Language: The official language is English.

Population: The population is approximately 340,000, and the majority live on the island of New Providence and Grand Bahamas Island.

Political System: The Bahamas was settled in around 1640 and has had a representative form of government since the 17th century. In July 1973, the Bahamas became an independent country within the British Commonwealth. The British government has appointed a governor-general who is responsible for external affairs, internal security and defence, but the real head of the government is an elected prime minister.

There are four political parties: the dominant Progressive Liberal Party, Free National Movement Party, United Bahamian Party and Labour Party.

Legal System: Bahamian law is based on British Common Law but is augmented by Bahamian statues. The highest tribunal is the Supreme Court; on the level beneath is the Court of Appeals; and finally there is the Magistrates Courts. The ultimate Court of Appeal is the Privy Council of the United Kingdom.

Taxation: The Bahamas does not have any tax agreements to avoid double taxation because it does not have any form of direct taxation. The main source of government revenues comes from customs duties and import taxes.

Incorporation: There are two types of companies available in the Bahamas: Companies incorporated under the Act of 1866 and the International Business Companies Act of 1989. Companies incorporated under the 1866 Act are mainly used by residents for carrying on a business in the Bahamas.

Companies can be incorporated under the International Business Companies Act of 1989 (IBC), as long as they do not carry on business in the Bahamas. The company is not allowed to own real estate in the Bahamas, and it cannot be an insurance or re-insurance company, a trust company or a bank.

An IBC can be incorporated with any name in any language, unless it indicates a connection with the royal family or government; for example, Chamber of Commerce, Bank or Building Society. The name must include a suffix to denote limited liability, Limited, Ltd., Corp., Corporation, Inc., Incorporated, S.A., GmbH, etc.

Requirements for a Bahamian IBC are:

• The company must have a registered office address in the Bahamas.
• A Registered Agent -- who must be either a lawyer, solicitor or law firm -- a licensed trust or a management company, is required.
• There must be at least one director, who can be either a person or a corporation. Alternate directors can be appointed as well as other officers, such as a company secretary.
• The company must maintain a register of directors at the registered office. The names and addresses of the directors and officers are not available to the public, even though this information may be lodged with the Registry if an official Certificate is required.
• The directors may hold meetings in the Bahamas or in any other country. An annual General Meeting is not required.
• The minimum number of shareholders, who can be individuals or corporations, is one.
• All issued shares must be fully paid for.
• The company must keep a register of members at the registered office; however, this information is not available to the public.

• The name of the company and the registered address in the Bahamas.
• The name and address of the Registered Agent.
• The authorized share capital and the currency in which the shares are to be issued.
• The classes of shares, the number of shares in registered and bearer form and whether these shares can be exchanged for each other. There should also be a notice provision for bearer shares.

The share capital of the company can be issued in any currency and of nominal or par value. There is no minimum capital requirement, but it is normal to incorporate a company with an authorized capital of US$ 5,000. This is the maximum authorized capital of nominal value for the minimum initial and annual duty of US$ 100. An authorized share capital of nominal value in excess of US$ 5,000 incurs an initial and annual duty of US$ 300.

An IBC is not required to file accounts nor file any annual returns. The company is totally exempt from any form of Bahamian taxes for a period of 20 years, but it is required to pay an annual licence fee of US$ 100 on a share capital of US$ 5,000 or US$ 300 if greater.

Summary

There are many advantages of incorporating in the Bahamas under the International Business Companies Act of 1989. The IBC is a world leader in the offshore industry because of factors such as:

• Maximum corporate flexibility
• Local confidentiality
• Total tax exemption for 20 years
• Bearer shares
• Immediate company availability
• Well-established professionals
• Excellent communications and commercial infrastructure
• Political and economic stability