Yes, a foreigner can start a business in Bhamas by getting his company registered in this territory.
Overview of Company Registration in the Bahamas
The Bahamas is known as the Commonwealth of the Bahamas, consisting of 700 islands. It is situated on the Atlantic Ocean and bordered by Florida, the United States (Northwest), Cuba, Hispaniola island and the Caribbean (south), the British Overseas Territory and Caicos Islands (southeast).
It is a parliamentary democracy - A unitary parliamentary constitutional monarchy with its capital as Nassau, making use of the United States dollar (USD) and the Bahamian dollar(BSD) as its official currency. English is the national language of the Bahamas. The population of the Bahamas is over 300,000 people.
The legislative framework regulating company activities is the International Business Act 2020. The authority responsible for company formation, registration and other company-related activities in this jurisdiction is the Bahamas Investments Authority (BIA).
Benefits of Company Registration in the Bahamas
The benefits of company registration in the Bahamas are given below -
No minimum paid-up capital
The corporate laws of the Bahamas don't have a minimum capital requirement for offshore companies, which provides the entrepreneur with complete control over the paid-up capital with which he wants to incorporate the company.
Tax benefits are one of the major advantages of registering a company in the Bahamian economic landscape, as the entrepreneur is not liable to pay any taxes and is only required to pay the licensing fees, property and stamp taxes, and tariffs for imports.
Flexible immigration policy
The Economic Permanent Residency offered by the Bahamian Government makes it easy for individuals to work and live in the country. Individuals holding a permanent residence card can clear immigration freely and reside in the Bahamas for any length of time.
The provisions of the International Business Companies Act provide complete privacy to a foreign company for conducting its business in the Bahamas. Even the names of the shareholders don't have to be provided to the Corporate Registry. There is no need for the companies to comply with the annual reporting requirements.
Absence of any exchange control laws
The offshore companies in the Bahamas don’t need to comply with any exchange control laws. They are allowed to transact freely in any currency. However, any dealings in Bahamian Dollars should be approved by the Central Bank.
No Need for Filings
Offshore companies don’t need to file any statements of accounts. They are only required to maintain the records that set out all the transactions, and the records should be maintained for five years from the date of the transaction.
Companies also have the flexibility of maintaining records outside the Bahamas. However, the registered agent in the Bahamas should be informed about such records.
Flexible rules for appointing a director
Offshore companies only need a single director. , and the director doesn’t have to be a resident of the Bahamas.
Appointment of nominee directors is also permitted. The directors are also free to hold their meetings in any location and don’t have to remain confined to the registered office address. The Bahamian Company Law doesn’t require the entrepreneur to appoint a company secretary either.
Straightforward Shareholder Requirements
There is a need for at least one shareholder. The shares should be registered, but bearer shares are not permitted to be issued by offshore companies. Both voting and non-voting shares can be issued, Nominees shareholders can be appointed, and No annual general meetings need to be conducted for the shareholders.
Eligible Corporate Structures for Company Registration in the Bahamas
The following corporate structures are eligible for company registration in the Bahamas:
Investors may become sole proprietors. The entrepreneur must have a business license and a shop license if appropriate, and the name of his business should be registered under the Business Names Act.
Limited Liability Companies
Limited liability companies are permitted under Bahamian law and may be incorporated under the relevant Companies Act (for local limited liability companies) or the relevant International Business Companies Act (for international business companies).
Domestic Limited Companies
This type of company is shares is usually established for conducting local business. Companies are incorporated under the relevant Companies Act by 2 or more persons signing an MOA, satisfying the requirements of the relevant Act and by submission of the same to the Registrar along with required affidavits and declarations.
International Business Companies
The International Business Company is the most widely opted type of company for offshore operations in the Bahamas; it normally takes the form of a private company limited by shares.
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.
Unlimited Liability Companies
A public company formed under the Companies Act is similar to a private company limited by shares except that there is a mandatory annual audit, and there must be at least 3 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.
