The Commonwealth of the Bahamas is an archipelago of approximately 700 islands and cays located in the Atlantic Ocean 80 kilo- meters east of the Peninsula of Florida and 35 minutes away from Miami by daily scheduled flights. Documented Bahamian history begins with the words “Baja Mar”, the name the Spanish bestowed meaning “shallow sea”. The islands are in fact mountain plateaus with Nassau as the capital situated in New Providence Island. The population of the island is approximately 340,000 the majority of which live on the Island of New Providence and Grand Bahamas Island.
The climate for foreign investment in the Bahamas is attractive. The Bahamas possesses an outstanding infrastructure for commercial and financial activities and offers a highly skilled workforce. The professional community of accountants, international bankers, investment specialists is large, diverse and English speaking.
The Bahamas is an independent country since 1973 and continues to remain an active member of the British Commonwealth of Na- tions. The Bahamas is a Parliamentary type democracy and can be considered politically very stable. The legal system is based on the English common law, complemented by Bahamian statutes. The Head of Government is an elected Prime Minister.
1. GENERAL ASPECTS
1.1 HIGHLIGHTS OF BAHAMAS IBC COMPANIES
The International Business Companies Ordinance, effective as of January 15th, 1990, authorizes the creation of International Busi- ness Companies (“IBC’s”) to conduct offshore business, with no taxation in the Bahamas, except for a small annual license fee. IBC’s have the power to engage in any lawful activities without the need for special or lengthy object clauses. An IBC is a compa- ny that does not carry on business with persons resident in The Bahamas nor have persons resident in the Bahamas as benefi- cial owners of any of its shares; nor own an interest in real property situated in The Bahamas; nor carry on banking or trust busi- ness; nor carry on business as an insurance or a reinsurance company; nor carry on the business of providing the registered office for companies.
Nevertheless, an IBC can make or maintain deposits with a person carrying on business within the Bahamas; have a local bank account; maintain offices; retain professional services; hold shares, debt obligations or other securities in an IBC; prepare and keep books and records, such as those of trading operations and hold directors’ and shareholders’ meetings.
The Bahamas has no double taxation treaties, which could obligate the disclosure of information for clients of other countries. There is a Mutual Legal Assistance Treaty with the United States of America that applies exclusively to information related to criminal activity.
We must keep detailed and updated information in respect of each client, including details of the beneficial owners of all companies.
1.3 MOVEMENT OF FUNDS
IBC’s may transfer funds into and out of the Bahamas without exchange control or restrictions. The currency in use is the Bahamian Dollar. The Bahamian Dollar is fixed to the US$ at par value. US dollars and Bahamian dollars are used interchangeably throughout the island chain.
In accordance with the terms of the International Monetary Fund Agreement, the Bahamas has no restrictions on current a ccount transactions. Additionally, there are no restrictions of the free repatriation of profits. The Central Bank administers Exchange control. The Bank, however, delegates to its authorized dealers the power to approve allocations of foreign exchange for certain payments.
2. CORPORATE REQUIREMENTS
IBC’s names must contain the words Corporation, Incorporated, Sociedad Anónima, Societé Anonyme, Limited, Gesellschaft mit beschrankter Haftung or their abbreviations. The words “Assurance”, “Bank”, “Building Society”, “Chamber of Commerce”, “Chartered”, “Cooperative”, “Imperial”, “Insurance”, “Municipal”, “Royal”, “Trust”, or any word conveying a similar meaning cannot be used.
Furthermore, any name identical to that of a company already in existence or suggesting the patronage of any member of the Royal Family, or the Government of the Bahamas or a department thereof, a statutory corporation, or board, or a local, or municipal authority, cannot be used. A company name can be approved within a few hours of the receipt of the request, and incorporation should be completed within two (2) to three (3) working days from the time the Articles and Memorandum of Association are submitted to the Registrar.
Capital can be denominated in any currency and shares can be issued other than for cash and with or without par value. Bearer shares are not permitted.
Two persons or companies duly licensed must subscribe the Memorandum of Association and Articles of Association.
2.4 REGISTERED OFFICE / AGENT
IBC’s must have a Registered Office and a licensed Registered Agent in the Bahamas.
2.5 DIRECTORS / OFFICERS
Name and address of persons who are directors and officers must be noted on a Register of Directors and Officers. The Register of Directors and Officers, commencing from the date of the registration of the company shall be filed with the Registrar and shall be open to inspection by members of the public during official hours. The Director and Secretary of the c ompany must sign this document and the corporate seal must be affixed to it. We suggest appointing a minimum of two directors, who may be individuals or companies.
2.6 REGISTER OF MEMBERS
An updated copy of the register of shareholders must be kept at the Registered Office and must commence from the date of registration. A general meeting of members of are IBC’s shall be held at least one every year.
2.7 BOOKS, RECORDS, AND SEAL
Books, records, and minutes of an IBC may be kept at a place outside the Bahamas. A Company Seal is mandatory under the Act and an imprint of it must be kept at the Registered Office.