, for those wishing to establish an IBC company.

The Benefits of a Bahamian IBC Company

IBC companies need only pay registration and annual license/franchise fees. It is important to note that the Bahamas since 1717 has never imposed either individual or corporate taxes. IBC companies operating from the Bahamas (using local directors and/or serviced office facilities) are totally tax exempt

The SCF Group provides a wide range of tax planning services both for successful individuals, their families and of course their companies. The services are very comprehensive and include but are not limited to the provision of:

Bahamian law guarantees this exempt status for a period of 20 years from the date of registration. Where the Bahamas is used as a 'Command Centre' and/or a non IBC company has business activities in the Bahamas, an annual business license fee will be charged varying between US$1.00 and US$180,000.00. The latter only applying where there is a turnover of US$5,000,000.00, or more. The above does not apply to banks and insurance companies which are covered by separate legislation.

There are no minimum issued share capital requirements; however, the maximum share capital is automatically stated as US$5,000.00. Issued share capital over this amount will result in a non standard annual franchise fee. Annual franchise fees operate on a sliding scale

  • An IBC is required to have a registered agent and office in the Bahamas. In most cases, nominee directors will also be employed to allow anonymity to be maintained when dealing with third parties. Otherwise, it may be necessary for an ultimate beneficial owner to reveal his or her identity.
  • Both registered and bearer shares can be issued.
  • A company will normally have two, or more, shareholders.
  • Only one director is required. A company may serve as director.
  • There are no nationality requirements for either directors or shareholders.
  • Annual general meetings must be held but can take place in any jurisdiction and may even be concluded by means of a conference telephone call.
  • Directors have the power to protect the assets of the company by transferring them to trustees, another company or other legal entities for the benefit of the 1BC, its beneficial owner(s) and/or creditor(s).
  • The register of members must be maintained at the registered office of the company in the Bahamas
  • No accounts or annual summaries have to be filed with the Government, with the exception of the annual franchise tax to be completed and filed by the registered agent
  • A company incorporated outside of the Bahamas may be re-domiciled in the Bahamas under the 'Continuation' Principal

Domestic Corporate Tax

Not applicable

Personal Tax

The Bahamas does not impose income, capital gains, gift or inheritance tax on individuals. Locally based companies not covered by the IBC legislation are liable to pay , with the exception of banking and insurance companies, an annual license fee based on the undertakings annual turnover. In real terms, such taxes are unlikely even for high turnover firms to exceed 3-4% of gross profits. Banking and insurance firms will normally pay even less than the above.

Administration & Accountancy Services

Managed & Non-Managed Companies

The SCF Group can provide Bahamian companies either in a non-managed or managed format. However, in general like all 'international business corporation' (IBC) jurisdictions Bahamian companies are generally used for 'holding' or low level consultancy purposes so full management services are not common, especially as the Bahamas has limited tax treaty protection. However, virtually all Bahamian companies avail of our administration services from a convenient tax free location or sub-contracted out provider to ensure that corporate activities are separate from those of the beneficial owner

Fully Managed & Branch Registration

Where required SCF can provide fully managed services and even branch registration in another jurisdiction where tax treaty protection is required. For further details please consult with a SCF sales office

Set-Up & Annual Maintenance Fees

Please request the separate the Bahamas Quotation Leaflet

The Ownership of Bahamian Companies

'Overhead' Discretionary Trusts or Private Interest Foundations

For tax planning reasons, normally pertaining to anti-avoidance provisions in a beneficial owners 'home' country or place of fiscal residence, and/or because of a need to 'ring fence' IBC assets many clients owning a Bahamian company select to have it owned not be themselves but by an overhead discretionary trust or a Jersey Private Interest Foundation, Seychelles Private Interest Foundation or a Liechtenstein Private Interest Foundation (locally known as a Stiftung).

For more information on discretionary trusts and/or private interest foundations please refer to the trust and private interest foundation sections.