Formerly a British Crown colony, the Commonwealth of The Bahamas became an independent state in 1973, retaining Queen Elizabeth II as its monarch. The Bahamas has a political and legal system that closely follows the UK system with English Common Law applying. The official language of the Bahamas is English.
The Bahamas is a tax-neutral international financial centre with no personal or corporate taxes, no capital gains, transfer or inheritance taxes. There is no exchange control for non-residents. The repatriation of foreign investment funds, foreign assets and dividends or profits arising from foreign investment is permitted. The Bahamian dollar (BSD) has been the currency of The Bahamas since 1966. The BSD is pegged to the US dollar on a one-to-one basis.
The Bahamas is a progressive financial centre with modern infrastructure, a professional workforce, and proximity to key markets. It features a number of innovative financial products including ‘SMART’ and ‘ICON’ investment funds, and Bahamas Executive Entities (BEEs). The securities sector is a dynamic and growing part of the financial services industry.
Licensed by Securities Commission, Bahamas Central Bank
Regulation
The Bahamas is a well-regulated jurisdiction within the international financial services community. It commenced the automatic exchange of financial information with other jurisdictions on an annual basis under the OECD/G20 Common Reporting Standard (CRS) in 2018. It is also rated ‘Largely Compliant’ by the OECD Global Forum for Exchange of Information on Request.
A member of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) since 2017, the Bahamas has also signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Multilateral Competent Authority Agreement (MCAA).
In February 2020, the Bahamas was removed from European Union’s ‘grey list’ (Annex II) of non-cooperative tax jurisdictions that have made a high-level commitment to comply with the required criteria within an agreed timeframe. A country is removed from this list when it has addressed the issues of concern for the EU and brought its tax system fully into line with the required good governance criteria.
The Register of Beneficial Ownership Act 2018 provides for the establishment of a secure search system by the Attorney General of The Bahamas of databases managed by registered agents that hold beneficial ownership information of the legal entities that they manage.
The Multinational Entities Financial Reporting Act 2018 provides for country-by-country reporting of profit or losses of entities incorporated or resident within The Bahamas that are a part of a multinational group with consolidated group revenue of €750 million or more during the previous fiscal year.
The Commercial Entities (Substance Requirements) Act 2018 provides for substantial economic presence and annual reporting of entities carrying on certain activities that are incorporated, registered or continued under the Companies Act 1992 or the International Business Companies Act 2000.
The Removal of Preferential Exemptions Act 2018 was designed to address the ‘harmful tax’ practice known as ‘ring-fencing’ by removing preferential tax exemptions that were available to non-residents – companies and other entities established in the Bahamas but carrying out activities outside the Bahamas and not authorised to conduct business in the Bahamas – but not available to residents.
The Securities Commission of The Bahamas (SCB) is an independent body, charged with the responsibility for providing regulatory oversight for developing capital markets, including investment funds.
Sovereign (Bahamas) Ltd is licensed by the SCB as a Financial Corporate Service Provider (Licence No. 153 / File No.157) to provide:
- Corporate Services for International Business Companies (IBCs) – Registration, management or administration, and acting as registered agent or registered office
- Corporate Services for Private Trust Companies (PTCs) – Acting as registered agent or registered office
- Corporate Services for Bahamas Executive Entities (BEEs) – Acting as registered agent
- Corporate Services for Segregated Accounts Companies (SACs) – Registered representatives
- Corporate Services for Foundations – Acting as registered agent
- Corporate Services for Purpose Trusts – Acting as a trustee
Time
The Bahamas Time Zone is Eastern Standard Time (GMT-5)
Useful Links
The Ministry of Financial Services, Trade & Industry and Immigration – https://mofstii.gov.bs/
Bahamas Investment Authority (BIA) – www.bahamas.gov.bs/bia
Securities Commission of The Bahamas – www.scb.gov.bs
Central Bank of The Bahamas – www.centralbankbahamas.com
Bahamas Financial Services Board – www.bfsb-bahamas.com
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