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Forms of Company


The majority of companies formed in the Bahamas for offshore purposes are incorporated under the International Business Companies Act 1989 (see below). However this law did not supersede the existing companies law, most recently re-stated in the Companies Act 1992 (as amended), which is based on English law and is used to form various types of company used by businesses trading in the Bahamas, and also for certain other special purposes.

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 company, Memorandum and Articles of Association must be filed at the Companies Registry, there need to be a minimum of two members, and there must be a registered office in the Bahamas. If a company is going to trade locally, it will need an appropriate business license.

Bahamas Domestic Limited Company

A domestic resident company limited by shares is usually formed for the purposes of carrying on local business.

There must be at least two directors. The company's annual return includes a list of the members, and is kept on the public register. An annual audit can be dispensed with, if all shareholders agree. There is no requirement to file financial statements.

Shares need not have a par value, and when paid up, need not have distinguishing numbers. Bearer shares can be issued with exchange control permission.


Bahamas Company Limited by Guarantee

Under the Companies Act, a company limited by guarantee must have a minimum of two members; the Memorandum of Association contains a statement of the amount up to which the members guarantee the company's debts. The Articles can provide for the members to have differing 'shares' of the assets and liabilities.

The Company Limited by Guarantee has certain advantages, including that there is no list of members on the annual return, and that control over assets can be achieved without the use of shares; in some jurisdictions, profits realised from such companies are classified as capital gains rather than as income. Specialist advice is required by anyone considering the use of a company limited by guarantee.


Public Company

A public company formed under the Companies Act is similar to a private company limited by shares except that there is a compulsory annual audit, and there must be at least three directors. A list of all officers, directors and managers of the company must be kept at the registered office and sent to the Registrar-General along with the annual return.


International Business Company

The International Business Company is the most widely used vehicle for offshore operations in the Bahamas; it normally takes the form of a private company limited by shares. The governing legislation is the International Business Companies Act 1989, updated by the International Business Companies (Amendment) Act 1994, the International Business Companies Act 2001, and the International Business Companies (Amendment) Act 2004.

Until 2001, there was no need to register details of beneficial owners, directors or officers, but under the International Businesses Companies Act 2001 which came into force at the start of 2001 IBCs are required to submit their identities, addresses and names of directors and owners to the Registrar General's Department. Otherwise, statutory requirements are minimal, and flexible:

  • Only one director, who may be corporate, and one shareholder are required;
  • Shareholders, directors and officers need not be resident in the Bahamas and there is no stipulation as to their nationality;
  • There is no minimum capital requirement; shares must be registered and may be issued in any currency; bearer shares however are no longer permitted;
  • Accounts need not be kept; however, if they are kept there is no requirement for an audit.
  • A share register needs to be kept; it is unclear whether nominee shareholders are still permitted;
  • Shareholders and directors meetings need not be held in the Bahamas and can be held by telephone;
  • The Memorandum and Articles of Association are the only documents to be held on the public record;
  • The legislation contains asset protection clauses against actions emanating from without the Bahamas; it also contains provisions for the protection of minority shareholders;
  • An IBC is exempt from Bahamian Exchange Control, from stamp duty and from other taxes and estate duties for 20 years from the date of incorporation;
  • an IBC can be managed, controlled and operated from the Bahamas.

A company incorporated or (if foreign) registered under the Companies Act 1992 can switch to IBC status if it qualifies under the legislation.

IBC status is granted subject to certain conditions:

  • No business may be transacted with residents in the Bahamas;
  • No ownership interest in real property in the Bahamas is permitted; property may be leased for office use only;
  • Banking, insurance or re-insurance business is not permitted;
  • Engaging in the business of company management or providing registered facilities for Bahamian incorporated companies is not permitted.

IBCs are permitted to own shares in other Bahamian companies, maintain bank accounts in the jurisdiction and employ the services of local professionals.

It is obligatory to use a registered agent in the Bahamas to incorporate an IBC. Fees for incorporation of an IBC are based on the company's authorised share capital. Normally, the incorporation process takes no more than one day.

