The Bahamas, one of the most mature offshore financial centres, owes its development to a number of enduring features. These features, while encouraging the general development of the nation of islands, have spurred the development of the financial services sector in particular. This sector, with over 40 years of steady growth and experience in the offshore banking and trust industry, is the second leading contributor to the economy of The Bahamas, employing more than 10% of the country's labour force and comprising 12% of GDP ($340 million).
The financial centre of The Bahamas has consistently attracted well-established, internationally-recognised financial institutions and substantial investors. The centre, which manages assets of about $200 billion, offers the following benefits:
• A convenient location, just 50 miles from the mainland United States, coupled with an inviting climate.
•A commitment to zero taxation, offering freedom from taxes on income, capital gains, profits, gifts, inheritance and estates, as well as no withholding taxes on dividends, interest or royalties, and no payroll taxes.
•Strict enforcement of the complete confidentiality of banker-customer relations, through both common law and statue.
•A progressive, state of the art telecommunications system.
•A stable economic and political environment.
•Readily available professional services: legal, accounting, insurance, and management.
The Bahamas' Financial Centre offers a variety of services to the international community. These services are being strengthened continuously through the Government's partnership with the private sector. Represented by The Bahamas Investment Authority, incorporating the Financial Services Secretariat, the Government has reaffirmed its commitment to maintaining and improving The Bahamas' role as a sophisticated offshore finance centre, through the introduction of new and innovative legislation and the strengthening of existing legislation.
The Bahamas is poised to offer opportunities to innovative, progressive investors. The financial services sector is a haven to such investors.
Up-to-Date Legislation
The legislative framework governing the activities of the financial services industry is modern and accommodating. Representatives of the private sector are regularly consulted in a continuous effort to keep financial services legislation abreast of changing investor requirements.
Non-residents who do business in The Bahamas enjoy considerable freedom from exchange controls. The repatriation of foreign investment funds, foreign assets and dividends, and profits arising from foreign investment is allowed and facilitated.
Bahamian law strongly protects the right to confidentiality and privacy of bank clients and further protects the security and good name of investments in The Bahamas. Legislation criminalising money laundering in The Bahamas has strengthened the jurisdiction's reputation for being clean, reputable, and worthy of the full confidence of discerning international investors and business persons.
Recent changes in legislation include passage of the Mutual Funds Act, governing the establishment of mutual funds, and a new Trustee Act was recently introduced in Parliament. The International Business Companies (IBCs) Act 1989 provides the offshore financial sector with a corporate vehicle that is flexible and cost-effective. More than 36,000 IBC's have registered since 1990, many in the areas of mutual funds and portfolio management services.
Currently under development is a stock market that will allow closed-end mutual funds to register in The Bahamas. .
No Taxation
With no personal or corporate income, capital gains, estate, gift, or inheritance taxes, the Bahamas offers an ideal tax environment.
A Strong Work Force
One of the greatest assets of the Bahamian economy is its large, skilled workforce. The nation enjoys an adult literacy rate of 95%, and The Bahamas Institute of Bankers sponsors academic programs in conjunction with The College of The Bahamas that are designed to keep the nation's workforce competitive with any in the world.
The professional community of accountants, international bankers, trustees, and investment specialists is large, diverse and highly skilled. There is also a full complement of respected and experienced law firms.
Types of Licenses Issued
As stipulated by The Banks and Trust Companies Regulation Act, banks and trust companies are issued licenses to operate in The Bahamas under the following designations:
Agent
An Authorized Agent is a bank or trust company authorized by The Exchange Control Department to deal in Bahamian and foreign currency securities and to receive securities into deposits (to act as custodians) in accordance with the terms of The Exchange Control Regulations Act 1956 and The Exchange Control Notices, issued from time to time by The Central Bank of The Bahamas.
Authorized Dealers & Authorized Agents
Authorized Dealers & Authorized Agents provide the services of both Dealers and Agents.
Public Licensee
A Public Licensee is a corporation permitted to carry on banking and/or trust business with members of the public. The company's Exchange Control designation determines whether the licensee is "resident" or "non-resident."