Foreign Companies (also known as Subsidiaries/ Branches /Representative Offices)
These are the types of Companies incorporated outside The Bahamas that may conduct business in The Bahamas by registering as a foreign company under the relevant Companies Act. It may operate a branch in the Bahamas with minimal formality and no registration requirements, but upon being recognized as an 'undertaking' under the Companies Act or as a 'trading' branch, it must register with the Registrar-General.
Segregated Account Companies
These companies are opted by captive insurance and investment funds. A Segregated Account Company (SAC) is a type of company with a series of accounts with assets which are linked to one or more of the segregated accounts.
This type of company structure is also permitted under the laws of The Bahamas. There aren't any registration or incorporation requirements for joint ventures.
This is one of the most common business arrangements opted by professional service providers (i.e. doctors, accountants, engineers, architects, etc.) along with other business-minded persons intending to pool their resources and enter into a partnership.
A partner in a general partnership will be personally liable for the debts contracted on behalf of the firm, although as between partners, his liability may be limited to the proportionate value of his share in the partnership. There isn’t any need for a national of The Bahamas or a related state to be a partner in a general partnership arrangement.
Exempted Limited Partnership
The Exempted Limited Partnership Act (1995) created a partnership form (ELP) that is equal to the International Business Company and has the same limitations on the local activity as the IBC. The structure is the same as for a limited partnership, wherein 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 relevant Companies Act or the relevant International Business Companies Act.
Undisclosed partnerships are allowed in The Bahamas in the absence of any specific regulations that govern undisclosed partnerships. Such partnerships are formed by private contracts, and fees vary depending on the complexity of the relationship.
Eligibility Criteria for Company Registration in the Bahamas
One of the most preferred company structures opted for by foreigners for company registration in the Bahamas is the International Business Company. The below mentioned eligibility criteria must be met for registering the same-
- Minimum 1 Director
- Minimum 1 shareholder
- 1 registered Agent
- No minimum capital requirement
- No need for a secretary
Documents required for Offshore Company in the Bahamas
While registering an offshore company in the Bahamas, the below-mentioned documents must be submitted to the relevant authorities:
- Filled application form stating the entire details of the business owners and shareholders
- MOA and AOA
- A registered office (physical)
- Notarized copies of the passports of shareholders and business owners
- Residence Proof
- Minutes of the meetings
- Share certificates
- Shareholders and directors register
Procedure for Company Registration in the Bahamas
For registering an offshore company in the Bahamas, the below-mentioned procedure must be followed.
File the application
The applicant must fill out the application form mentioning the relevant details as prescribed in the application form.
Attach the relevant documents
After filing the form, the applicant must attach the required documents along with the application form.
Submit the documents to the appropriate government authorities
The next is the submission of the application form and the documents to the relevant government authorities for obtaining the registration certificate.
Gather the respective approvals
After submitting the application form with the documents, the same shall be scrutinized, and upon the authorities being satisfied with its accuracy, the authority shall provide the registration certificate, after which the applicant must gather other relevant approvals as per the business activities.
Open an offshore bank account
The offshore bank account is important for carrying out business transactions; therefore, the applicant must obtain the same after the registration of the company in the Bahamas.
Yes, opening a Corporate Bank Account is important in order to carry out business operations. Yes, the Bahamas is considered an offshore financial centre. The most preferred company is the International Business Company. The following restrictions apply to IBCs' activities: However, IBCs are permitted to own shares in other Bahamian companies, maintain bank accounts in the jurisdiction and employ the services of local professionals.
Frequently Asked Questions
Yes, opening a Corporate Bank Account is important in order to carry out business operations.
Yes, the Bahamas is considered an offshore financial centre.
The most preferred company is the International Business Company.
The following restrictions apply to IBCs' activities:
However, IBCs are permitted to own shares in other Bahamian companies, maintain bank accounts in the jurisdiction and employ the services of local professionals.