Why is Bahamas a good place to form a company? If you are planning a new company formation in the Bahamas, we look at why companies register in Bahamas.
How do I start a corporation in The Bahamas?
Through its status as one of the world's Special Economic Zones and its political stability, the Bahamas has become one of the most popular places to form an offshore company.
Whether you want to incorporate offshore offices for your company or an offshore financial service company, The Bahamas has all the infrastructure and industry expertise you could want.
Reduced tax burdens, secrecy, foreign investment incentives and other business-friendly initiatives are the main reasons many companies choose to incorporate in The Bahamas.
The Bahamas, as an island nation, do not charge corporation tax as a levy on companies located within their borders, which is one of the main reasons the location is so popular for International Business Companies (how offshore companies are known under Bahamian law) and those in the tourism sector, such as the cruising tourism industry.
However, recent legislation means you are required to secure a business license and pay annual fees to incorporate there. These fees are charged in a similar way to stamp duty here in the UK.
For those looking for the ideal place to open an offshore company, The Bahamas should be at the top of the list. Forming a company here is a wise choice for any business owner looking to reduce their tax burden and reap all the benefits this brings.
From increased profits to streamlining your cash flow, incorporating your business as an offshore business in The Bahamas is well worth considering.
Offshore Company Formation Bahamas
When it comes to safeguarding your wealth and the wealth of your business, forming an International Business Company is the best way to do it. There are several types of business entities you can incorporate your business as in The Bahamas. These other forms include:
- Trust Company
- Special Purpose Vehicle (SPV)
- Limited Liability Company (LLC)
- Fund Company
- Partnership
- General Partnership
- Public Company
- Exempted Limited Partnership
- Limited Liability Partnership
- Unlimited Liability Company
- Undisclosed Partners
- Joint Ventures
- Sole Proprietorship
- Bahamian Foundation
- Bahamian International Business Company (IBC)
A Bahamas International Business Company is one of the most popular company formations due to the variety of uses it can be employed for.
For example, you can use an IBC as a holding company for various instruments, including corporate bank accounts, commercial names, financial names, moveable and immovable property possessions, international trade, and ultimately to protect your wealth, assets and inheritances.
All of this is legally permitted through an IBC in The Bahamas since this type of business entity is registered as per the International Business Companies Act 2000 and the International Business Companies (Amendment) for moving business abroad and foreign companies.
Why do companies register in the Bahamas?
Choosing which jurisdiction your company will reside in can significantly impact your company conducting business. Therefore, business owners should approach this decision with due care.
While The Bahamas is one of the most popular places for company founders to register their offshore companies, it's important to understand why. Here is our list of the reasons why The Bahamas is the best place to form your offshore company.
According to corporate law in The Bahamas, International Business Companies do not need to provide any minimum paid-up capital to incorporate themselves in the country.
Therefore, business owners looking to do so have complete control over how much money they want to incorporate their company with. Ultimately, you can form a new company in The Bahamas for as little money as you like.
The tax benefits may be the main reason people choose to incorporate their businesses in The Bahamas. In terms of owning and operating a business in the Bahamian economic environment, there are no taxes.
Your company won't have to pay a penny in corporate taxes, corporate income taxes, personal income tax, sales tax, inheritance tax, excise taxes or capital gains tax. The only liabilities you'll face incorporating in The Bahamas are licensing fees, stamp duty, property tax and import tariffs.
The Bahamas also have an incredibly free immigration policy known as 'Economic Permanent Residency'. This legislation by The Bahamas Government means individuals can freely live and work in the country.
So long as you hold a permanent residence card, you can pass through immigration without trouble and reside in the Bahamas as long as you wish.
Companies established in The Bahamas can conduct operations in complete privacy, protected by the provisions of the International Business Companies Act 1990.
Under these rights, you don't even have to declare the names of shareholders in your company for the Corporate Registry. You are also free from any annual filing or reporting requirements you'd otherwise be exposed to under other international standards.
Offshore companies located in The Bahamas are also not subject to exchange control laws.
This means they can conduct any transaction in any currency they wish. However, if you want to deal in Bahamian Dollars, you will need to have said transaction approved by the Bahamian Central Bank.
International Business Companies are free from the obligation to file account statements. As a business owner, you only need to keep a record of your company's transactions.
You must keep these records for at least five years from the date you performed the transaction. You are also free to maintain your company records outside of The Bahamas if you wish, so long as your company registration agent knows about them.
You only need to appoint a single director when forming an offshore company, whether a corporate directorship, individual directorship, or a nominee director. Your director also does not have to reside in The Bahamas.
They are not restricted to registered office addresses, meaning your director is free to take meetings wherever they like, allowing for easy foreign direct investments in a foreign company registered in The Bahamas. According to Bahamian Company Law, you do not have to appoint a company secretary.
Given that you won't have to file accounts or annual returns with your Bahamian offshore corporations, this means your bookkeeping couldn't be simpler.
Your offshore company is also exempt from any audit requirements you might otherwise adhere to under other jurisdictions.
Your company only needs to have a single shareholder to incorporate in The Bahamas. While any shares you issue must be registered, there are Bahamian laws preventing offshore companies from issuing bearer shares.
However, you can issue voting and non-voting shares and appoint nominee shareholders. Whatever the number of shareholders or however many shares you issue, you are not required to hold annual general meetings for your shareholders.
Tax Scenario in the Bahamas
When you decide to form an offshore business in The Bahamas, your top priority and that of your domestic or foreign investors is your tax scenario.
The breakdown of taxes for companies located in The Bahamas is as follows:
- Corporate Tax: 0%
- Personal Income Tax: 0%
- Inheritance Tax: 0%
- Capital Gains Tax: 0%
- Estate Tax: 0%
- VAT Rate (Value Added Tax): 7.5% - 12%
Find out more
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