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Why Invest in the Bahamas

TOP SIXTEEN REASONS TO INVEST IN THE BAHAMAS

  1. Close proximity to major North American and Latin American financial centres
  2. Within 50 miles of the world’s largest economy
  3. Same time zone as New York and Toronto (EST)
  4. Peaceful and stable democracy since 1729
  5. A $500,000 investment means an accelerated path to permanent residency.
  6. Independent nation with compliant legislation and consultative legislative approach
  7. No local taxes on capital gains, inheritance, corporate and personal income, dividends and interest
  8. Proactive incentives for investment
  9. Highly trained industry professionals and an English-speaking workforce
  10. Essential public services and modern infrastructure
  11. Ideal climate and lifestyle with many islands and cays to explore
  12. Properties hold their value
  13. Ethnic diversity
  14. World class golfing & fishing
  15. Some of the worlds best beaches are located here
  16. Modern medical facilities

Why Do Business Offshore?

Over the past century many international investors have found it more convenient to do business in international offshore centers. The reasons and advantages are many:

  1. Offshore jurisdictions are tax free;
  2. The investor has great flexibility with regard to his international investments including freedom of foreign currency movement;
  3. The investor is thus afforded access to the Euro dollar market and other international markets/currencies;
  4. The offshore jurisdiction provides a highly trained cadre of professionals which when combined with an advanced infrastructure makes doing business offshore easier and cheaper.

When a well regarded industry publication recognized The Bahamas as the “Best International Financial Center in the Western Hemisphere” in late 2005 it confirmed the belief long held that The Bahamas is the better choice for financial services.

This recognition not only reflects The Bahamas long history in providing financial services which dates back to the 1930’s, but is also reflective of the country’s historic commitment to maintain and grow its presence as a provider of high quality financial services. Since the 1930’s, The Bahamas has carved out a specialized niche as a leading offshore financial centre largely favored by South Americans, Canadian, European and US institutions. The Bahamas has around 250 licensed banks and trust companies of which 125 are subsidiaries of international organizations from 28 countries including Switzerland, Canada and the United States.

These institutions have combined balance sheet, assets of more than $300 billion and $1 trillion in assets under administration, according to The Central Bank of The Bahamas.

There are approximately 4,900 people employed in the banking and trust sector.

More than 800 lawyers belong to the Bahamas Bar Association.

More than 400 chartered accountants belong to the Bahamas Institute of Chartered Accountants.

The Bahamas maintains an A3 rating and positive outlook from Moody’s Investors Service.

There are many corporate vehicles providing a variety of investment strategies for international investors. These include the International Business Company or IBC and the Smart Funds.

The most popular of these is The International Business Company or IBC. The flexibility and attractive cost of the IBC have resulted in the predominant use of this vehicle in wealth management, with a wide variety of applications:

  • Holding company. In many instances the IBC is used as a holding company for assets such as property, securities investments or personal luxuries.
  • Investment fund. In the investment funds industry, the structuring of a fund that is simply a customized corporate or partnership entity allows access to specialized investment services and improved efficiencies in the delivery of investment management and administration services. The IBC is the vehicle of choice for such structures. The Bahamas Investment Funds Act provides a regulated environment at the cutting edge of modern investment fund administration.

Definitions of an International Business Company (IBC)

An IBC is a Company whose members have limited liability and which does not carry on business with persons resident in The Bahamas; nor does it carry on banking, trust, insurance or reinsurance business or provide a registered office for companies.
Important features of a Bahamian International Business Company are as follows:

