The Bahamas Company Formation Services

SCG offers access to the Bahamas tax haven where many leading international organizations leverage for conducting business in North America. This is a streamlined process for company formation Bahamas initiatives that do not require minimum capital investment, corporate tax strain, annual returns, or conducting routine audits. In addition, the pro-business nature of the Bahamas government includes a high level of confidentiality for internationally based businesses looking for offshore incorporation on Bahamas or establishing Bahamas permanent residence locations.

Foreigners, including Americans, can indeed legally start a business in The Bahamas. To do so, there are specific prerequisites to keep in mind:

• Obtain a business license: This is the first step for any foreign entrepreneur.
• Register the business with the appropriate authorities: Ensuring compliance with local regulations is essential.
• Have a registered office in The Bahamas: A local presence is necessary.
• Comply with any industry-specific regulations: Depending on the nature of the business, additional compliance may be required.

The Bahamas offers an attractive environment due to its lack of corporate tax strain and the absence of requirements for minimum capital investment or routine audits. With a high level of confidentiality and a supportive government, it’s an ideal location for international entities seeking offshore incorporation or looking to establish permanent residence.

HOW TO CHOOSE THE RIGHT BUSINESS STRUCTURE IN THE BAHAMAS

Selecting the ideal business structure in The Bahamas involves considering several key factors that align with your business goals and operational needs. One popular option for entrepreneurs is the International Business Company (IBC), known for its adaptability and advantageous tax conditions.

Understand the Legal Framework

Before forming an IBC, it’s crucial to familiarize yourself with the International Business Companies Act of 1990. This legislation details the procedures and requirements for establishing and managing an IBC in The Bahamas, ensuring that your business aligns with local regulatory standards.

Key Considerations for IBC Incorporation

When setting up your IBC, you’ll need to address several essential components:

• Unique Business Name: Ensure your company name is distinct and available for registration.
• Shareholder Requirements: The IBC structure requires at least one shareholder, offering no limitations based on nationality.
• Director and Officer Policies: You must appoint at least one director. However, there are no nationality or residency conditions for this role, offering significant flexibility.
• Capital Flexibility: There’s no stipulated minimum capital, allowing you to tailor your investment according to your business needs.
• Customizable Corporate Structure: The IBC allows you to design a corporate structure that meets your specific business objectives.

By carefully evaluating these elements, you can establish a business structure that supports your strategic vision while optimizing the benefits of operating within The Bahamas’ favorable business environment.

FORMATION AND MAINTENANCE FEE FOR THE 1ST CALENDAR YEAR

• Name check and approval
• Filling incorporation documents with the Registrar of Companies
• Payment of the Government Fees
• Provision of registered office and registered agent for one year
• Provision of company secretary for one year (if selected)

A standard set of digital corporate documents:

• Certificate of Incorporation
• Memorandum & Articles of Association
• Appointment of First Directors
• Consent Actions of the Board of Directors
• Share Certificates
• Register of Directors and Members

Offshore legislation governing incorporation and management of International Business Companies in Bahamas is 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.

LEGAL FORM

The Companies Act 1992, a law based on English law, is the current law regulating the formation and operation of companies in the Bahamas. This law allows for the creation of private companies limited by shares or by guarantee, as well as public companies. The International Business Company, a type of private company limited by shares, is the most commonly used type of company for offshore operations in the Bahamas.

MEMORANDUM AND ARTICLES OF ASSOCIATION
To incorporate a private company in the Bahamas, the following steps must be taken:

• File a Memorandum of Association with the Registrar General.
• File Articles of Association, which must be signed and witnessed by one other person. These can be filed either with the Memorandum of Association or within six months thereafter.
• The Memorandum of Association must be signed by at least two subscribers in the presence of at least one witness. Each subscriber must subscribe for at least one share.
• If a subscriber is a non-resident, they may be required to obtain exchange control permission.
• A declaration signed by counsel and attorney must be submitted to the Registrar General, outlining the capacity of the persons incorporating the company.

REGULATORY COMPLIANCE REQUIREMENTS
Compliance begins with obtaining a Business Licence, a mandatory requirement for legally operating in the Bahamas. Companies must also adhere to Corporate Taxes and contribute to the National Insurance scheme, ensuring they meet all tax liabilities. Regular financial responsibilities include understanding when Audited Accounts are necessary, especially for companies meeting specific size thresholds.

Conducting Annual General Meetings (AGMs) is another critical compliance aspect, where company affairs are reviewed and essential decisions are made.

SHAREHOLDERS
At least one shareholder is required to incorporate a company in the Bahamas. This shareholder can be an individual or a corporation. The identity of the company’s shareholders is not made publicly available.

