The Bahamas Background

The Bahamas IBC Act 2000, as amended on 7 September 2001, 11 August 2004 and 22 October 2004

Introduction

The Bahamas are a former British colony which gained independence in 1973, although they have had their own parliament for over 260 years as an independent member of the British Commonwealth. The Bahamas comprise over 700 islands in the Caribbean Sea to the southeast of Florida. Since independence, the Bahamas have enjoyed a stable democratic government.

In the same time zone as New York, the Bahamas are less than an hour by air from Miami and are directly accessible from a number of other major cities. The islands, with their tropical climate, attract millions of visitors each year.

Law and Taxation

The corporate law is governed by the International Business Companies (IBC) Act, which was originally introduced in 1990 and modelled on the British Virgin Islands' (BVI) IBC Act. It was revised in 2000 and further amended in September 2001, August 2004 and October 2004. The IBC Act requires the filing of a Register of Directors and Officers with the Companies Registry for placing on public record. The annual government fee is US$350 for authorised capital of US$50,000 or below, and US$1,000 for authorised capital above US$50,000.

In addition, the Bahamas IBC Act provides for the establishment of special purpose vehicles (SPV), such as Limited Duration Companies. The Bahamas has no tax treaties at present.

Corporate Requirements

Each Bahamas Company must have a Registered Agent and Registered Office in the Bahamas, provided by a licensed service provider.

Each company must have one director and corporate directors are permitted. A copy of the Register of Directors and Officers must be filed with the Bahamas Registrar of Companies within twelve months of the appointment and the original kept at the Registered Office in the Bahamas. A notice of a change in the directors and officers must also be filed with the Registrar within twelve months after such change occurs.

The company should have at least one shareholder and bearer shares are no longer allowed. Details of the beneficial owner must be disclosed to the registered agent, but are not on public record.

There are no requirements to file annual returns or audited accounts.

Local Infrastructure

Given its proximity to the United States of America, it is not surprising that the Bahamas are a popular tourist destination as well as a convenient offshore financial centre. Telecommunications are excellent, with direct dialling by phone or by fax to almost every country in the world. Flying in or out of the Bahamas is also convenient.

The Bahamas are a major offshore banking centre with over 400 banks present and holding in excess of US$390 billion in deposits. There are also numerous legal and accounting firms and a substantial number of trust companies providing a wide array of services. However, there are reports of a substantial reduction in corporate business for the offshore services sector as a result of the strict corporate legislation. The lasting effect on the Bahamas as a competitive offshore financial centre has yet to be seen. At present, the Bahamas Companies Registry compares poorly with the BVI and Samoa for efficiency, and with the stricter compliance requirements and increased licence fee, it enjoys less of an advantage.