Bahamas Company Formation Frequently asked questions (FAQs)

The Bahamas Value Added Tax (VAT) is a significant portion of the nation’s tax structure and has an impact on companies and consumers. It is a value-added tax and is levied on most supplies of goods and services sold for consumption in the country.

Important Aspects of VAT in the Bahamas:

• Current VAT Rate: As of 2025, the standard VAT rate is 10%, reduced from the previous 12% (effective since January 2022).
• VAT Registration: VAT registration is mandatory for businesses whose annual turnover exceeds BSD 100,000.
• Taxable Transactions:
• Domestic sale of goods and services.
• Import of goods into the Bahamas.
• Exemptions and Zero-Rated Supplies:
• Financial services.
• Medical and educational services.
• Certain exports may be zero-rated.
• VAT returns: Companies registered are required to file periodic returns with the Inland Revenue Department.
• Compliance: Not complying with VAT obligations may attract penalties, interest or cancellation of business operations.

For those who are opening a business or an offshore company in the Bahamas, dealing with VAT can be quite a crucial matter. However, the Bahamas is income and capital gains tax neutral, with VAT attached to local activities. Work with a credible corporate service provider such as Offshore Company Corp to be fully compliant and tax-efficient.

The Bahamas is one of the finest places for business entities to protect their intellectual property, considering that there is a strong legal system to safeguard branding. Offshore Company Corp provides expert guidance on these steps to maintain compliance and safeguard business properties to the best standard.

Its Bahamas brand logo needs to be trademarked primarily to protect its use as a brand mark. The Trade Marks Act, 2024, under the Bahamas Intellectual Property Office (BIPO), governs the registration of trademarks with exclusive use rights of the logo for specific goods or services and preventing consumer confusion. Trademarks, including word marks and figurative marks, are first-to-use registered and renewable for 10 years indefinitely. Copyright protection, under the Copyright Act, is extended automatically to original works of art, i.e., logos, for the lifetime of the creator plus 70 years. Yet, copyright only protects the creative expression of the logo, not its commercial application, restricting its use for branding. For full protection, companies can trademark a logo for brand recognition and copyright it if it amounts to an original artistic work. The Nice Classification system currently accommodates service marks, widening the choice for service-oriented firms. Registration entails filing applications to BIPO, costing USD 200-400, and taking 6-12 months. Unregistered logos have recourse to common law passing off, which provides weaker protection.

Offshore Company Corp provides customized solutions to obtain trademark and copyright protection for logos in the Bahamas, in compliance with local law. Call their team to protect your brand and maximize your intellectual property strategy.

If you are planning to start an offshore company in the Bahamas, here are some thing you should know about:

The taxation system is the most appealing factor for starting an offshore company in the Bahamas. This country offers zero taxation for corporate tax, income tax, capital gains tax, royalty tax, dividend and interest tax. Furthermore, these terms apply to both resident and non-resident businesses on the islands.

The cost of forming an offshore company in the Bahamas is low, as are the expenditures of maintaining the company. It takes around 7 to 14 working days for your application to be processed.

Offshore companies in the Bahamas can enjoy a high level of privacy, which is optimal for asset protection and retaining confidentiality of personal information. Remarkably, The 1990 International Business Companies Act of the Bahamas prohibits the exchange of knowledge on companies in the Bahamas with any other country.

How to start an offshore company in the Bahamas with One IBC:

1. Preparation

• Request free company name search. We check the eligibility of the name, and make suggestions if necessary.

2. Filling

• Register or login and fill in the company names and director/ shareholder(s).
• Fill in shipping, company address or special request (if any).

3. Payment

• Choose your payment method (We accept payment by Credit/Debit Card, PayPal or Wire Transfer).

4. Delivery

• You will receive soft copies of necessary documents including: Certificate of Incorporation, Business Registration, Memorandum and Articles of Association, etc. Then, your new company in the Bahamas is ready to do business!