SHARE CAPITAL
There is no minimum capital requirement for incorporating a company in the Bahamas. The standard authorized share capital is $50,000. The minimum issued capital can be one share with or without par value. Different types of shares, such as registered, preference, redeemable, and shares with or without voting rights are permitted. Companies with an authorized capital of up to $50,000 must pay an annual government license fee of $425.

DIRECTORS
An International Business Company (IBC) in the Bahamas must have at least one director, who can be an individual or a corporation. There is no requirement for the director to be a resident of the Bahamas, and the identities of the directors are not made publicly available.

REGISTERED OFFICE AND LOCAL AGENT OR SECRETARY
Every company in the Bahamas must have a registered office and a registered agent, and the details of these must be provided to the Registrar of Companies. While it is not required to have a company secretary, it is advisable to have one for administrative purposes. The company secretary can be an individual or a corporation of any nationality.

MEETINGS
Meetings of directors or shareholders of a company in the Bahamas do not have to be held in the Bahamas. There is also no requirement for an Annual General Meeting. Meetings can be held outside of the Bahamas, via telephone or other electronic means, or directors and shareholders may vote by proxy.

AUDIT AND FINANCIAL RETURNS
There is no requirement to file audited accounts or annual returns with the authorities in the Bahamas. However, companies must keep reliable accounting records for all money received and spent, as well as for the assets and liabilities of the company. These records must include documentation such as invoices, receipts, and contracts and must be kept for a minimum of five years from the date of the transactions they relate to. While the law does not mandate the preparation of financial statements, the accounting records must be sufficient to accurately explain the company’s transactions, determine its financial position at any time, and allow financial statements to be prepared if necessary.

What Are the Anti-Money Laundering Compliance Requirements for Businesses in The Bahamas?

Navigating anti-money laundering (AML) compliance in The Bahamas is crucial for any business, whether operating locally or internationally. This guide breaks down the essential components:

1. Client Identification and Verification

• Know Your Customer (KYC): Businesses must establish the identity of every customer and associated entity. This involves thorough verification processes to ensure legitimacy.

2. Essential Reporting and Record-Keeping

• Reporting Suspicious Activities: It’s mandatory for companies to submit reports about any dubious financial activities. This requirement is a critical legal obligation that helps mitigate potential risks.
• Maintaining Financial Documentation: Companies are expected to keep comprehensive financial records for a legally specified minimum duration. This supports transparency and accountability.

3. Development of AML Programs

• Customized AML Frameworks: Every business should design and implement a bespoke anti-money laundering program. The program should be tailored to fit the specific size and operations of the company, addressing unique needs and challenges.

4. Regulatory Knowledge

• Understanding Applicable Laws: A deep understanding of the AML regulations relevant to your industry is necessary. Companies should ensure they are well-versed in the regulatory landscape specific to their sector.

5. Ongoing Staff Training

• Regular Training Sessions: Businesses are encouraged to conduct routine training sessions for employees. This ensures that staff remain up-to-date with the latest compliance procedures and can effectively implement them in day-to-day operations.

By adhering to these guidelines, businesses solidify their commitment to preventing financial crimes, thereby maintaining their reputation and integrity in the global marketplace.

COMPANY NAME
The names of International Business Companies (IBCs) in the Bahamas must end with one of the following words or their abbreviations: Limited, Corporation, Incorporated, Societe Anonyme, or Sociedad Anonima. The use of certain names, such as Bank, Insurance, and Trust, requires a license. Names that suggest a connection to government or public entities are generally prohibited. IBC names can be in any language that uses the Latin alphabet.

MEMORANDUM AND ARTICLES OF ASSOCIATION
To incorporate a private company in the Bahamas, a structured approach is essential to ensure compliance with local regulations and successful registration. Begin by choosing a unique company name and deciding on the desired company structure, whether it’s a limited liability company or another form. These initial steps are crucial as they lay the groundwork for your business’s identity and operations.

Next, proceed with the legal filings:

• File a Memorandum of Association with the Registrar General. This document outlines the company’s name, purpose, and initial share structure.
• File Articles of Association, which detail the company’s internal governance. These must be signed and witnessed by at least one other person. You can file these with the Memorandum of Association or within six months thereafter.
• Signature Requirements: The Memorandum of Association must be signed by at least two subscribers in the presence of at least one witness. Each subscriber is required to subscribe to at least one share.
• Exchange Control Permission: If any subscriber is a non-resident, they may need to obtain exchange control permission, ensuring compliance with financial regulations.
• Declaration Submission: A declaration signed by counsel and attorney must be submitted to the Registrar General, outlining the capacity of the persons incorporating the company.

Finally, ensure you register your business with the Registrar General’s Department and comply with all necessary regulatory documentation. This includes providing detailed shareholder and director information, which is vital for maintaining transparency and adhering to legal standards.

By following these steps, you ensure that your company is legally incorporated in the Bahamas, ready to operate within the regulatory framework.

