The total population of about 300,000 is mostly accommodated on New Providence and Grand Bahama Islands. The constitution of the Bahamas comprises two chambers, with government based on the Westminster Model. The legal system is similar to that of England and much of English law has been adopted.
International Business Companies - "IBCs"
Offshore companies are known as International Business Companies and are created under the International Business Companies Act 1989 as amended by IBC (Amendment) Act 2001, with internal companies being governed by the Companies Act 1992.
The enactment of the new IBC Act 1989 has provided some very attractive features for the establishment and maintenance of companies that will not carry on trade within the Bahamas and are beneficially owned by non-residents.
The name of a company must include the word Limited, Corporation, Incorporated, Société Anonyme, etc., or the abbreviation.
The Memorandum of Association may include the standard objects clause; “that the company is to engage in any act or activity that is not prohibited under any laws for the time being in the Bahamas”. It is prohibited from carrying on the following types of business:
i) any business with Bahamian residents;
ii) owning real property in the Bahamas;
iii) trust business;
iv) the provision of registered office services
Share capital may be with or without par value, and issued in any currency. As there is a registration tax a standard minimum share capital of US$50,000 is often used. Members may be of any nationality and may be individuals or corporations. The minimum number is one. There is no requirement for an annual general meeting. Bearer shares are not allowed.
An IBC must always maintain a registered office and a registered agent in the Bahamas. There are no requirements to file annual returns or the company's financial statements in the Bahamas.
There must be one or more directors who may be individual or corporate. A director may appoint an alternate. Other officers may also be appointed. Subject to the Memorandum and Articles, the directors may convene meetings inside or outside the Bahamas.
A company incorporated outside the Bahamas shall be entitled to continue as a company incorporated under the IBC Act 1989 notwithstanding any provision to the contrary in the laws of the jurisdiction of incorporation.
Execution of Deeds Abroad
Any Bahamian company can by instrument, in writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney to execute deeds on its behalf in any place not situated in the Bahamas. Every deed signed by such an attorney on behalf of the company shall be binding on the company and shall have the same effect as if it was under the common seal of the company.
IBCs are exempt from all taxes and stamp duties for a twenty year period, including any taxes payable in regard to the holding, income from or transfer of its shares.
The Bahamas have no double taxation agreements with any other country. There is a treaty of mutual assistance with the USA, but fiscal matters are especially excluded.
Under the Bank and Trust Company Regulatory Act there are penal sanctions on those employed in banks and trust companies who wrongfully disclose information. It should also be noted that there is a reporting requirement on bank deposits of more than US$100,000. It is possible for foreign law enforcement agencies to obtain a court order demanding production of documents in criminal matters, although a very high standard of proof is required.