Bahamas
Company formation

With a stable political system, the Bahamas prides itself on providing a conducive environment for international businesses. The nation boasts a robust financial sector that is well-regulated, ensuring transparency and trust for investors. The Bahamas’ strategic location serves as a gateway between the Americas, offering unparalleled access to markets in both North and South America. Moreover, the local government is committed to fostering a business-friendly ecosystem, facilitating processes and offering several incentives for foreign investors. Such dedication to international commerce underscores why the Bahamas is often considered a premier destination for global businesses.

Why opening a company in Bahamas

Establishing a company in the Bahamas is an astute choice for entrepreneurs looking for tax-friendly jurisdictions. Given its no personal income tax regime, the Bahamas is particularly suitable for high-net-worth individuals and corporations that aim to optimize their tax obligations. Furthermore, the country’s strategic location and established financial services sector make it an excellent base for enterprises involved in international trade, banking, and investments.

Advantages

Stable Political Environment

The Bahamas boasts a longstanding tradition of political stability, which provides a safe and predictable environment for businesses. The confidence in the governmental framework and institutions ensures a hassle-free experience for foreign investors and entrepreneurs.

Tax Benefits

One of the primary attractions of the Bahamas for businesses is its favorable tax regime. The country does not impose taxes on personal income, corporate earnings, capital gains, or inheritance, making it a tax haven for global investors.

Disadvantages

Limited Domestic Market

While the Bahamas offers a plethora of advantages, the size of its domestic market is relatively small. This limitation might pose challenges for businesses that rely heavily on local consumers.

Dependency on External Factors

The economy of the Bahamas is largely dependent on tourism and financial services. Any global downturn affecting these sectors can have repercussions on the local business environment.

Taxes

The Bahamian tax system is particularly enticing for global investors. The country does not levy personal income tax, corporate tax, capital gains tax, or even inheritance tax. However, businesses are subject to a license fee, the rate of which varies based on the type of business and its annual turnover. This system allows both individuals and corporations to optimize their tax obligations while ensuring compliance. The absence of direct taxation is balanced with other indirect taxes, like the Value Added Tax (VAT), to generate revenue for the country.

Company types in the Bahamas

Sole Proprietorship (SP)

A Sole Proprietorship is the simplest form of business structure in the Bahamas. It is owned and operated by a single individual who assumes all responsibilities and liabilities. The cost of incorporating a sole proprietorship is relatively low, and there is no minimum share capital requirement. However, it’s important to note that the owner is personally liable for all the business’s debts and obligations.

Partnership (P)

A Partnership is a business structure where two or more individuals or entities come together to carry out a business venture. In the Bahamas, partnerships can be classified as general partnerships or limited partnerships. In a general partnership, all partners have unlimited liability for the business’s debts. In a limited partnership, there are both general partners (with unlimited liability) and limited partners (with limited liability). The cost of incorporating a partnership is relatively low, and there is no minimum share capital requirement.

Private Company (LLC)

A Private Company, also known as a Limited Liability Company (LLC), is a popular business structure in the Bahamas. It offers limited liability protection to its owners, known as members, and has a separate legal existence from its owners. The cost of incorporating a private company may vary depending on various factors, such as legal assistance and regulatory requirements. The minimum share capital requirement depends on the specific regulations and industry.

Public Company

A Public Company in the Bahamas is a business entity that offers its shares to the public through an initial public offering (IPO) and is listed on a recognized stock exchange. Public companies have more stringent regulatory requirements and obligations compared to other business structures. The cost of incorporating a public company can be higher due to compliance and reporting requirements. The minimum share capital varies depending on the specific regulations and industry.

Exempted Company

An Exempted Company in the Bahamas is designed for international business activities and is typically used for holding assets, conducting investment activities, or operating in specialized industries. It enjoys certain tax advantages, such as exemption from local taxes and stamp duty. The cost of incorporating an exempted company may be higher due to specific requirements and regulatory compliance.

VAT in Bahamas

The Bahamas introduced a Value Added Tax (VAT) system in 2015. Currently, the VAT rate stands at 12%. This indirect tax is levied on the supply of goods and services and is borne by the final consumer. While direct taxes are absent, the VAT system serves as a significant source of revenue for the government.

Common questions