This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
Lawandtax-news.com favicon LAWANDTAX-NEWS.COM
HOME | CONTACT | RECRUITMENT | ABOUT | LEGAL | PRIVACY & COOKIES Join us on Twitter Lowtax Facebook page Join our discussion on LinkedIn Join us on Google+ Delicious Subscribe to the Tax-News RSS Feed
   LOWTAX   
   TAX-NEWS   
   
 

Contributions

Articles »

Country Home Pages

Australia
Bahamas
Barbados
Bermuda
British Virgin Islands
Canada
Cyprus
Dubai
Gibraltar
Guernsey
Hong Kong
Isle of Man
Ireland
Jersey
Labuan
Liechtenstein
Luxembourg
South Africa
UK
US

Daily Tax Quote

Lowtax Network Sites
Lowtax Network Portal: 'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail.
Tax News: Global tax news, continuously updated through the day.
Expat Briefing: A free online publication serving international expatriates and featuring world news, forums, events, in-depth country information and reliable investment and personal taxation guides.
Law & Tax News: Daily news and background data on tax and legal developments for international business.
Offshore-e-com: A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library: One of the web's largest and most authoritative business and investment information sources.
US Tax Network: The resource for free online US taxation information, covering: corporate tax, individual tax, international tax, expatriates, sales and e-commerce tax, investment tax.
Offshore Trusts Guide: OTG publishes news, features and newsletters on the use of offshore trust structures.
TreatyPro: Online tax treaty resource.
Global Incorporation Guide [GIG]: A BSI / Lowtax Network international business smart tool.
THE BAHAMAS
LINKS IN THIS SECTION
FORMS OF OFFSHORE OPERATION
TAX TREATMENT OF OFFSHORE OPERATIONS
FEES PAYABLE BY FINANCIAL INSTITUTIONS
TAXATION OF FOREIGN EMPLOYEES
EXCHANGE CONTROL
OFFSHORE ACTIVITIES IN THE BAHAMAS
EMPLOYMENT AND RESIDENCE
RELATED INFORMATION


Offshore Legal And Tax Regimes


The term 'offshore' is not used in Bahamian legislation or in describing company forms. Abstaining from local trading activity is the key factor which allows use of the various 'offshore' corporate forms, and ensures long term exemption from taxation and some or all of stamp duty, exchange controls and business licensing requirements. Since there are no general corporate taxes other than stamp duty, there is no separate 'offshore' sector as such in taxation terms.


Bahamas Forms of Offshore Operation

Offshore (external) operations take place mostly within the following forms:


Bahamas Tax Treatment of Offshore Operations

In the Bahamas there is no income or corporation tax, no capital gains tax, no VAT or sales tax, and no withholding tax. Companies and partnerships pay annual fees to the Government depending on their nature and capitalisation. There is stamp duty and there are some property taxes. Exempted Limited Partnerships are exempt from both, as are Trusts provided that their beneficiaries are non-resident. Banks and Trust Companies (ie administrators of trusts) are also exempt provided that they have non-resident licenses (this is a matter of practice - a license is issued as resident or non-resident depending on circumstances). All of the offshore entities, and non-resident domestic companies, are exempt from exchange controls. Mutual Funds are exempt from taxes and exchange controls if they have an appropriate corporate form; in practice therefore they are exempt. For further details of stamp duty and property taxes see Domestic Corporate Taxes.

BACK TO TOP


Bahamas Fees Payable by Financial Institutions

Financial institutions licensed under the Banks and Trust Companies Law 1965 pay fees on registration and annual fees (2006) as follows:

Authorised Agents and Authorised Dealers
$310,000
Authorised Dealers
$250,000
Authorised Agents
$60,000
Other Public Institutions
$25,000
Restricted Bank and Trust
$5,000
Restricted Bank
$5,000
Restricted Trust
$2,500
Non-Active Bank and Trust
$1,000

'Other Public Institutions' includes banks and trust administration companies; 'Restricted' banks and trusts are those that deal only with a list of customers included in their license and which cannot be altered without permission.

