International Business Company

Recent statistics show there are over 36,000 Bahamas registered offshore companies. Offshore company incorporation, a plank for economic development, kicked off in 1989 with the passage of the first legislative act under which provisions were made for forming offshore companies. This laid the foundation for a the expansion of a successful financial services an offshore sector, which today is comparable to offshore centres of highly developed countries with far more resources than that of The Bahamas. Notwithstanding the positive attributes of a Bahamas offshore company as it relates to structure, a greater ability to compete on international markets and tax benefits, The Bahamas is ideally located. This translates into easier trade, the ability to establish a physical presence in The Bahamas in the event that a offshore company were to be transformed into a local company and quicker access to offshore bank accounts if held in The Bahamas, as traveling next door to check on personal affairs is way simpler and cheaper than heading off to Europe. Offshore companies incorporated in The Bahamas are relieved from exchange control and all local direct taxes and must be established by no less than two subscribers. Someone must be made director of the company.

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International Banking

Banking in the Bahamas is ranked number ten internationally among a list of banking giants such as the United States, Switzerland and the United Kingdom, with assets calculated at over US $200 billion, and a capital to asset ratio which averages at about 11.0%. Three major bank associations in The Bahamas were established to ensure that domestic and offshore banking activities within The Bahamas are regulated, supervised and conducted in accordance with international and domestic requirements. Two of these institutions include The Central Bank of The Bahamas and the Association of International Banks and Trust Companies which work closely with the Basle Committee on Banking Supervision.

Shipping registry

To be registered in the shipping registry of The Bahamas, a vessel must weigh at least 1600 tons, solely conduct ‘foreign going trade’ and not be in use for more than 12 years. Vessels registered in The Bahamas are not liable to any direct taxes, and capital gains which may arise from the sale of any vessel. The owners of small vessels are given reduced fees and tariffs, while exemption from stamp taxes for documents and customs duties are given as incentives to vessels over 150 GRT and are foreign owned even if calls are not made at the ports in The Bahamas.

External Insurance

External insurance refers to insurance business whereby insurance business undertaken is no lower than a significant amount of the value of the risks underwritten represents risks of an affiliated company. However, business is required to be external insurance business regardless of the value of underwritten risks belonging to an affiliated company. External insurance companies enjoy a 15 year exemption from direct tax, duties and fees, with the exception of those stipulated by the relevant legal provisions.

International / Offshore Trusts

The Bahamas has established a comprehensive trusts law which sets the general guidelines for all Bahamian trusts. Of note however, is that Bahamian trusts are distinguished as either resident trusts based on whether the assets held are situated within the Bahamas by local residents, or, nonresident (offshore) if those assets are situated in a foreign jurisdiction and owned by people or companies that do not reside in The Bahamas. Distinguishing between resident and nonresident or offshore trusts is important for exchange control purposes as any local resident who owns a trust with assets situate in The Bahamas would be subject to exchange controls. Bahamas offshore trusts fall into three main categories, namely, testamentary, charity and ordinary trusts, and are formed accordingly depending on the founder’s desires. Meanwhile, an ordinary trust can be irrevocable, discretionary and non-discretionary and is normally set up for asset protection, while on the other hand, a trust for charity reasons has the benefit of not having a perpetuity period, which usually lasts about 80 years.

Like Bahamian trusts, foundations are designated resident or non-resident. A Bahamas foundation must keep a registered office where all relevant documents as prescribed by law are kept. These include copies of the foundation’s articles and charter documents, details of the names and address of the council or supervisory body and name and address of the founder including the Bahamas address.

Exempted limited partnership

Exempted limited partnerships in The Bahamas are created to conduct any lawful activity in or outside The Bahamas. A Bahamas exempted limited partnership is not allowed to do business with residents of The Bahamas, except in cases such as banking, which is deemed necessary for effectively conducting business outside The Bahamas.
The international or offshore business sector is closely tied with the captive market, which is not as developed as the offshore company sector but has shown positive and steady growth. Offshore captive companies were incorporated by American companies as insurance subsidiaries in The Bahamas since in the 1960s for the purpose of insuring the risks of the subsidiary or parent companies. In 1985, the value of premiums written foreign risks in The Bahamas was calculated at $121 million. Offshore insurance services in The Bahamas are provided by a number of trained professionals which include trust companies and underwriting managers.