Resident
A Resident bank or trust company is one that can deal only in Bahamian Dollars, but they can operate in foreign currencies with the authorization of Exchange Control. Trust Companies with resident status are allowed to deal in foreign currency securities on behalf of non-resident customers.
Non-Resident
A Non-Resident bank and/or trust company is one which can operate only in foreign currencies, but may hold a Bahamian Dollar account, with Exchange Control approval, to pay local expenses.
Restricted
A Restricted bank and/or trust company is one which is allowed to carry on business for specified persons, usually named in the license.
Non-Active
A Non-Active company is one which is either in voluntary liquidation or wishes to keep the word "bank" or "trust" in the company's name, even though it is not carrying on any banking or trust company business.
Nominee
A Nominee company is one which holds securities and other assets in its name on behalf of clients of its parent bank or trust company.
Minimum Capital Requirements for Licenses
Public Categories
Bank only: $1,000,000.00
Bank & Trust: $1,000,000.00
Trust only: $1,000,000.00
Restricted Categories
Bank only: $100,000.00
Bank & Trust: $100,000.00
Trust only: $100,000.00
Nominee Trust: $10,000.00
Non-Active Categories
No minimum capital requirement is stipulated.
Application Procedure
The following information is required on the application for license: •Name of the bank or trust company.
•Address of head or registered office.
•If head or registered office is outside The Bahamas:
a) address of principal office in The Bahamas;
b) name of the officer who is to be the bank's or trust company's authorized agent in The Bahamas;
c) name of the other officer who, in the absence or inability to act of the officer named under (b) above, is to be the bank's or trust company's authorized agent in The Bahamas.
• Financial year of the bank or trust company.
At some point, the principal(s) of the bank or trust company will be required to have a personal interview with the Central Bank.
Additional particulars to be supplied by applicants for licenses other than banks or trust companies specified in the Schedule of the Act:
•Name, address, and professional qualifications of auditor or auditors.
•Full name, with addresses, nationalities, and references, of all persons who are directors, partners, managers, or officers.
•Names, with addresses and nationalities, of all persons who are shareholders.
•Names of all subsidiary companies of the applicant, with addresses of their registered offices.
•Copy of the act, charter, certificate of incorporation or memorandum or association and articles of association or partnership agreement of the applicant, as may be appropriate, verified by a statutory declaration made by a director, secretary, or partner and duly authenticated as follows:
a) in the came of a company incorporated in The Bahamas, certified in accordance with the provisions of Section 16 of the Companies Act;
b) in the case of a foreign company, certified and authenticated under public seal of the country, city or place under the laws of which such company has been incorporated;
c) in any case, authenticated in like manner to a deed or document when required to be registered under the provisions of the Registration of Records Act.
• References, including one from a bank or trust company.
•Status for the purposes of the Exchange Control Regulations Act and any regulations made thereunder and in force at the date of the application.
•True and complete yearly statement of the accounts certified by a director and the auditor that such statement is properly drawn up, so as to exhibit a true and correct view of the state of the applicant's affairs in respect of:
a) the accounts of the last financial year;
b) the accounts of the penultimate financial year.
• Statement of assets and liabilities at the end of the month prior to the submission of the application certified by a director or senior officer.
•Statement of capital or any other income held, directly or through a subsidiary or a nominee, as an asset of the applicant.
License Fees for Financial Institutions
The following annual fees apply to banks and trust companies:
Authorized Agents & Authorized Dealers: $160,000.00
Authorized Dealers: $100,000.00
Authorized Agents: $ 60,000.00
Other Public Institutions: $ 25,000.00
Restricted Bank & Trust: $ 5,000.00
Restricted Bank: $ 5,000.00
Restricted Trust: $ 2,500.00
Trust (Nominee): $ 2,500.00
Non-Active Bank & Trust: $ 1,000.00
Non-Active Bank: $ 1,000.00
Non-Active Trust: $ 1,000.00
Applications should be sent to The Central Bank of The Bahamas, which can also provide additional details on the application process.
