9 Reasons Why Companies Register in the Bahamas


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Congratulations, you’ve decided to start a company.

But have you thought about where you are going to register the company?

Choosing the jurisdiction for your company has a significant bearing on the overall operations, and this is a decision you cannot take lightly. 

The Bahamas has always been on top of the list of founders as a preferred location to register an offshore company for several reasons. 

So read on to find out what’s in store for you if you are headed to this island nation. 

1. No minimum paid-up capital

The corporate laws of the Bahamas don’t require offshore companies (known as International Business Companies as per the Bahamian laws) to have any minimum paid-up share capital.

This means that you have complete control over how much you want to incorporate a company with, and that amount can be as little as you want. 

2. Tax neutrality 

Tax benefits are one of the major advantages of establishing a business in the Bahamian economic landscape. 

You don’t have to pay any taxes — this includes corporate tax, capital gains tax, income tax, inheritance tax, or sales tax.

You are only liable for licensing fees, property and stamp taxes, and tariffs for imports. 

3. Flexible immigration policy 

The Economic Permanent Residency offered by the Bahamian Government makes it easy for individuals to work and live in the country.

Individuals who hold a permanent residence card can clear immigration freely and reside in the Bahamas for any length of time. 

4. Absolute anonymity 

As per the provisions of the International Business Companies Act, 1990, a foreign company can conduct its business in the Bahamas with complete privacy.

Even the names of the shareholders don’t have to be provided to the Corporate Registry.

The companies also don’t have to comply with any annual reporting requirements.

5. No exchange control laws 

The offshore companies in the Bahamas are not subject to any exchange control laws.

They are allowed to transact freely in any currency.

However, any dealings in Bahamian Dollars should be approved by the Central Bank. 

6. No filings are needed  

Offshore companies don’t need to file any statements of accounts.

The only requirement is to maintain the records that set out all the transactions, and the records should be maintained for five years from the date of the transaction. 

 Companies also have the flexibility to maintain the records outside the Bahamas.

However, the registered agent in the Bahamas should be informed about the records. 

7. Flexible rules for appointing a director

Offshore companies only need a single director.

Both corporate and individual directorships are allowed, and the director doesn’t have to be a resident of the Bahamas.

Appointment of nominee directors is also permitted.

The directors are also free to hold their meetings in any location and don’t have to remain confined to the registered office address. 

The Bahamian Company Law doesn’t require you to appoint a company secretary either. 

8. Bookkeeping is extremely simple 

There are no obligations for filing the account or annual returns.

Offshore companies are also not subject to any audit requirements. 

9. Shareholder requirements are straightforward 

You need to have at least one shareholder.

The shares should be registered, but no bearer shares are permitted to be issued by offshore companies.

You can issue both voting and non-voting shares.

Nominees shareholders can be appointed.

No annual general meetings need to be conducted for the shareholders.

Downsides to incorporating in the Bahamas

Despite the advantages, there are certain challenges you may face when incorporating an offshore company in the Bahamas.

In 2018, the Bahamas passed the Commercial Entities (Substance Requirements) Act 2018 (the “Substance Act”) to prevent “shell” companies from being incorporated in the Bahamas to evade taxation in the home country.

As per the provisions of the Substance Act, requires entities, including International Business Companies, that carry out the following activities to prove a substantial economic presence and real economic presence within the Bahamas.

These activities include:

  • banking business; 
  •  insurance business; 
  • fund management business; 
  • financing and leasing business; 
  • headquarters business; 
  •  distribution and service centers business; 
  • shipping business; 
  • commercial use of intellectual property; 

This is also applicable to a holding company that has one or more subsidiaries engaged in such activities.

To fulfill the substance test, a company needs to demonstrate:

  • Full-time employees in the Bahamas 
  • An adequate level of annual expenditure incurred in the Bahamas or expenditure incurred towards outsourcing to service providers
  • Adequate levels of board management and control in the Bahamas
  • Physical offices in the Bahamas or expenditure incurred towards outsourcing to service providers in proportion to the entity’s activities. 

Offshore companies cannot outsource any core income-generating activities to anyone outside the Bahamas.

While outsourcing to a third party within the Bahamas is allowed, the offshore company must exercise sufficient supervision and management. 

Secondly, even though British English is the official language, most of the population speaks English with a Creole dialect.

Some even have a pronounced African accent.

As a result, you may find it challenging to communicate with various service providers and get the paperwork organized. 

Thirdly, court systems in the Bahamas are not very efficient.

There is a significant backlog of cases, and it can take close to 545 days to resolve a commercial dispute.

It’s not surprising that the Bahamas is ranked at 119 in the Doing Business 2020 report. 

So what are my options for registering an offshore company?

While registering a company in the Bahamas looks fantastic on paper due to financial privacy and tax benefits, there are significant challenges involved in navigating your business. 

But that’s no reason to feel disheartened.

Why not head over to Hong Kong, which has emerged as the top choice for entrepreneurs in recent years for setting up an offshore company?

Hong Kong has been ranked 3rd by the World Bank for the ease of doing business and offers several advantages such as an attractive tax system, political stability, superior infrastructure, productive workforce, and access to Mainland China. 

The process of setting up an offshore company in Hong Kong is incredibly straightforward, and you can register with Air Corporate to kickstart the process.

It only takes a few hours to register a company, and you don’t even need to travel to Hong Kong to get everything organized. 

You can rely on our team of experts to guide you and make your dreams come true!


Vivian Au

For many years, I worked at big accounting and company secretary firms in Hong Kong. I started Air Corporate to make the life of entrepreneurs and SMEs easy.

Vivian Au

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