Captives are licensed under the External Insurance Act 1983, and pay a fee of $2,500 on registration and annually thereafter. In addition, $650 is paid annually for each underwriting manager employed by a captive insurer.

On registration, a captive insurer gains exemption from taxes for 15 years.

Resident insurance companies pay a registration fee of $1,000 and the same annually thereafter, plus 2% of gross premiums collected each quarter.

Insurance companies are not permitted to use the International Business Company or LDC corporate forms, but must establish a Bahamian domestic limited company or must register as foreign companies. Captives registered under the External Insurance Act are exempt from exchange controls.

New insurance legislation is in the pipeline which will update the somewhat outdated Bahamian insurance acts.

The Investment Funds Act 2003 established the following fee structure for investment funds and fund administration companies:

Application Fee for a Investment Fund Licence (Standard Professional or SMART Fund - non refundable)
$750.00
Initial Registration Fee (Recognized Foreign Fund -non refundable)
$100.00
Initial Filing Fee (Investment Funds licensed by an
Unrestricted Investment Fund Administrator)
$750.00
Annual Investment Fund Licence Fee (Standard, Professional Fee payable in or SMART Investment Fund)
$950.00
Annual Investment Fund Licence Fee (Self Administered Standard, payable in the first Professional or SMART Investment Fund)
$1,000.00
Annual Registration Fee (Recognized Foreign Fund)
$100.00
Initial principal office fee payable by an Investment Fund in the first year to Administrator (non-refundable)
$500.00
Application Fee for an Unrestricted Investment Fund Administrator’s Licence (non-refundable)
$5,000.00
Application Fee for a Restricted Investment Fund Administrator’s Licence (non-refundable)
$2,000.00
Application Fee for an exemption from the obligation of having to obtain an Investment Fund Administrator’s Licence (non-refundable)
$1,500.00
Annual Unrestricted Investment Fund Administrator’s Licence Fee
$10,000.00
Annual Restricted Investment Fund Administrator’s Licence Fee.
$5,000.00
Annual Exemption Fee from the obligation of having to obtain an Investment Fund Administrator’s Licence
$1,500.00

NB: Fees charged by administration or registration agents are a separate matter; the above fees are simply set annual dues.

BACK TO TOP


Bahamas Taxation of Foreign Employees of Offshore Operations

This section refers to the taxation of foreign employees in the Bahamas. The general principles of individual taxation in the Bahamas also apply to the resident employees of non-resident entities. There are in fact no personal taxes as such in the Bahamas, and there is no distinction between the employees of resident or non-resident operations.

BACK TO TOP


Bahamas Exchange Control

The Bahamas have exchange controls, under the Exchange Control Act and Regulations 1956, applying to resident individuals and companies, who need consent from the Central Bank to conduct operations in foreign currencies. Likewise, non-resident or offshore companies, who are free to deal in foreign currencies, require Central Bank consent to deal in Bahamian dollars.

Residents comprise: Bahamian nationals, companies beneficially owned in the Bahamas, and companies whether Bahamanian or foreign-owned operating within the Bahamas. Foreign nationals with work permits who live in the Bahamas are also normally considered to be resident.

Non-residents comprise: foreign nationals living abroad, or, if living in the Bahamas, without the right to work there; and foreign companies and foreign-owned Bahamian companies trading exclusively outside the Bahamas.

Residents who want to make external investments in foreign currencies will usually be allowed to do so, but have to buy the foreign currency at a premium; non-residents who want to invest into the Bahamas may do so, but the opportunities for portfolio investment are very limited.

Exchange controls are gradually being dismantled, initially in respect of CARICOM, and it is the intention of the Central Bank to remove them entirely in due course.

In February 2006 the Central Bank announced the relaxation of exchange controls relating to real estate investments, foreign currency transfers, mortgages, and debt and equity instruments.

Prior to the changes, residents purchasing securities or making real estate investments overseas had to do so through the Investment Currency Market (ICM), at a premium bid and offer rate of 25% and 20%, respectively. With immediate effect, these rates were reduced by half, to 12.5% and 10.0%, respectively.

In addition, equities of Bahamian Companies listed on BISX can be cross listed on principal CARICOM exchanges (i.e. Barbados, Jamaica, ECU and Trinidad & Tobago), within prescribed limits.

