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BAHAMAS
- POLITICAL CONDITIONS
- LEGAL ENVIRONMENT
- INTERNATIONAL BUSINESS COMPANY (IBC)
- ADVANTAGES OF THE BAHAMAS IBC
- CONSTITUTION OF IBC
- CAPITAL AND DIVIDENDS
- REGISTERED OFFICE
- REGISTERED AGENT
- DIRECTORS
- OFFICERS
- MEETINGS OF MEMBERS
- BOOKS AND RECORDS
- POWER OF ATTORNEY
- REGISTRATION FEE
- ANNUAL LICENSE FEE
- CERTIFICATE OF GOOD STANDING
- EXEMPTIONS
- REGISTRATION REQUIREMENTS
- REGISTRATION SET OF DOCUMENTS
BAHAMAS
The Bahamas are comprised of an archipelago of some 700 islands and 1800 cays dispersed over an area of 250,000 square kilometers and are located about 50 miles to the east of Florida. It is a democratic self-governing territory with a population of 270,000. The capital is in Nassau on the Island of New Providence. There are excellent communication system and convenient international flight links. Confidentiality laws are strictly enforced. The Bahamas does not exchange information with other countries with an exception of cases pertinent to illegal drug trafficking. Official currency – Bahamian Dollar and it is on par with the US Dollar. The official language of the Bahamas is English.
POLITICAL CONDITIONS
The Bahamas is a commonwealth, a self-governing independent state associated in a common allegiance to the British crown. It is an old parliamentary democracy with political and legal systems closely resembling those of the United Kingdom of Great Britain and Northern Island.
LEGAL ENVIRONMENT
The Bahamas' legal system is based on English Common Law, appeals being heard ultimately by the Judicial Committee of the Privy Council.
Comprehensive offshore legislation was passed in 1989. It includes an International Business Companies Act, known as an IBC Act of 1989. Local laws are based on the British common law. The Bahamas offers complete range of offshore products and services. Over 400 international banks are registered here, under the Banks and Trust Companies Regulations Act of 1965.
INTERNATIONAL BUSINESS COMPANY (IBC)
International Business Companies Act of 1990 regulates registration and functioning of an IBC. It allows for minimum reporting requirements and for maximum privacy conditions. IBC can be engaged in any business that is not illegal or otherwise prohibited by law. It is required that an IBC will maintain on the Bahamas a registered office address and appoint a local registered agent. For a more complete list of advantages of IBC see below.
For a tax-exempt status an IBC has to meet the following requirements:
- does not employ local population;
- does not invest in local real estate (office leasing is allowed);
- satisfy local requirements for banking, trust and insurance businesses.
| ADVANTAGES OF THE BAHAMAS IBC |
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- All profits of an IBC that are derived from outside of the Bahamas are
tax exempt; there are no inheritance, succession or gift taxes; no stamp
duties in respect to transfers and foreign exchange control regulations.
- Only one shareholder and a director would suffice for registration.
- An IBC may have shares issued in Bearer or Registered and in any
currency. Shareholders and directors can be individuals as well as
business entities.
- Data on owners and directors is not publicly available and will remain
confidential.
- No annual tax return requirement.
- There are no expressed capital requirements.
CONSTITUTION OF IBC
Two or more persons may, by subscribing to a Memorandum incorporate a company (S.3). Subject to any limitations in its Memorandum or Articles and IBC Act, a company has the power, irrespective of corporate benefit, to perform all acts and engage in all activities necessary or conducive to the conduct, promotion or attainment of the objects or purposes of the company (S.9 (1)).
Name of company
The word "Limited", "Corporation", "Incorporated", "Gesellschaft mit beschränkter Haftung", "Société Anonyme" or "Sociedad Anónima" or its respective abbreviation "Ltd.", "Corp.", "Inc.", "GmbH" or "SA" shall be at the end of the name of every company with limited liability, provided that a company incorporated under the laws of a jurisdiction outside The Bahamas and continued as a company incorporated under IBC Act may use the name designated in the articles of continuation (S.11 (1)).
