Tax Havens: Bahamas

Emile Justin Cebrian

Far Eastern University Institute of Law

The State
Full designation: Nature of territory: Location:
o Nassau o Archipelago o The Commonwealth Bahamas of the o The Americas (Atlantic side)

Capital city:
Population: Currency:

o 353,658 (2010 estimate)

GDP per capita:

o Bahamian Dollar (BSD)

o $22,832 (2012 estimate) // Total: $8.043 billion

The Haven
Overview:
o The Bahamas is often described as both an off-shore financial center and a pure tax haven. o The Bahamas is likewise touted as the perfect no-tax haven, and for good reason: "Countries like the Bahamas make tax haven status an integral part of their marketingrelocate to Nassau, and youll fear no tax man. Thats because, for Bahamians and resident aliens there are no taxes on personal income, capital gains, inheritance or gifts. (Woosley and Eaves, "Tax
Havens of the World", Forbes [2007])

o The Bahamas is the off-shore tax haven of choice for investors from the US, Europe, and other developed countries.

The Haven
What makes the Bahamas a tax haven?
o The Bahamas has: No personal or company income tax No capital gains tax No withholding tax No business tax No estate tax No gift tax No inheritance tax No death duties No employment tax No sales taxes No exchange controls No tax treaties No probate fees o o This freedom from taxes is enjoyed by resident corporations, partnerships, individuals, non-resident and nonresident controlled Bahamian entities and trusts The only direct tax in the Bahamas is a real property tax (rate depends on whether the property is commercial or owner-occupied)
Assessed Value

Commercial

Owner-Occupied

~ US$50,000 US$50,000 US$100,000

0.50% 0.50% for first 50K // 1.00% for next 50K

exempted 0.75% for next 50K

US$100,000+

Same as immediately preceding but + 1.50% on all value > 100K

Same as immediately preceding but + 1% on all value > 100K

Its not just a haven, its practically heaven. huehue

The IBCA
The International Business Companies Act
o o Passed on Jan. 11, 1990 Purpose: providing for the incorporation, registration and operation of International Business Companies ("IBCs") Substantially, to prove non-resident status Any company may be incorporated as an IBC unless: It carries on business with persons resident in the Bahamas it owns an interest in, or a lease of, real estate situated in the Bahamas (unless a lease of office space) it carries on banking or trust business, it carries on insurance or reinsurance business it carries on the business of providing the registered office for companies Minimum number of shareholders required to form a company: 2 The incorporation process takes a measly 24-48 hours Shareholders of IBCs are exempt from all income taxes, capital gains taxes and corporate taxes There is likewise an exemption from inheritance, succession and gift taxes, stamp duties in respect of transfers, and foreign exchange control regulations No limit to capital, exemption from payment of business license fees, etc.

What does the law require for one to be an IBC?

o o

o o

Benefits that come with IBC status:

o o o

Thank you for listening!

Yes, its over. You can wake up now.

SOURCES:
o o o o o http://taxhaven.dunway.com/html/bahamas.html http://www.mondaq.com/x/7406/Environmental+Law/A+Guide+To+International+Business+Companies+In+ The+Bahamas http://www.forbes.com/2007/03/15/havens-international-tax-forbeslife-cx_mw_ee_0315taxhavens.html http://www.taxhavens.biz/caribbean_tax_havens/tax_haven_bahamas/ http://www.deloitte.com/assets/DcomGlobal/Local%20Assets/Documents/Tax/Taxation%20and%20Investment%20Guides/2013/dttl_tax_highlight_ 2013_Bahamas.pdf http://www.geographia.com/bahamas/investment/inbsco01.htm http://www.geographia.com/bahamas/investment/trade01.htm http://www.globalpropertyguide.com/Caribbean/Bahamas/Taxes-and-Costs

o o o