Apart from being an exceptional tourist country with stunning beaches, The Commonwealth of The Bahamas, commonly known as The Bahamas, is also famous for its attractive conditions to international investors who wish to start a business in the Bahamas. Here are all the steps and their associated costs to start a business in the Bahamas:

1. Check for an available company name: BSD 25
2. File the memorandum and articles of association: approx. BSD 650
3. Pay stamp duty on the memorandum to the Public Treasury: starting from BSD 100
4. File your company documents at the Companies Registry: BSD 1,000
5. Get the National Insurance Number (NIN) from the National Insurance Board: 0
6. Obtain a business license and VAT: 0

In comparison, the cost to start a business in the Bahamas is among the cheapest in the world. It is even lower considering all the benefits the country offers to international businesses here. If you are looking for a trusted corporate service provider to help you start a business in the Bahamas, check out One IBC’s Bahamas company formation service.

A bearer share is an equity security that is entirely owned by the person or company who carries the physical stock certificate. Since the share is not registered with any authority, the easiest way to transfer ownership is to present the physical paperwork.

When register a company in Bahamas, many businesses do not know if bearer shares are permitted in the Bahamas or not. To answer this question, the country used to allow bearer shares, but had eliminated them in 2000. All bearer shares prior to that have been recalled on June 30 2001. These changes were made in the International Business Company (IBC) Act 2000 as a repeal of the IBC Act 1989, with a view to improve the business law as well as gain trust from international investors. The Act also stated that there must be at least one shareholder in the company, and the beneficial owners of a corporation must be revealed to the registered agent, but they are not on public record.

The elimination of the Bahamas bearer shares has addressed issues of transparency raised by the FSF, FATF, and OECD in relation to the identification, recording, and dissemination of pertinent information about legal and business entities.

The Bahamas earned its tax haven reputation due to its foreign investor-friendly tax and business legislation. This is due to the fact that personal income, inheritance, gifts, and capital gains are not taxed in the Bahamas. Other taxes, including value-added tax (VAT), property taxes, stamp taxes, import tariffs, and license fees are the source of income for the government.

Because of its reputation for stability, the Bahamas is an international hub for banking operations that attracts global financial organizations. Consequently, this attracts many companies and wealthy foreigners . With a per-capita GDP of $34,863.70 in 2019, the Bahamas are the third wealthiest country in the continent, after the United States and Canada.

No tax or only nominal taxes - Although the tax system differs by nation, all tax havens promote themselves as a place where non-residents may avoid paying high taxes by placing their assets or companies there. As a matter of fact, even well-regulated nations, although not classed as tax havens, still offer tax advantages to encourage foreign investment.

High information privacy - Financial information is fiercely protected in the Bahamas tax havens. The Bahamas have explicit legislation or administrative processes in place to protect information from international influence and spying.

No local residency - Foreign entities are usually not required to have a significant local presence in the Bahamas. Within its borders, there is no need to produce products or services, or to conduct trade or commerce as well as any local representative or office.

To get a business license in the Bahamas, non-Bahamians must first submit a Project Proposal to the Bahamas Investment Authority (BIA). Non-Bahamians must have a minimum capital investment of BS$500,000 outside of “Bahamians only” areas.

The BIA will examine the application and forward it to the National Economic Council for review as well as these Government Ministry or Agency depending on the nature of the proposed commercial activity:

• Ministry of the Environment.
• Ministry of Works and Transport.
• Ministry of Housing.
• Respective Family Island Local Government.

The BIA will notify the applicant in writing once a decision has been reached. They also collaborate with other government departments and support the project after permission is granted.

A Business Licence Unit office (BLU) can provide the application form. Complete and submit the application form to the BLU, a Treasury Office, or a Family Island Administrator. This form also includes the registration of a business name. If the name is rejected, the applicant will be informed and directed to choose from the remaining options on the form.

These documents have to be attached to the application:

• Identification papers
• Appropriate Registration Fee
• Other industry specific Approvals

The application is completed within 7 working days if there is no problem. The applicants will be contacted by the BLU to notify them that they may pick up their Bahamas business license.