  1. Shares may not be in bearer form;
  2. Exempt from taxation for 20 years;
  3. Exempt from Exchange Control Regulations;
  4. Exempt from Stamp Duty in The Bahamas, in respect of securities, shares and debt obligations;
  5. Save for the directors and officers filings, which must be filed annually at the Companies Registry. There is complete anonymity in that there are no reporting requirements to Government or the public in respect of identity of shareholders, officers, directors or Attorney in fact;
  6. Meeting of directors and shareholders may be held anywhere in the world and by telephone or other means. A resolution of directors or shareholders is approved by the affirmative vote of a simply majority;
  7. There need be no more than one director, which may be a corporate entity or a living person;
    An IBC may be wholly owned by a single person of any nationality and its share capital may be expressed in any currency;
  8. The use of words or letters as Gmbh, Limited, Ltd., Corp., Inc., S.A., etc are allowed, to denote Limited liability;
  9. IBC’s may change domicile to another jurisdiction by registering and continuing in another jurisdiction.
  10. Additionally, one or more IBC’s may merge or consolidate with another IBC or with one or more Bahamian or foreign companies, but in order to be in compliance, the surviving company must satisfy the requirements of the IBC Act;
  11. An IBC may purchase or redeem its own shares;
  12. Shares may have a stated par value or be of no par value;
  13. Government fees are extremely low. An IBC with a capital of $5,000.00 or less pays $350.00 per annum. If the share capital is $5,001.00 and above the annual fee is $1,000.00;
  14. IBC’s are quick to form, generally within one day, assuming the name chosen is available;
  15. The directors of an IBC have the power to transfer assets to Trustees within or outside The Bahamas for the benefit of its shareholders;
  16. An IBC can apply to The Bahamas Courts for an order to disregard the actions of a foreign Government which attempts to expropriate shares or assets of an IBC or otherwise harm the interest of the shareholders;
  17. Persons residing in The Bahamas do not pay income tax.

The IBC as a vehicle for Mutual Funds, Investments, Trust and Estate Planning

95% of the mutual funds incorporated in The Bahamas used the IBC as the vehicle of choice. The other 5% use the Smart Company which is used mainly by some Swiss clients.


Process and costs involved in establishing a Mutual Fund via IBC


  • Incorporation of IBC inclusive of Government
    fees depending on share capital.
  • $2,000

  • Professional service involved in drafting offering,
    memorandum, administrator’s agreement and marketing.
    (note this fee does not includes the administrator’s
    fee for approving these agreements).
  • $17,500

  • Opening bank accounts for the IBC (3) approx.
  • $2,500

  • Cost of translating documents plus $250 if documents
    need to be apostiled.
  • $350

  • The estimated annual cost of administrating the funds
    depends on its size and complexity. This estimated
    annual costs now prevailing in The Bahamian Mutual Fund
    industry per annum. This figure includes administrator’s
    fee, may include auditors fee, annual maintenance fee,
    Directors fee and annual Government fees as given above.
  • $36,000

  • In addition, the following fees are payable to The Bahamas International Stock Exchange (see www.scb.gov.bs):


  • Application fee
  • $730
  • Principal office fee
  • $500
  • Annual fee
  • $950

  • Additionally, the attorney for the IBC/Mutual Funds is paid a retainer of $2,500 – $5,000 per annum depending on the size of the fund.

    All Mutual Funds must be listed on The Bahamas International Stock Exchange. This automatically accords the international acceptance to the funds.

    Before any funds can be registered in The Bahamas its principals, Directors and Shareholders must comply with the Know Your Customer standard of The Bahamas. These are (albeit not exclusively):

    Acceptance of an Individual Customer

    § Copy of relevant pages of passport that provide the following information:
    Ø Full and correct name of person
    Ø Permanent address
    Ø Date & place of birth
    Ø Nationality
    Ø Signature
    § Telephone # (if any)
    § Fax # (if any)
    § Occupation and name of employer (if self employed nature of employment).
    § Banking reference
    § Character reference
    § Purpose of account and summary of anticipated activity
    § Source of funding and other infusions
    § Confirmation that all net funds belong to the client

    Acceptance of a Corporate Customer

    § Certified copy of incorporation.
    § Certified copy of Memorandum & Articles of Association
    § Location of Registered Office, Registered Agent
    § Resolution of Board of Directors authorizing opening of account and naming of authorized signatories
    § Certificate of Good Standing
    § Names and addresses of beneficial owners (except publicly traded companies)
    § Description and nature of business
    § Purpose of account and summary of anticipated activity
    § Source of funding and other infusions
    § Confirmation that all net funds belong to the corporate