Frequently asked questions.

Nothing but FAQs on company incorporation in the Bahamas.

Company
Incorporation
Setting up
overseas
Company
Secretary
Nominee
Director
Xero
Accounting

Company incorporation

What are the key requirements for setting up a private company in the Bahamas?

How many shares should I have?

You can have as many or as few shares as you wish, although you need a minimum of at least one share. If you don’t know how many you need, we recommend one share per dollar of capital.

What is the difference between ordinary and preference shares?

Ordinary shares typically give you voting rights in company matters, as well as showing how much ownership you have in the company.

Preference shares give the shareholder preferred treatment over ordinary shareholders, for instance with dividends or a priority right to be repaid in the event of an insolvency.

Preference shares are not mandatory when setting up a company – get in touch with us to see if this is right for you.

Why do you ask me to provide 3 company names?

We ask for three names as a worst case scenario in the event that your top choice is no longer available, unacceptable, or too similar to that of an already established organization.

What are the guidelines for naming a Bahamas company?

To increase your chances of the proposed name being approved right away, you want to make sure that the name:

– Is not similar/identical to an existing company in the Bahamas
– Is not vulgar/obscene
– Is not already reserved
– Does not contain media, bank, law, finance, or education (as the corresponding external governmental authority may be required to review and approval the name).

Approved company names will be held and secured for 60 days from the date of your application. Also, if you need to extend the name reservation for another 60 days, you may do so by filing an extension just before the initial hold expires.

You may also select a “trade name” that is different from your registered legal name, but there are requirements for the disclosure of the underlying business or company’s true registered name and unique entity number.

I am currently registered as a sole proprietorship – what is the process to convert to a private limited company?

If you would like to keep the name for your private limited company, you must close down the sole proprietorship. Get in touch with us to learn more.

What is the liability of a shareholder?

The liability of a shareholder is usually limited to (1) any unpaid amounts on the shares held by that shareholder, (2) any liability or obligations expressly provided for in the company’s constitution or shareholders’ agreement, and (3) any liability for breach of director’s duties where those shareholders are also directors.

Setting up from overseas

Can a foreign individual or foreign company be 100% shareholder?

Yes! There are no restrictions around foreign ownership when setting up your company.

Does a foreigner need to visit the Bahamas to establish a company?

No – you can incorporate a company completely online without ever visiting the Bahamas. However, if you would like to do business in the Bahamas and want to set up a the Bahamas bank account, banks generally require two directors (or a director and a company secretary) to be present.

Do I need a local director?

Yes – there is a requirement to have at least one director who is “ordinarily resident” in the Bahamas – i.e. a Bahamas Citizen, Residency holder. You can also be the local director after you have applied and received approval for an Employment Pass or Dependent Pass LOC under this new company.

Is there anyone else I need to appoint?

Yes – every company is required to appoint a company secretary within 6 months of incorporation. If you appoint us as your company secretary, we will incorporate your company for free. See our pricing plans to learn more.

Do I need to invest $100,000 to register my business in the Bahamas?

Technically, the minimum amount of paid-up capital to incorporate in the Bahamas is S$1. However, if you are seeking an EP or other work visas, we recommend investing a minimum of S$100,000 and the EP salary is subject to experience, age and education qualifications.

Can a foreigner relocate to the Bahamas to operate the new business?

This is possible. If you would like to relocate to the Bahamas to operate your new business, you will need to apply for an Employment Pass. We can assist in your Employment Pass application – click here.

What type of business address is required?

A local registered address is one of the minimum requirements for opening a company in the Bahamas. The registered address must be a physical address in the Bahamas (a physical location and not PO Box).

It is possible to use a residential address as your business address under the Home Office Scheme. However, you must receive approval from the Housing Development Board (for HDB flats) or Urban Redevelopment Authority (for private properties) in order to use residential property (owned or rented) for home office use.

Is it easy to open a bank account in a foreign country after I have incorporated a company in the Bahamas?

It is a reasonably straightforward process to open a bank account after incorporation. However, many banks do require two signatories to be present when opening an account with them. If we are engaged as your company secretary we can act as one of the signatories, but this usually means that you will need to fly out in order to open a Bahamas bank account.

We can arrange appointments with the Bahamas banks free of charge, and we make our offices available so you can meet them without standing in any queues. These meetings typically take no more than an hour.

Directors

Can a foreign individual or foreign company be 100% shareholder?

You only need one director to incorporate a company. However, there is also a requirement to have at least one director who is “ordinarily resident” in the Bahamas – i.e. a Singaporean, PR or Entrepass Holder. You will also qualify if you have applied and received approval for an Employment Pass or Dependent Pass holder (with a Letter of Consent) under the new company.

There are a number of different ways you can satisfy the local resident director requirement:

Most foreign entrepreneurs and businesses that set up a Bahamas company without relocating to the Bahamas opt for a nominee director service. We offer this service for $1,000/year.

Company secretary

How do I issue new shares or transfer existing shares?

For a new shareholder(s), you will need to send a share capital application letter to apply to issue new shares (if you are issuing new shares to an existing shareholder, you can skip this step). The letter should contain:

Subject to the pre-emptive rights stated in the Constitution, we then pass a board resolution and/or a shareholder resolution to confirm the share issue or transfer. Transfers of shares are subject to stamp duty which is payable to IRAS.

For a new shareholder, we also require KYC documents (proof of identity and domicile). If the new shareholder is a corporate entity, we also require the business profile (or equivalent) and proof of shareholding. We charge S$100 per transaction for common shares and S$200 for preference shares.

What is CorpPass?

CorpPass is a login method that allows corporations to complete online corporate transactions with the Government.

Accounting

What is GST?

GST stands for Goods and Services Tax. In other countries it is also known as VAT or Value Added Tax.

Do I need to register for GST?

GST registration is only required for companies that can reasonably expect turnover in the next 12 months to be more than S$1 million. However, a company can also voluntarily register for GST if it is under this threshold.

What is ECI?

ECI stands for Estimated Chargeable Income. It is your estimated taxable revenue for the past year.

Do I need to file for ECI?

Some companies apply for an administrative concession which means they do not need to file. If your company has less than $5 million in annual revenue for the financial year, and your ECI is nil for the year of assessment, you do not need to file. Contact us to learn more.

Not sure where to begin? Give us your email and we’ll be in touch.

HELP AND
SUPPORT

ABOUT
SCGIBC

CONTACT
US

SCG IBC Limited Unit E, 3rd Fl The Balmoral Corporate Ctr Sanford Drive Nassau, Bahamas
Copyright 2021 SCG Corporate Services Ltd