Bahamas offshore company formation

Starting a business in the Bahamas can still be attractive due to its investor-friendly climate, but the jurisdiction is no longer entirely tax-neutral. Recent reforms have introduced licence fees and, in some cases, corporate tax obligations to align with international tax standards.

1. Decide on Your Business Structure

The first step is choosing the right entity. Options include a sole proprietorship, a partnership, or a company incorporated under the Companies Act of 1992. For foreign investors, an International Business Company (IBC) remains a popular structure, providing flexibility and global recognition. However, IBCs are now subject to updated business licence requirements and, in some cases, taxation on foreign-sourced income, especially if they carry on business in or from The Bahamas.

2. Register Your Business

To operate legally, your company must be registered with the Registrar General’s Department. The process involves:

• Conducting a name search and reserving your company name.
• Submitting incorporation documents, including Memorandum and Articles of Association.
• Paying the required government fees, which vary depending on the company type and capital.

3. Obtain Necessary Licenses and Approvals

Typically, most businesses need a business license from the Department of Inland Revenue. There are also some situations where you will need only industry-specific authorizations, for example, from the Central Bank, Securities Commission, or Ministry of Tourism. Foreign investors may need to apply for approval from the Bahamas Investment Authority (BIA), especially for projects in sectors such as tourism, large-scale real estate, or other strategic industries.

4. Open a Business Bank Account

There are both local and international banks in the Bahamas that form a solid banking sector. The required documents for the opening of a corporate account include incorporation certified documents, beneficial ownership details, and compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.

5. Meet Tax and Compliance Obligations

Traditionally, the Bahamas did not levy corporate income tax. However, under the new Business Licence Act 2023, all companies carrying on business in or from The Bahamas must obtain a business licence and pay annual licence fees based on turnover. In addition, from 2024, new rules have been introduced requiring certain International Business Companies (IBCs) to pay taxes on foreign-sourced income, in line with global tax compliance standards.

Businesses must pay annual business licence fees and, if their annual turnover exceeds BSD 100,000, they are required to register for Value Added Tax (VAT), which is generally charged at 12% on most goods and services.

The procedure of starting a business in the Bahamas is simple and easy when the proper steps are followed, but success is mainly a matter of good planning and regulatory compliance. Most of the entrepreneurs cooperate with advisors like Offshore Company Services to get through the process quickly and to be sure that their business is geared for long-term growth in this attractive offshore jurisdiction.

=> Learn more: Doing Business in the Bahamas

Key sectors of the Bahamas economy include banking and finance, tourism, and shipping. The most common and most influential industries in the nation are described below:

1. Tourism Industry

Tourism is the most important industry and the largest employer, contributing more than 60% of the GDP. The islands are visited by millions of people each year due to the:

• Cruise tourism: Ports such as Nassau and Freeport are big cruise ship ports.
• Luxury resorts: Brands such as Atlantis Paradise Island and Baha Mar draw well-heeled visitors.
• Marine and eco-tourism: Activities such as snorkelling, scuba diving, and visits to marine reserves are popular.
• Events & festivals: Junkanoo, regattas, and cultural events also draw international visitors.

2. Financial Services

The Bahamas is a recognized offshore financial center, second only to tourism in terms of economic contribution. The financial services sector includes:

• Private banking and wealth management
• International business companies (IBCs)
• Trust services and estate planning
• Investment fund administration
• Insurance and reinsurance

3. Real Estate & Construction

Facilitated by foreign capital and tourist infrastructure, this is driven by:

• Luxury real estate: Private islands, beachfront villas, and condos target high-net-worth individuals.
• Infrastructure development: Hotels, resorts, marinas and commercial property.
• Second-home market: Appeal to North Americans and Europeans is driven by climate and tax policies.

4. Shipping & Maritime Services

The Bahamas is one of the world’s leading flags of convenience, with a large number of ships registered under the Bahamian flag. Key aspects include:

• International ship registry
• Maritime law and legal services
• Port operations and bunkering services

5. Agriculture and Fisheries

While small in scale compared to services, these sectors are vital for local livelihoods:

• Crops: Citrus fruits, pineapples, bananas, and vegetables.
• Fisheries: Spiny lobster (crawfish), conch, and scale fish are major exports.
• Aquaculture: Gaining traction to diversify food production and exports.

6. Digital Services and ICT

A growing but still developing sector, with emphasis on:

• E-commerce and fintech regulation
• Digital nomad visas ("BEATS" program)
• Online business incorporation platforms

=> Learn more: Business License Requirements in the Bahamas (latest update)

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.