SHAREHOLDERS
At least one shareholder is required to incorporate a company in the Bahamas. This shareholder can be an individual or a corporation. The identity of the company’s shareholders is not made publicly available.

SHARE CAPITAL
There is no minimum capital requirement for incorporating a company in the Bahamas. The standard authorized share capital is $50,000. The minimum issued capital can be one share with or without par value. Different types of shares, such as registered, preference, redeemable, and shares with or without voting rights are permitted. Companies with an authorized capital of up to $50,000 must pay an annual government license fee of $425.

DIRECTORS
An International Business Company (IBC) in the Bahamas must have at least one director, who can be an individual or a corporation. There is no requirement for the director to be a resident of the Bahamas, and the identities of the directors are not made publicly available.

REGISTERED OFFICE AND LOCAL AGENT OR SECRETARY
Every company in the Bahamas must have a registered office and a registered agent, and the details of these must be provided to the Registrar of Companies. While it is not required to have a company secretary, it is advisable to have one for administrative purposes. The company secretary can be an individual or a corporation of any nationality.

MEETINGS
Meetings of directors or shareholders of a company in the Bahamas do not have to be held in the Bahamas. There is also no requirement for an Annual General Meeting. Meetings can be held outside of the Bahamas, via telephone or other electronic means, or directors and shareholders may vote by proxy.

INCORPORATION TIME
It typically takes 5-7 business days to incorporate an International Business Company (IBC) in the Bahamas. If you need the incorporation documents to be legalized with an Apostille, it will take an additional 5-7 days to complete this process.

RECURRING AND MAINTENANCE FEE AS FROM 2ND YEAR

• Provision of registered office and registered address
• Provision of company Secretary & registered agent
• Government fee where a BC has an authorised share capital up to US$ 50,000

TAXATION
An International Business Company (IBC) in the Bahamas is exempt from exchange control, stamp duty, and other taxes and estate duties for 20 years from the date of incorporation. Business conducted outside of the Bahamas by an IBC is also exempt. However, unlike in many other jurisdictions, an IBC in the Bahamas can conduct business and own real estate within the country, though these local transactions are subject to exchange controls and stamp duty.

For a more comprehensive understanding, it’s important to look at specific tax categories applicable to IBCs:

• Income Tax: There is no income tax levied on IBCs in the Bahamas.
• Corporate Tax: Bahamas IBCs do not pay corporate tax on income generated outside of the jurisdiction.
• Capital Gains Tax: There is no capital gains tax for transactions executed by Bahamas IBCs.
• Estate Tax: The Bahamas imposes no estate tax implications for IBCs.
• Exchange Control: The country exercises no exchange control, allowing for the free movement of funds internationally.

While your IBC may enjoy these tax exemptions within the Bahamas, it is essential to comply with any tax regulations in other jurisdictions where your business operates. Always consult with a financial advisor to fully understand your global tax obligations.

AUDIT AND FINANCIAL RETURNS
There is no requirement to file audited accounts or annual returns with the authorities in the Bahamas. However, companies must keep reliable accounting records for all money received and spent, as well as for the assets and liabilities of the company. These records must include documentation such as invoices, receipts, and contracts and must be kept for a minimum of five years from the date of the transactions they relate to. While the law does not mandate the preparation of financial statements, the accounting records must be sufficient to accurately explain the company’s transactions, determine its financial position at any time, and allow financial statements to be prepared if necessary.

ANNUAL OBLIGATIONS
Despite the absence of a filing requirement for annual returns, maintaining up-to-date records remains crucial. Companies should document essential details about directors, shareholders, and other key stakeholders to ensure transparency and compliance. Regularly updating these records not only aligns with best practices but also provides a clear picture of the company’s financial health.

IMPORTANCE OF RECORD KEEPING
Ensuring accurate and comprehensive record-keeping supports the preparation of financial statements if required. This practice is vital for offering insight into business transactions and maintaining order within the company. By adhering to these practices, businesses can swiftly respond to any need for detailed financial documentation, thereby safeguarding their operations and reputation.

OUR SERVICES FOR THE COMPANY FORMATION IN BAHAMAS INCLUDE:

• Name check and approval
• Filling incorporation documents with the Registrar of Companies
• A standard set of original corporate documents
• Payment of the Government fees
• Provision of registered office and registered agent for one year
• Provision of company secretary for one year

DOCUMENTS REQUIRED FOR THE COMPANY FORMATION
Please provide the following documents for all Directors, Shareholders, Beneficial Owners, Authorised Signatories:

• Notarised copy of valid passport.
• Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within 3 months).
• Original or certified copy of Lawyer’s/Banker’s/Accountant’s reference letter (dated within 3 months).
• In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and Certificate of Good Standing (for companies registered more than 1 year).