Foreign companies listed on principal CARICOM exchanges may list issued and outstanding equity securities on BISX.

BACK TO TOP


Bahamas Offshore Activities

The International Business Company and its cousin, the Limited Duration Company, are not allowed to do business with Bahamian residents, but are allowed the following activities in the Bahamas:

  • To maintain bank accounts;
  • To make and maintain contact with professional firms;
  • To maintain books and records;
  • To hold meetings of directors or members;
  • To lease real estate for use as an office.

It is possible to obtain a license from the Minister of Finance to carry out other types of business activity on the island, if he considers it is in the interests of the Bahamas.

Other offshore and non-resident entities operate under broadly similar regimes to the International Business Company.

BACK TO TOP


Bahamas Employment and Residence

Work permits are necessary for non-Bahamians to be employed: key (senior or specially-skilled) people are issued permits; in other cases it is wise to discuss the possibility of a permit with the Bahamas Investment Authority in advance.

Anyone wishing to reside in the Bahamas must obtain a residence permit from the Immigration Department. Home-owners can obtain an annually-renewable Home Owner's Residence Card which acts as a visa for entry and residence during its validity. Major international investors and existing owners of properties worth more than $500,000 benefit from accelerated treatment of residence applications

The International Persons Landholding Act 1993 reversed a previously deterrent stance and actively encourages the purchase of local residential property by foreigners. Acquisition of a single family dwelling or up to 5 acres of vacant land for construction of a dwelling no longer needs an advance permit, but can be registered after purchase. Rule for inheritors of Bahamian properties have been similarly relaxed. Fees for the (compulsory) registration of real estate and residence permits are as follows:

  • Application for registration: $25
  • Application for permit: $25
  • On issue of certificate of registration or issue of permit:
    Value of property, $
    Fee, $
    Up to 50,000
    50
    Under 101,000
    75
    101,000 and over
    100
  • Homeowner resident card: $500

BACK TO TOP

LINKS IN THIS SECTION
FORMS OF OFFSHORE OPERATION
TAX TREATMENT OF OFFSHORE OPERATIONS
FEES PAYABLE BY FINANCIAL INSTITUTIONS
TAXATION OF FOREIGN EMPLOYEES
EXCHANGE CONTROL
OFFSHORE ACTIVITIES IN THE BAHAMAS
EMPLOYMENT AND RESIDENCE
RELATED INFORMATION

THE LOWTAX LIBRARY

One of the web's largest and most authoritative business and investment information sources. Alongside topical, daily news on worldwide tax developments, you can receive weekly newswires or access up-to-date intelligence reports on a range of legal, tax and investment subjects.

FREE TRIAL NEWS SUBSCRIPTION

Our 16 constantly updated intelligence reports cover every important aspect of 'offshore' and international tax-planning in depth, including banking secrecy, the EU's savings tax directive, offshore funds, e-commerce, offshore gaming and transfer pricing. Reports are available for immediate downloading or as subscription services with news pages.

Advertising & Marketing

With over 50,000 qualified readers every month our web-sites offer a number of cost effective, targeted advertising, sponsorship and marketing opportunities:

Display advertising - from 'skyscrapers' to 'buttons'
Content/article submission and sponsorship
Opt-in email marketing
On-line Services Directory listings

Click here to learn more or contact Charles Bell on +44 (0)1424 205 425 or at charles@bsi-media.com and he will put you in touch with your regional rep.

News & Content Solutions

Could your corporate web-site or newsletter benefit from incorporating regularly updated news and content tailored to serve your clients' interests? We can provide a variety of maintenance-free news and content solutions that can be seamlessly integrated and dynamically delivered:

Customised, personalised 'own-brand' news services
Newsletter content and management
News Headlines Tickers

Click here to learn more or contact Charles Bell on +44 (0)1424 205 425 or at charles@bsi-media.com and he will put you in touch with your regional rep.

Important Notice: Wolters Kluwer TAA Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.

All rights reserved. © 2017 Wolters Kluwer TAA Limited


All content on this site has been provided by BSIRN.