The Central Bank of The Bahamas
Banks Supervision Department
Frederick Street
P.O. Box N4868
Nassau, N.P., The Bahamas
Tel: (242) 322-2193-6
(242) 322-2130-9
(242) 322-2526-7
Fax: (242) 322-4321
The financial centre of The Bahamas has consistently attracted well-established, internationally-recognised financial institutions and substantial investors. The centre, which manages assets of about $200 billion, offers the following benefits:
• A convenient location, just 50 miles from the mainland United States, coupled with an inviting climate.
•A commitment to zero taxation, offering freedom from taxes on income, capital gains, profits, gifts, inheritance and estates, as well as no withholding taxes on dividends, interest or royalties, and no payroll taxes.
•Strict enforcement of the complete confidentiality of banker-customer relations, through both common law and statue.
•A progressive, state of the art telecommunications system.
•A stable economic and political environment.
•Readily available professional services: legal, accounting, insurance, and management.
The Bahamas' Financial Centre offers a variety of services to the international community. These services are being strengthened continuously through the Government's partnership with the private sector. Represented by The Bahamas Investment Authority, incorporating the Financial Services Secretariat, the Government has reaffirmed its commitment to maintaining and improving The Bahamas' role as a sophisticated offshore finance centre, through the introduction of new and innovative legislation and the strengthening of existing legislation.
The Bahamas is poised to offer opportunities to innovative, progressive investors. The financial services sector is a haven to such investors.
Up-to-Date Legislation
The legislative framework governing the activities of the financial services industry is modern and accommodating. Representatives of the private sector are regularly consulted in a continuous effort to keep financial services legislation abreast of changing investor requirements.
Non-residents who do business in The Bahamas enjoy considerable freedom from exchange controls. The repatriation of foreign investment funds, foreign assets and dividends, and profits arising from foreign investment is allowed and facilitated.
Bahamian law strongly protects the right to confidentiality and privacy of bank clients and further protects the security and good name of investments in The Bahamas. Legislation criminalising money laundering in The Bahamas has strengthened the jurisdiction's reputation for being clean, reputable, and worthy of the full confidence of discerning international investors and business persons.
Recent changes in legislation include passage of the Mutual Funds Act, governing the establishment of mutual funds, and a new Trustee Act was recently introduced in Parliament. The International Business Companies (IBCs) Act 1989 provides the offshore financial sector with a corporate vehicle that is flexible and cost-effective. More than 36,000 IBC's have registered since 1990, many in the areas of mutual funds and portfolio management services.
Currently under development is a stock market that will allow closed-end mutual funds to register in The Bahamas. .
No Taxation
With no personal or corporate income, capital gains, estate, gift, or inheritance taxes, the Bahamas offers an ideal tax environment.
A Strong Work Force
One of the greatest assets of the Bahamian economy is its large, skilled workforce. The nation enjoys an adult literacy rate of 95%, and The Bahamas Institute of Bankers sponsors academic programs in conjunction with The College of The Bahamas that are designed to keep the nation's workforce competitive with any in the world.
The professional community of accountants, international bankers, trustees, and investment specialists is large, diverse and highly skilled. There is also a full complement of respected and experienced law firms.
Types of Licenses Issued
As stipulated by The Banks and Trust Companies Regulation Act, banks and trust companies are issued licenses to operate in The Bahamas under the following designations:
Agent
An Authorized Agent is a bank or trust company authorized by The Exchange Control Department to deal in Bahamian and foreign currency securities and to receive securities into deposits (to act as custodians) in accordance with the terms of The Exchange Control Regulations Act 1956 and The Exchange Control Notices, issued from time to time by The Central Bank of The Bahamas.
Authorized Dealers & Authorized Agents
Authorized Dealers & Authorized Agents provide the services of both Dealers and Agents.
Public Licensee
A Public Licensee is a corporation permitted to carry on banking and/or trust business with members of the public. The company's Exchange Control designation determines whether the licensee is "resident" or "non-resident."
Resident
A Resident bank or trust company is one that can deal only in Bahamian Dollars, but they can operate in foreign currencies with the authorization of Exchange Control. Trust Companies with resident status are allowed to deal in foreign currency securities on behalf of non-resident customers.
