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Jurisdictions Bahamas |
Jurisdictions - Bahamas BASIC JURISDICTION INFORMATION
Official Name: The Bahamas Christopher Columbus landed on the Bahamian island of San Salvador in 1492. After various attempts at settlement early in the 17th century, the islands were finally settled from South Carolina, and became an English colony in 1718. Much of the population, both black and white, arrived by immigration from the Americas. GEOGRAPHYThe Bahamas are an archipelago made up of about 700 islands and located in the North Atlantic approximately 50 miles southeast of Florida. About 30 of the islands are inhabited, the two largest of which are New Providence and Grand Bahama. Smaller islands include Andros, Eleuthera and Great Abaco. The total land area of the Bahamas is about 5,360 square miles, supporting an estimated population of just under 300,000. GOVERNMENTIn 1973, the Bahamas became independent from British colonial rule, but the country remains a member of the Commonwealth. Elections for the House of Assembly are held every five years. The head of government is the Prime Minister, who presides over a cabinet of about eight ministers. The Governor-General appoints members of the Senate (upper house) on the recommendation of the Prime Minister and the Leader of the Opposition. The Bahamas have pursued a long-term policy of promoting themselves as an international finance center, accompanied by a well-developed regulatory structure. Since the economy depends heavily on the offshore financial sector, the government tries hard to avoid any use of the island for money laundering or other illegal activities. MONETARY SYSTEMThe unit of currency is the Bahamian Dollar (BSD), though the American Dollar (US$) is also widely accepted. The Bahamas have foreign exchange controls, but these apply only to residents. Non-residents and offshore entities are generally exempt from the controls. COMMON LAW SYSTEM BASED ON ENGLISH LAW As a former British colony, the Bahamas boast English as their official language. Their legal system is based on British common law, supplemented by local statutes enacted by the House of Assembly. BUSINESS ENVIRONMENTThe Bahamas possess a well-developed communication system and professional infrastructure to support international financial activities. STATUS WITH INTERNATIONALAUTHORITIESThe Bahamas have filed a letter with the Organisation for Economic Cooperation and Development indicating its commitment to comply with OECD initiatives. They were blacklisted by the Financial Action Task Force in June 2000, but were removed from the list the following year. The Bahamas have a Tax Information Exchange Agreement with the United States. TAX SYSTEMThe Bahamas are a largely tax-neutral jurisdiction, though companies are subject to a payroll tax if they have employees. It has no double taxation treaty with any country. Details are as follows: A. Personal Tax B. Corporate Tax C. Withholding Tax D. Capital Gains Tax E. Estate Tax F. Transfer Tax at Death and on Gifts COMPANY REGISTRATIONRegistered local agents can incorporate companies in the Bahamas within 24 hours. However, as explained above, the Bahamian offshore industry has been around for several years. There are many Bahamian companies on the books already, and it may therefore be difficult to find an available and suitable company name. TYPES OF COMPANIES The majority of companies formed in the Bahamas for offshore purposes are incorporated under the International Business Companies Act 1989. However, this law did not supersede the existing companies law, which was most recently re-stated in the Companies Act 1992. The Companies Act is based on English law, and is used to form various types of companies used by businesses trading in the Bahamas. Companies formed under the Companies Act 1992 can be private companies limited by shares or by guarantee, or can be public companies. For all these types of companies, there need to be a minimum of two members, and there must be a registered office in the Bahamas. Companies intending to trade locally must secure appropriate business licenses. Other types of business vehicles available in the Bahamas include Domestic Limited Companies (DLC); International Business Companies (IBC); Limited Duration Companies (LDC); Exempted Limited Partnerships (ELP).
Limited Duration Companies (LDC) Bahamian law allows the creation of Limited Duration Companies, which are identical to IBCs in all requirements and stipulations, except that they have a limited life, which cannot exceed 30 years. This restriction on the duration of the company allows LDCs to be considered as equivalent to limited liability companies under US tax law. Exempted Limited Partnerships (ELP)The Exempted Limited Partnership Act (1995) outlines a partnership form which has the same limitations on local activity as the IBC. Under this law, a general partner can also be a limited partner, and one of the general partners must be either a Bahamian resident or a company incorporated under the Companies Act 1992 or the International Business Companies Act 1989. An ELP must be registered, and the names and addresses of all general partners must be filed. On issue of the registration certificate, the ELP becomes exempt for 50 years from exchange controls 每 though this may be complicated if one of the general partners is a Bahamian resident 每 from all forms of taxation, from stamp duty, and from business license fees. TRUSTSThe trust law of the Bahamas is based on English trust law, and was codified in the Trustee Act 1983, but there have been a number of recent statutes which update and extend Bahamas trust law, particularly the Trustee Act 1998 which repeals the Trustee Act 1983 and the Variation of Trusts Act Cap 166. The Trust (Choice of Governing Law) Act 1989 protects against forced heirship provisions; and the Fraudulent Dispositions Act 1991 strengthened the position of asset protection trusts. Bahamian trusts (other than those holding Bahamian property) do not have to be registered, and the 1998 Act stipulates that non-resident settlors, donors, beneficiaries and trustees are exempt from exchange control regulations. As a result, it is no longer necessary for trusts to be registered with the Central Bank as non-resident. This applies to existing trusts as well as to new ones. Trusts (other than those holding Bahamian property) 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＊ 每 effectively a supervisor of the trustee(s) 每 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. BANKING FACILITIESThe Bahamas are one of the world＊s top ten international banking centers, with more than 400 licensed banks from some 30 countries, and a total asset base around US$200 billion. Capital ratios average over 10%. The country＊s strong regulatory structure, highly skilled workforce and stable government have attracted some of the most prestigious financial institutions in the world, including Barclays Bank, Lloyds Bank and Swiss Bank. ICS TRUST can incorporate International Business Companies, Limited Duration Companies and Exempt Limited Partnerships speedily and seamlessly. Based in Hong Kong, ICS Trust (Asia) Limited incorporates companies in Hong Kong and most offshore jurisdictions including Anguilla (Caribbean), where one of our affiliates is a registered agent. ICS TRUST is an independently owned, Hong Kong-registered trust company, also licensed as an Investment Advisor by The Hong Kong Securities and Futures Commission. With more than twenty years experience, we are a market leader in helping Entrepreneurs and Multinationals establish and grow their businesses in Asia as well as providing comprehensive TAX, TRUSTS and TRADE services.
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