The Companies Act and the International Business Companies Act provide the legal framework by which domestic and international companies form and operate in The Bahamas. Depending on the type of company and its needs, incorporating under one Act or the other has advantages and restrictions. Businesses must be aware of Bahamian legal requirements so that they can enjoy the advantages of doing business in the Bahamas.
The Companies Act, 1992
A business which incorporates under the Companies Act, 1992 will operate as a domestic resident company in The Bahamas. Bahamian law does not require that a Bahamian citizen participate in or manage the company, but most “domestic companies,” as they are known, carry on local business.
The process for forming a domestic company is straightforward. Two or more people must fill out and sign a memorandum with details about the new company and submit it with the required affidavits, declarations, and fees to The Bahamas' Registrar-General. The Registrar General will issue a Certificate of Incorporation provided that the company has fulfilled all legal requirements for its incorporation.
Domestic companies must have at least two directors and must file an annual return that includes a list of the shareholders and a list of the directors and officers of the company. An annual fee is payable at the time of filing the return. There are few restrictions on the issuance of shares in the company. Shareholders can agree not to conduct an annual audit if they so choose, and there is no requirement to file financial statements as in some other countries.
The International Business Companies Act, 2000
Incorporating under the International Business Companies Act, 2000 is the most common means of conducting offshore business activities in The Bahamas. The Act governs private companies which are known as “IBCs”. The Bahamas has slightly different requirements for IBCs than for domestic companies. IBCs must have at least one director and two shareholders, who do not have to be Bahamian residents or citizens. The director can be an individual or a company. Shares must be registered and bearer shares are not permitted. There is no minimum capital requirement and no requirement to do audits.
IBCs require permission from the Central Bank of The Bahamas if they intend to do any business with Bahamian residents but they may own real property in the country. IBCs may rent office space in the Bahamas, use local professionals and registered agents, maintain Bahamian bank accounts, and own shares in other Bahamian companies.
Each type of Bahamian company has advantages and disadvantages for different types of businesses. To learn more, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.