Introduction

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

In the same time zone as New York, the Bahamas is less than an hour by air from Miami and is 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 Register of Directors and Officers at the Companies Registry on public record. The annual government fee is USD350 for authorised capital of USD50,000 or below and USD1,000 for authorised capital above USD50,000. The fee and filing requirements when combined with the introduction of strict compliance and due diligence requirements, have nullified Bahamas'' competitive advantage.

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 licenced service provider such as OIL.

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 after 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 is 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 is a major offshore banking centre with over 400 banks present and holding in excess of USD390 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 business for the offshore services sector as a result of the new 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 little advantage.