Statutory incorporation and annual registration fees are as follows:

Authorised Capital
Incorporation Fee
Annual Fee
Up to $50,000
Over $50,000

Amendments to the International Business Company legislation in 2004 permit the continuation of an IBC as a Bahamian company under the Companies Act, and enable an IBC to be licensed as an external insurance company.


Limited Duration Company

The International Business Company (Amendment) Act 1994 introduced the Limited Duration Company, which is essentially the same as the IBC but with a life limited to 30 years. This form is directed towards a certain class of US investors - when suitably structured the LDC has the characteristics of a partnership and is treated as such in the US, where it is known as a Limited Liability Company.


Foreign Company

A foreign company can operate a branch in the Bahamas with minimal formality and no registration requirements, but once the branch is recognised as an 'undertaking' under the Companies Act 1992, or as a 'trading' branch, it has to register with the Registrar-General. The following amount to having 'undertaking' status:

  • the keeping of a place of business;
  • the holding of a licence (or the requirement to hold one) for specified business;
  • the holding of a licence (or the requirement to hold one) for selling securities; or
  • having a local telephone listing.

Registration involves filing a notarised and legalised copy of the company's Memorandum and Articles of Association (or its Statutes) and details of the directors and officers. A Certificate of Registration is issued, and the company (the branch) then has the same position as a Bahamian incorporated company, ie it must maintain a local registered office, etc etc as above.

If the foreign company (branch) intends to trade within the Bahamas or to employ more than two Bahamians, it needs to apply to the Bahamas Investment Authority for clearance from the National Economic Council, and it needs to obtain the relevant business licence as does a Bahamian company.

It is open to a qualifying foreign company, once registered, to become an International Business Company (see above).


Bahamas Limited Partnership

Bahamian law relating to partnerships is essentially similar to English law. General or limited partnerships are allowed.

In a limited partnership there must be at least one general partner with unlimited liability, and the limited partners may not take part in management of the partnership. There must be a written partnership agreement which must be registered, and one of the general partners must file a notarised declaration of the sum contributed by the limited partners.

Partnerships which trade in the Bahamas need the appropriate business license, as for limited companies.


Bahamas Exempted Limited Partnership

The Exempted Limited Partnership Act (1995) created a partnership form (ELP) equivalent to the International Business Company, and has the same limitations on local activity as the IBC (see above). The structure is the same as for a limited partnership (see above); 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, from all forms of taxation, from stamp duty, and from business license fees. (However, if one of the general partners is a Bahamian resident, then there may be some exchange control implications).

The initial registration fee for an ELP is $850, and the continuing annual fee is $475. An annual declaration must be filed confirming adherence to the local trading prohibition.


Bahamas Trusts

The trust law of the Bahamas is based on English trust law, and was codified in the Trustee Act 1893, 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; the Fraudulent Dispositions Act 1991 strengthened the position of asset protection trusts. In early 2004 legislation dealing with purpose trusts was introduced to the legislature. See Law of Offshore for a fuller description of the legal regime for Trusts in the Bahamas.

Bahamian trusts (other than those holding Bahamian property) do not have to be registered, and the 1998 Act disapplies Exchange Control Regulations to non-resident settlors, donors, beneficiaries and trustees - therefore 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 real estate) with non-resident beneficiaries are exempt from all taxes, including stamp duty on transfers into trust.

Under the 1998 Act, new trusts need to be stamped with a $50 Bahamas revenue stamp, which can be bought for cash and does not involve any disclosures. See Offshore Legal and Tax Regimes for further details of the tax position of Bahamian trusts.

The 1998 Act provides for the appointment of a 'protector of trust', effectively a supervisor of the trustee(s), and also managing and custodian trustees.

A company offering trust services must obtain a licence under the Banks and Trust Companies Act 1965 and conform to various conditions.

Comprehensive new Private Trust Companies legislation passed both houses of parliament in the Bahamas in December 2006. Under the legislation, a Bahamian PTC, like other structures such as foundations, does not require regulatory approval. The PTC need only arrange its affairs with a regulated Bahamian service provider or Registered Representative.

The legislation which allows for the formation of Private Trust Companies (PTCs) is the Banks and Trust Companies Regulation (Amendment) Act, 2006, and the Banks and Trust Companies (Private Trust Companies) Regulations, 2007.