No company shall be incorporated under a name that –
- is identical with that under which a company in existence is already
incorporated under IBC Act or registered under the Companies Act or so
nearly resembles the name of another company as to be calculated to
deceive, except where the company in existence gives its consent;
- contains the words "Assurance", "Bank", "Building Society", "Chamber of
Commerce", "Chartered", "Cooperative", "Imperial", "Insurance",
"Municipal", "Royal", "Trust", or a word conveying a similar meaning, or
any other word that, in the opinion of the Registrar, suggests or is
calculated to suggest the patronage of or any connection with Her
Majesty or any member of the Royal Family or the Government of The
Bahamas, a department thereof, a statutory corporation or board or a
local or municipal authority;
- Is indecent, offensive or, in the opinion of the Registrar is otherwise
objectionable (S.11 (2)).
The memorandum
The Memorandum shall include the following particulars-
- The name of the company;
- The location in The Bahamas of the registered office of the company;
- The location in The Bahamas of the registered agent of the company;
- The objects or purposes for which the company is to be incorporated;
- The currency in which shares in the company shall be issued;
- in the case of a company limited by shares, a statement of the
authorised capital of the company setting forth the aggregate of the par
value, if any, that the company is authorised to issue and the amount, if
any, to be represented by shares without par value that the company is
authorised to issue;
- in the case of a company limited by guarantee, a statement that each
member undertakes to contribute to the assets of the company, in the
event of a winding up during the time that he is a member, or within one
year afterwards, for payment of the debts and liabilities of the company
contracted before the time at which he ceases to be a member, and of
the costs, charges and expenses of winding up the company and for the
adjustment of the rights of the contributors amongst themselves, such
amounts as may be required, not exceeding an amount to be specified
therein;
- in the case of a company limited both by shares and by guarantee, the
statements referred to in above-mentioned paragraphs;
- in the case of an unlimited liability company, a statement that the liability
of the members is unlimited;
- Information about shares of the company (S.12 (1)).
The Memorandum shall be subscribed to by two persons in the presence of another person who shall sign his name as a witness (S.12 (3)).
Articles
The Articles, if not submitted for registration with the Memorandum shall be submitted within 30 days following the date of incorporation (S.13 (1)).
The Articles shall be subscribed to by two persons in the presence of another who shall sign his name as a witness (S.13 (2)).
Certificate of Incorporation
Upon the registration of the Memorandum, the Registrar shall issue a certificate of incorporation under his hand and seal certifying that the company is incorporated (S.14 (2)).
Where the Registrar issues a certificate of incorporation of a company, the company is, from the date shown on the certificate of incorporation, a body corporate under the name contained in the Memorandum with the full capacity of an individual who is sui juris, subject to any limitations imposed by the Memorandum and to the provisions of IBC Act (S.15).
A certificate of incorporation of a company issued by the Registrar shall be prima facie evidence of compliance with all requirements of IBC Act in respect of incorporation (S.16).
| CAPITAL AND DIVIDENDS |
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Shares and Capital
Subject to any limitations in the Memorandum or Articles, each share in a company shall be issued for money, services rendered, personal property (including other shares, debt obligations or other securities in the company), an estate in real property, a promissory note or other binding obligation to contribute money or property, or any combination thereof (S.19).
Subject to any limitations in the Memorandum or Articles, shares in a company may be issued for such amount as may be determined from time to time by the directors (S.20 (1)).
Where a company issues a share with par value, the consideration in respect of the share constitutes capital to the extent of the par value and the excess constitutes surplus (S.22 (1)).
A share issued as a dividend shall be treated for all purposes as having been issued for money equal to the surplus that has been transferred to capital upon the issue of the share (S.23 (1)).
A company may, by a resolution of directors, amend its Memorandum to increase or reduce its authorized capital, and in connection therewith, the company may –
- Increase or reduce the number of shares which the company may issue;
- Increase or reduce the par value of any of its shares; or
- Effect any combination of the above-mentioned (S. 24 (1)).