Investment Opportunities in The Bahamas for Companies

When exploring potential investments in The Bahamas, companies are presented with a diverse array of opportunities that can enhance their growth and profitability:

• Real Estate Ventures: The Bahamian real estate market is ripe for investment, offering chances to dive into both commercial and office space development. This sector could provide substantial returns as demand for quality properties rises.
• Collaborating with Investors: Partnering with both local and international investors is crucial. Such alliances can bring valuable capital and scalability to your operations, optimizing your entry and expansion within the market.
• Insurance for Risk Management: Safeguard your business interests by engaging with top-tier insurance firms. With the right coverage options, you can mitigate risks, ensuring your operations remain secure against unforeseen events.
• Incorporation Benefits: Establishing a company in The Bahamas can unlock key advantages like asset protection and tax neutrality. These elements can bolster investor confidence and enhance the overall potential for your company’s growth.
• Strategic Partnerships: Forming alliances with other businesses can be a game changer. These partnerships can amplify your market presence and streamline resource distribution, making your operations more efficient and far-reaching.

By factoring in these opportunities, companies can make strategic investments that may result in robust financial benefits and improved company stature in The Bahamas.

Navigating International Business Relationships in The Bahamas

In today’s global economy, building and nurturing international partnerships is crucial, especially when operating within unique jurisdictions like The Bahamas. Here’s how companies can effectively manage these relationships:

Due Diligence is Key

When considering partnerships with international entities, particularly in The Bahamas, conducting a thorough vetting process is essential. Follow these steps to ensure potential partners are credible:

1. Conduct Comprehensive Background Checks:
   • Verify the legitimacy of the company with reliable sources.
   • Request and confirm references to understand their business reputation.
2. Evaluate Economic and Political Risks:
   • Assess how the political and economic landscape in The Bahamas might impact your business relationship.

Legal and Compliance Considerations

Understanding and complying with local regulations is non-negotiable for successful international operations.

• Familiarize Yourself with Bahamian Laws:
  • Consult with legal experts to ensure your business practices adhere to local requirements.
  • Keep updated on any regulatory changes that might affect your operations.
• Align with International Compliance Standards:
  • Strive for compliance not just locally, but also according to global standards and best practices.

Maintain Clear Communication

Effective communication is the backbone of international partnerships.

• Document All Communications:
  • Keep detailed records of all interactions to avoid misunderstandings and ensure compliance.
  • Use secure and reliable channels for correspondence to protect sensitive information.

By exercising due diligence, understanding local laws, and maintaining transparent communication, companies can navigate international relationships in The Bahamas successfully, ensuring compliance and fostering strong, sustainable partnerships.

Key Considerations for Engaging with Local Business Entities in The Bahamas

Engaging with local business entities in The Bahamas is a crucial step when setting up your company. Here’s what you need to think about:

1. Network with Established Organizations:
   • Build connections with entities like local chambers and societies. These can open doors to essential resources and networking opportunities.
2. Understand the Business Landscape:
   • Local chambers often provide insights into the business environment, helping you understand industry trends and market conditions.
3. Access Financial Services:
   • Utilize local building societies to gain access to necessary financial services. They can also offer guidance on local real estate and property concerns.
4. Leverage Local Insight:
   • Interacting with these entities grants you the practicality of having local advice at your fingertips, assisting in strategic decision-making.
5. Form Valuable Connections:
   • Networking through these channels can lead to making important alliances and partnerships that might benefit your business in the long run.

By focusing on these areas, you can effectively foster relationships that are both beneficial and strategic in establishing your business in The Bahamas.

How to Open a Corporate Bank Account in The Bahamas

Opening a corporate bank account in The Bahamas can be a smooth and efficient process, often achievable without visiting in person. Here’s a step-by-step guide to help you get started:

1. Select the Right Bank

Begin by choosing a financial institution that aligns with both your business goals and operational needs. Look for banks that provide robust online banking options to facilitate easy management of your account from anywhere in the world.

2. Gather the Required Documents

To streamline the process, ensure you have all necessary paperwork ready:

• Identification: A valid passport or national ID.
• Corporate Documentation: This includes your company’s registration papers.
• Business Plan or Description: A concise explanation of your business’s nature and objectives.
• Proof of Address: Utility bills or similar documents that verify your location.

3. Submit Your Application

With all documents in hand, submit your application to your selected bank. The bank will carry out thorough due diligence to verify your information, a standard practice to ensure compliance with regulatory requirements.

4. Await Approval and Activate Your Account

Upon successful verification, your corporate bank account will be approved and activated. You’ll be able to commence business transactions immediately.

Advantages of a Bahamian Corporate Bank Account

Having a corporate account in The Bahamas can offer multiple benefits, such as confidentiality and flexible banking solutions. Enjoy features like eBanking and access to credit facilities that enhance business operations.

Following these steps will position your business for efficient banking and secure financial management in The Bahamas.