Non-Resident
A Non-Resident bank and/or trust company is one which can operate only in foreign currencies, but may hold a Bahamian Dollar account, with Exchange Control approval, to pay local expenses.
Restricted
A Restricted bank and/or trust company is one which is allowed to carry on business for specified persons, usually named in the license.
Non-Active
A Non-Active company is one which is either in voluntary liquidation or wishes to keep the word "bank" or "trust" in the company's name, even though it is not carrying on any banking or trust company business.
Nominee
A Nominee company is one which holds securities and other assets in its name on behalf of clients of its parent bank or trust company.
Minimum Capital Requirements for Licenses
Public Categories
Bank only: $1,000,000.00
Bank & Trust: $1,000,000.00
Trust only: $1,000,000.00
Restricted Categories
Bank only: $100,000.00
Bank & Trust: $100,000.00
Trust only: $100,000.00
Nominee Trust: $10,000.00
Non-Active Categories
No minimum capital requirement is stipulated.
Application Procedure
The following information is required on the application for license: •Name of the bank or trust company.
•Address of head or registered office.
•If head or registered office is outside The Bahamas:
a) address of principal office in The Bahamas;
b) name of the officer who is to be the bank's or trust company's authorized agent in The Bahamas;
c) name of the other officer who, in the absence or inability to act of the officer named under (b) above, is to be the bank's or trust company's authorized agent in The Bahamas.
• Financial year of the bank or trust company.
At some point, the principal(s) of the bank or trust company will be required to have a personal interview with the Central Bank.
Additional particulars to be supplied by applicants for licenses other than banks or trust companies specified in the Schedule of the Act:
•Name, address, and professional qualifications of auditor or auditors.
•Full name, with addresses, nationalities, and references, of all persons who are directors, partners, managers, or officers.
•Names, with addresses and nationalities, of all persons who are shareholders.
•Names of all subsidiary companies of the applicant, with addresses of their registered offices.
•Copy of the act, charter, certificate of incorporation or memorandum or association and articles of association or partnership agreement of the applicant, as may be appropriate, verified by a statutory declaration made by a director, secretary, or partner and duly authenticated as follows:
a) in the came of a company incorporated in The Bahamas, certified in accordance with the provisions of Section 16 of the Companies Act;
b) in the case of a foreign company, certified and authenticated under public seal of the country, city or place under the laws of which such company has been incorporated;
c) in any case, authenticated in like manner to a deed or document when required to be registered under the provisions of the Registration of Records Act.
• References, including one from a bank or trust company.
•Status for the purposes of the Exchange Control Regulations Act and any regulations made thereunder and in force at the date of the application.
•True and complete yearly statement of the accounts certified by a director and the auditor that such statement is properly drawn up, so as to exhibit a true and correct view of the state of the applicant's affairs in respect of:
a) the accounts of the last financial year;
b) the accounts of the penultimate financial year.
• Statement of assets and liabilities at the end of the month prior to the submission of the application certified by a director or senior officer.
•Statement of capital or any other income held, directly or through a subsidiary or a nominee, as an asset of the applicant.
License Fees for Financial Institutions
The following annual fees apply to banks and trust companies:
Authorized Agents & Authorized Dealers: $160,000.00
Authorized Dealers: $100,000.00
Authorized Agents: $ 60,000.00
Other Public Institutions: $ 25,000.00
Restricted Bank & Trust: $ 5,000.00
Restricted Bank: $ 5,000.00
Restricted Trust: $ 2,500.00
Trust (Nominee): $ 2,500.00
Non-Active Bank & Trust: $ 1,000.00
Non-Active Bank: $ 1,000.00
Non-Active Trust: $ 1,000.00
Applications should be sent to The Central Bank of The Bahamas, which can also provide additional details on the application process.
The Central Bank of The Bahamas
Banks Supervision Department
Frederick Street
P.O. Box N4868
Nassau, N.P., The Bahamas
Tel: (242) 322-2193-6
(242) 322-2130-9
(242) 322-2526-7
Fax: (242) 322-4321