A company shall, in writing, inform the Registrar of any increase or decrease of its authorized capital within 30 days after the resolution (S.24 (3)).
Shares of a company are personal property and are not of the nature of real property (S.26).
Share Certificate
A company shall state in its Articles whether or not certificates in respect of its shares shall be issued. Where a company issues certificates in respect of its shares, the certificates shall be signed by two directors or two officers of the company, or by one director and one officer; or shall be under the common seal of the company evidenced by the signature of a director or officer of the company, and the Articles may provide for the signatures or common seal to be facsimiles.
A certificate specifying a share held by a member of the company shall be prima facie evidence of the title of the member to the share specified therein (S.27).
Share Register
A company shall keep one or more registers to be known as Share Registers (S.28 (1)). The Share Register may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company shall be able to produce legible evidence of its contents (S.28.(2)).
A copy of the Share Register, commencing from the date of the registration of the company, shall be kept at the office of the company (S.28 (3)).
Transfer of shares
Subject to any limitations in the Memorandum or Articles, registered shares of a company may be transferred by a written instrument of transfer signed by the transferor and containing, save in the case of bearer shares, the name and address of the transferee (S.30 (1)).
A share issued to bearer shall be transferable by delivery of the certificate relating to the share (S. 31).
Dividends
A company may, by a resolution of directors, declare and pay dividends in money, shares or other property (S.36 (1)).
REGISTERED OFFICE
A company shall at all times have a registered office in The Bahamas. The directors of the company may change the address of the registered office of the company, which change shall be notified to the Registrar (S. 38)).
| REGISTERED AGENT |
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A company shall at all times have a registered agent in The Bahamas (S.39 (1)).
No person shall act as registered agent unless
- he is a counsel and attorney or a firm of counsel and attorneys in active
practice;
- he is a public accountant or a firm of public accountants registered under
the Public Accountants Act;
- it is a bank or trust company licensed under the Banks and Trust
Companies Regulation Act; or
- it is an approved management company registered with the Registrar
(S.39 (2)).
The company shall notify the Registrar of any change in the name or address of the registered agent (S.39 (8)).
DIRECTORS
Subject to any limitations in its Memorandum or Articles or in any unanimous shareholder agreement, the business and affairs of a company shall be managed by a board of directors that consists of one or more persons who may be individuals or companies (S. 41).
The first directors of a company shall be elected by the subscribers to the Memorandum; and thereafter, the directors shall be elected by the members for such term as the members may determine and where permitted by the Memorandum or Articles of a company, the directors may also elect directors for such term as the directors may determine (S. 42).
The number of directors shall be fixed by the Articles and, subject to any limitations in the Memorandum or Articles; the Articles may be amended to change the number of directors (S. 43).
The directors shall have all the powers of the company that are not reserved to the members under IBC Act or in the Memorandum or Articles (S.44).
Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, the directors of a company may meet at such times and in such manner and places within or outside The Bahamas as the directors may determine to be necessary or desirable.
A director shall be deemed to be present at a meeting of directors if -
- He participates by telephone or other electronic means; and
- All directors participating in the meeting are able to hear each other and
recognize each other's voice and for this purpose participation constitutes
prima facie proof of recognition (S.47).
The quorum for a meeting of directors is that fixed by the Memorandum or Articles; but where no quorum is so fixed a meeting of directors is properly constituted for all purposes if at the commencement of the meeting one half of the total number of directors are present in person or by alternate (S 49).
OFFICERS
The directors may, by a resolution of directors appoint any person, including a person who is a director, to be an officer or agent of the company. The directors may remove an officer or agent, too (S. 52 (1), (3)).
Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, each officer or agent has such powers and authority of the directors, including the power and authority to affix the common seal of the company, as are set forth in the Articles or in any unanimous shareholder agreement or in the resolution of directors appointing the officer or agent, except that no officer or agent has any power or authority with respect to the matters requiring a resolution of directors (S.52 (2)).
| MEETINGS OF MEMBERS |
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Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, the directors of a company may convene meetings of the members of the company at such times and in such manner and places within or outside The Bahamas as the directors consider necessary or desirable (S.58 (1)).