Under the legislation this class of trust is defined by reference to the Designated Person(s). The Designated Person(s) is an individual(s) who is identified at the establishment of the PTC and with whom all other settlors of trusts, for whom the PTC acts as trustee, must be related. With the requirement that the Designated Persons must be related, and that all other settlors of trusts, for whom the PTC acts as trustee, must be related, the PTC can act as Trustee for an unlimited number of trusts and can benefit anyone (subject to due diligence requirements) from the assets of the trusts.


Bahamas Foundations

Foundations were introduced by the Foundations Act 2004 and accompanying regulations. Such structures are already well-known in Europe, Latin America and Asia, and the Bahamian foundation is an important tool for the jurisdiction’s expanding wealth management capability.

There are no perpetuity period rules applicable to Bahamian foundations, which immediately provides for continual unending succession if it is desired by the founder. A Bahamian foundation is not subject to forced heirship laws of a foreign jurisdiction.

A Bahamian foundation is a distinct legal entity which is convenient for ‘proper law’ questions. Assets placed within the foundation are owned solely by it, and a change in a Bahamian foundation’s governing body does not change the legal ownership of the foundation’s assets. There is no statutory requirement for an external audit unless the foundation’s charter so provides.

A foundation established in another country may redomicile in the Bahamas; and a Bahamian foundation may redomicile into another country, provided such a move is permitted in that country.

While the most common use of foundations is for estate planning, they are useful in a number of other areas. They can be used to provide for subordinated debt; to perpetuate a particular corporate governance policy; to hold the benefit of warranties for a wider or changing class of investors; for philanthropic purposes; or for the separation of voting and economic benefits.

In addition, foundations allow for investment in family companies whose economic performance may be poor, for ownership of a private trust company, for provision of an employee share option scheme, or for packaging financial instruments into marketable securities.

The registration process for a Bahamian foundation is comparable to that of a company registration, making it a legal entity that must be filed with the Registrar General of the Bahamas. Like that of a company, the name of the Bahamian foundation must be reserved at the Registrar General’s office prior to submission of the necessary documentation. The registrar will confirm that the foundation name is valid for use and that the name has been reserved for a period of 90 days.

Online registration is available. The fees for the registration of a Bahamas foundation are: $500 if registered in the first quarter; $375 if registered in the second quarter; $250 if registered in the third quarter; and $125 if registered in the fourth quarter. The foundation’s charter must contain a statement that the value of the assets of the foundation may not be less than B$10,000, or the equivalent in any other currency.

Officers of the foundation must keep proper records and accounts, which can be inspected by any officer, foundation council member, founder, auditor or any other supervisory person at any time. However, confidentiality provisions restrict any person acquiring information from disclosing such information relating to the foundation, without the expressed consent from the founder and the beneficiaries, or as required by law, or a Bahamian court.


Segregated Account Company

A SAC is a company which is registered under the Segregated Accounts Companies Act 2004. The SAC may create separate accounts with assets and liabilities which are segregated from the assets and liabilities attributable to every other account and also from the company’s general assets and liabilities.

Key highlights of a SAC:

  • A segregated account is not a legal person distinct from the SAC.
  • A SAC must inform any person with whom it deals that it is a SAC.
  • A SAC must identify the segregated account which is connected to a particular transaction.
  • All assets linked by a SAC to a segregated account shall be held by the company as a separate fund which will not be part of the general account of the company but held exclusively for the benefit of the account owners of the particular segregated account. Those assets will be available to meet the rights of the account holders and satisfy the liabilities connected to the particular segregated account.
  • The SAC will record what assets are in its general account and such assets shall be the only assets of a SAC available to meet the general liabilities of the SAC. Assets in the general account will not be available to satisfy liability which is linked to a segregated account.
  • The rights and obligations of account owners in a segregated account are contained in a governing instrument. The governing instrument may provide for conditions which must be complied with in order for a person to become a segregated account holder. The governing instrument may also provide for management of the segregated account, appointments of one or more managers, and the orderly winding up of the affairs and termination of the segregated account.
  • The governing instrument must be governed by the laws of The Bahamas and the parties to it must submit to the jurisdiction of the courts of The Bahamas.
  • The rights and obligations of counterparties dealing with the SAC are evidenced in the form of contracts.




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