Company formation in Bahamas

The process of incorporating a company in The Bahamas is governed by the International Business Companies Act 2000, as amended in 2004. The basic requirements and documents needed to incorporate a company include the following:

1. Organizational Structure. The company must have at least one managing director (no residency requirement; can be a legal entity or an individual), one shareholder, and a secretary (optional).
2. Registered Office and Agent. A registered office must be established in the Bahamas where official documents will be kept. It is mandatory to hire a registered agent in compliance with the Beneficial Ownership Registry Law of December 20, 2018.
3. Licensing. Depending on the nature of the business, specific licenses may be required:
   • Financial services and investment funds require a license from the Financial Commission.
   • Pharmaceutical businesses need a permit from the Ministry of Health.
   • Tourism-related activities require approval from the Ministry of Tourism.

   For International Business Companies (IBCs), banking and insurance activities can be registered, but all operations must occur outside of the Bahamas.

4. Corporate Records. Maintain registers of shareholders and keep records of minutes from shareholder meetings.
5. Authorized Capital. The authorized capital amount varies based on the company’s legal structure. State duties are also based on capital size:
   • Up to $50,000: Registration fee of $350.
   • Over $50,000: Registration fee of $1,000.

Banking

1. Company Formation Documents: Certificate of incorporation, articles of association, and memorandum.
2. Director and Shareholder Information: Documentation for all directors, shareholders, and founders. These can be individuals or legal entities, and residency is not a requirement.
3. Registers: Register of directors and shareholders must be maintained.
4. Meeting Records: Minutes from the first shareholder meeting must be provided.
5. Share Certificates: Issued to shareholders as proof of ownership.
6. Director Appointment Resolution: The resolution appointing the company’s directors should be submitted, and it must be apostilled.

In this jurisdiction, it is possible to open many types of companies. Most often IBCs, foundations, and LLCs are chosen. Each option has its advantages and requirements:

International Business Company (IBC):

• The size of the authorized capital is $50000;
• The name can be used abbreviation: Ltd, Limited, Corp.;
• There should be at least one director and one shareholder in the organizational structure;
• Have a local office and a licensed agent;
• Pay state duty, depending on the amount of authorized capital;
• Tax benefits;
• If income exceeds $850 million, a financial report must be filed with the Ministry of Finance.

Limited Liability Company (LLC):

• No capital requirements;
• No corporate tax;
• No need to hold a meeting of directors;
• Mostly chosen by international firms and investors because of the taxation system;

Aggregate Account Company (SAC):

• No capital requirements;
• No corporate tax;
• International business opens if it is necessary to segregate assets, build a complex financial structure, and protect investments from cross-liability.

Exempted limited partnership (ELP):

• No capital requirements;
• No corporate tax;
• There is an equity tax;
• Requires a general partner and one limited partner;
• For international business, it is interesting as an instrument where general partners have unlimited liability and limited partners have personal assets protected.

Private Foundations:

• $10000 authorized capital;
• No taxes;
• Used by wealthy families to protect assets, later to be passed on to heirs, until then retaining control over the activities of the foundations.

Company Types

Director and Shareholder Information

For non-resident companies in the Bahamas, there are only:

• An annual fee (depending on the amount of authorized capital): up to $50,000- $350 fee, over $50,000- $1,000.
• No income tax.
• No capital gains tax.
• No stamp duty.
• No VAT.

Taxation

Zero taxes for offshore companies.
To attract more investors, the government has provided zero taxes on capital gains, profits, VAT, and stamp duty, and there is no currency control.

Minimum requirements for company registration.
One director and one shareholder are enough to run the business.

There is no financial reporting.
According to the legislation, companies are not required to submit an annual financial report.

High confidentiality.
Data on managers and owners of the company are recorded in the registers but are not publicly disclosed.

There are no requirements for authorized capital.
The amount of capital affects the further payment of license fees. Company registration in the Bahamas costs are minimal.

Geographical location.
The islands are located between North and South America, a kind of economic bridge that promotes cooperation between countries.