Subject to a provision in the Memorandum or Articles or in any unanimous shareholder agreement for a lesser percentage, upon the written request of members holding more than 50 percent of the votes of the outstanding voting shares in the company, the directors shall convene a meeting of members (S. 58 (2)).
Subject to any limitations in the Memorandum or Articles, a member shall be deemed to be present at a meeting of members if -
- He participates by telephone or other electronic means; and
- All members participating in the meeting are able to hear each other and
recognize each other's voice and for this purpose participation constitutes
prima facie proof of recognition (S. 58 (3)).
A proxy who may speak and vote on behalf of the member may represent a member at a meeting of members (S.58 (4)).
The quorum for a meeting of members for purposes of a resolution of members is that fixed by the Memorandum or Articles; but where no quorum is so fixed, a meeting of members is properly constituted for all purposes if at the commencement of the meeting there are present in person or by proxy shareholders representing more than one-half of the shares of each class or series thereof (S. 60).
Except as otherwise provided in the Memorandum or Articles, all shares vote as one class and each whole share has one vote (S. 61 (1)).
BOOKS AND RECORDS
A company shall keep such accounts and records, as the directors consider necessary or desirable in order to reflect the financial position of the company (S. 65 (1)).
A company shall keep
- minutes of all meetings of directors, members, committees of directors,
committees of officers, committees of members;
- Copies of all resolutions consented to by directors, members,
committees of directors, committees of officers, committees of
members;
- A register of all its directors and officers (S.65 (2)).
There shall be kept at the registered office of the company
- the register of the directors and officers
- unless the company's Articles or a resolution of its directors filed with the Registrar provides otherwise, the books, records and minutes (S.65 (3)).
A company shall have a common seal and an imprint thereof shall be kept at the registered office of the company (S.65 (4)).
| POWER OF ATTORNEY |
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A company may, by an instrument in writing whether or not under its common seal, authorize a person, either generally or in respect of any specified matters, as its agent to act on behalf of the company and to execute contracts, agreements, deeds and other instruments on behalf of the company.
A contract, agreement, deed or other instrument executed on behalf of the company by an agent whether or not under his seal, is binding on the company and has the same effect as if the company executed it were under the common seal of the company.
A power of attorney applies both within and outside The Bahamas (S. 70).
REGISTRATION FEE
There shall be paid to the Registrar the following fees -
- $250 upon the registration by the Registrar of a company incorporated
under IBC Act the authorised capital of which does not exceed $50,000;
- $1,000 upon the registration by the Registrar of a company incorporated
under IBC Act the authorised capital of which exceeds $50,000 (S.102
(2)).
ANNUAL
LICENSE FEE
A company the name of which is on the Register on 31st December in any year, shall before 30th April of the following year, pay to the Registrar an annual licence fee as follows —
- $250 if a company’s authorised capital does not exceed $50,000 and its
shares have a par value;
- $1,000 if a company’s authorised capital exceeds $50,000;
- $350:
(i) if the shares or some of the shares of the company have no par value,
(ii) if the company is a company limited by guarantee,
(iii) if the company is a company limited both by shares and by guarantee, or
(iv) if the company is an unlimited liability company (S.103 (1)).
If a company fails to pay the amount due as the licence fee by the date specified in paragraph 1, the licence fee increases by 10 per cent of that amount (S.103 (2)).
If a company fails to pay the amount due as an increased licence fee under paragraph 2 by the 31st October, then, the licence fee increases by 50 per cent of the licence fee specified in paragraph 1 (S.103 (3)).
CERTIFICATE OF GOOD STANDING
The Registrar shall, upon request by any person issue a certificate of good standing under his hand and seal certifying that a company incorporated under IBC Act is of good standing if the Registrar is satisfied that —
- the name of the company is on the Register; and
- the company has paid all fees, licence fees and penalties due and
payable (S. 112 (1)).
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