The Registrar General Office is where public trading firms, limited liability partnerships, and limited liability companies register and obtain their certificate of incorporation. Then this is delivered to the BLU office.

The Bahamas has a relatively low tax rate. In summary:

• Income, dividends, capital gains, wealth and inheritance are all tax-free.
• There is a 12% VAT on nearly all products and services, with the exception of food and some medical services.
• On real estate transactions over $100,000, there is a 10% stamp duty.
• On owner-occupied real estate, an annual property tax of around 1.5 percent is levied.
• Many items have import taxes ranging from 25% to 40%.

The Bahamas may appear to be a tax-free haven on the surface, but to actually benefit from this jurisdiction’s tax system, the help of a professional like One IBC is strongly advised.

Businesses in the Bahamas are not subject to corporation or withholding taxes. Business license fees, stamp duty, property tax, and import tariff are all taxes that influence businesses. The majority of offshore or non-resident entities are free from business license fees and stamp duty. The government charges corporate entities fees for incorporation or registration.

On June 4th 2021, the G7 leaders decided to support proposals to overhaul the global tax system by introducing a worldwide minimum corporate tax rate of 15% for multinational corporations. However, the Bahamas maintains its sovereign right to select the appropriate tax system for the country's long-term growth.

Sales tax is a government-imposed consumption tax on the selling of goods and services. A traditional sales tax is imposed at the time of sale, collected by the shop, and then forwarded to the government. A company is liable for sales taxes in a particular jurisdiction if it has a nexus there, which can be a physical location, an employee, an associate, or some other kind of presence, depending on the rules in that country.

There is no sales tax in the Bahamas. Rather, the government imposes a value-added tax (VAT) on nearly all products and services.

Almost all products and services imported, bought, and sold in The Bahamas are subject to Value Added Tax (VAT). VAT rate is charged at 10%. However, goods shipped to clients in other countries are not charged with VAT.

A company is allowed to charge VAT only when it is VAT-registered. If it is obliged to be registered for VAT (mandated) and does not register, the company will still be responsible for any VAT (plus interest and penalties) even though it did not charge any. Therefore, it's critical to register as soon as possible (when the threshold is reached). Charging VAT without registering is a severe offense that can result in fines or imprisonment.

There are no income, capital gains, wealth, inheritance, succession, gift, or unemployment taxes in the Bahamas. In The Bahamas, foreign businesses are not taxed on their earnings, although they may be compelled to make national insurance contributions. Employees and employers must pay tax rates with 3.9% and 5.9% of their earnings, respectively, up to a maximum annual earnings of 670 Bahamian dollars (BSD) each week or 2,903 per month. This maximum level was set in 2018, and will be subject to a two-year rise based on the projected growth in average salaries. Although, due to the Covid pandemic, there was not a new level in 2020.

All non-residents in The Bahamas must be taxed with real estate interests. The Department of Inland Revenue has the authority to evaluate and reassess the value of any property that has grown. The maximum amount of property tax that may be assessed each year is $50,000.

Bahamas property taxes are usually issued in mid-October and must be paid by the end of December in the following year. The property owner is responsible for making sure that the taxes are paid on time (can be in either Bahamian or US dollars). Failure to pay taxes on time will result in a 5% annual penalty until payment is made. Below are the rates for commercial properties:

• Below $500,000 - 1% of the market value
• Above $500,000 - 2% of the market value

Yes, a foreigner can open a business in the Bahamas. The Bahamas is generally open to foreign investment and business ownership. However, there are specific steps and requirements that you need to follow:

1. Choose a Business Structure: You can establish a business in the Bahamas as a sole proprietor, partnership, or corporation.
2. Reserve a Business Name: You must ensure that the business name you choose is unique and not already in use. You can reserve a business name with the Registrar General's Department.
3. Register Your Business: To formally register your business, you need to apply for the necessary licenses and permits. The specific requirements may vary depending on the type of business you plan to start. The Bahamas Investment Authority (BIA) can provide guidance on these requirements.
4. Apply for a Work Permit: If you are a non-Bahamian planning to work in the business you've established, you'll need to obtain a work permit. The Bahamas Department of Immigration handles work permit applications.
5. Comply with Taxation: Ensure that you are compliant with Bahamian tax regulations. The Bahamas has no personal income tax, but there are various business taxes and fees that you may need to pay.
6. Open a Bank Account: You'll need a local bank account for your business transactions. Many Bahamian banks offer business banking services to foreigners.
7. Obtain Necessary Licenses and Permits: Depending on your business type, you may need specific licenses and permits, such as a business license, health permit, or trade license.
8. Consider Legal Advice: It's advisable to seek legal advice when starting a business in a foreign country to ensure compliance with all local regulations and laws.

The specific steps and requirements may vary based on the nature of your business, and it's essential to research and consult with local authorities or legal experts for the most up-to-date and accurate information. Additionally, it's important to be aware that the Bahamas government periodically updates its policies and regulations related to foreign investment, so it's a good idea to check for the latest requirements and restrictions before starting a business there.

Setting up an International Business Corporation (IBC) in the Bahamas involves several steps and compliance with local regulations. Here is a general guide on how to set up an IBC in the Bahamas:

• Choose a Name for Your IBC: Select a unique name for your IBC that is not already in use.
• Appoint a Registered Agent: You must appoint a registered agent who is authorized to provide services in the Bahamas. This agent will assist with the registration process and ongoing compliance.
• Prepare the Memorandum and Articles of Association: Draft the Memorandum and Articles of Association for your IBC. These documents outline the company's purpose, structure, and operation. You may need legal assistance for this step.
• Shareholder and Director Requirements: The Bahamas allows for a single shareholder and director, and they can be of any nationality.
• Registered Office: You must have a registered office in the Bahamas. Your registered agent typically provides this service.
• Capital Requirements: There are no specific minimum capital requirements for an IBC in the Bahamas.
• Submit the Registration Documents: Submit the registration documents, including the Memorandum and Articles of Association, to the Registrar General's Department in the Bahamas. You will need to pay the relevant registration fees.
• Obtain a Business License: Some IBCs in the Bahamas may require a business license, depending on the type of activities they intend to conduct. Check with local authorities to determine if your IBC needs one.
• Open a Bank Account: You'll need to open a bank account in the Bahamas for your IBC. The specific requirements can vary between banks, so it's advisable to contact a local bank for details.
• Tax Considerations: Bahamas IBCs are typically tax-exempt in the Bahamas. However, tax regulations can change, so it's essential to stay updated on the tax environment.
• Maintain Compliance: To maintain your IBC's status, you must fulfill ongoing compliance requirements, such as filing annual returns and maintaining records at the registered office.
• Renewal: The Bahamas requires annual renewal of IBCs.

Please note that the requirements and regulations for setting up an IBC in the Bahamas can change. Contact us at Offshore Company Corp to consult with our experts in Bahamian business regulations when you set up your IBC in the Bahamas.

Yes, you can have a LLC in the Bahamas. However, according to Bahamian Law, Limited Liability Companies (LLC) can be formed under the Companies Act of 1992 for local operations or under the International Business Companies Act of 2001 for international business companies (IBC).

An IBC in the Bahamas is a popular choice for offshore companies due to its flexibility and favorable tax treatment. It offers limited liability to its shareholders and directors, making it similar in many ways to an LLC in other jurisdictions.

If you're interested in establishing a limited liability entity in the Bahamas, the IBC is the appropriate choice. It provides a similar level of personal liability protection and is specifically designed for international business activities. However, please keep in mind that the regulations and requirements for IBCs in the Bahamas can change, so it's advisable to consult with a local advisor who is well-versed in Bahamian corporate law to ensure that your business structure aligns with current regulations and requirements. Contact us now to register a company in the Bahamas!