Bahamas IBCs booklet - English

A G L O B A L A P P R O A C H T O L E G A L S O L U T I O N S

Bahamas Internat ional Business Companies

This booklet is intended for the exclusive use of our clients so that easy reference may be made

to a short explanation of the International Business Companies Act, 2000 (No. 45 of 2000) of

the Commonwealth of the Bahamas and to our standard forms.

We believe our colleagues and other professional advisors will find this booklet especially

useful, as it contains a comprehensive explanation of the main aspects of the current Bahamas

Legislation that relate specifically to corporations.

Mossack Fonseca & Co. and its international affiliates will not provide any services to any

person or organisation seeking to engage in money laundering or unlawful activities.

TABLE OF CONTENTS

INCORPORATING IN THE BAHAMAS…………………………………………………... 4

A. APPLICABLE LAW AND REGULATIONS……………………………………………… 4

B. ATTRACTIVE FEATURES………………………………………………………………... 4

C. FORMATION PROCESS………………………………………………………………….. 5

C.1 INFORMATION REQUIRED TO FORM AN IBC……………………………… 5

1. Name of the Company………………………………………………………………. 5

2. The Authorised Capital………………………………………………………………… 5

3. Special Clauses………………………………………………………………………... 5

C.2 MAIN DATA IN OUR STANDARD MEMORANDUM OF ASSOCIATION………. 6

1. Name of the Company…………………………………………………………….….. 6

2. The Registered Office and Registered Agent……………………………………..... 6

3. Objects…………………………………………………………………………….. 6

4. The Authorised Capital…………………………………………………………..….. 6

5. Amendment to the M&AA………………………………………………………... 6

6. Names and Addresses of the Subscribers…………………………………………. 6

C.3 MAIN DATA IN OUR STANDARD ARTICLES OF ASSOCIATION………… 6

1. Name of the Company………………………………………………….……….… 7

2. Shares…………………………………………………….……………………….. 7

3. Members……………………………………………………………………………… 7

4. Directors………………………………………………………………………..… 7

5. Seal……………………………………………………………………………….…… 7

6. Books and Records…………………………………………………………………… 7

7. Amendments to the Articles of Association……………………………………….… 8

D. BOOKS AND RECORDS MAINTAINED AT THE REGISTERED OFFICE………….. 8

E. COSTS………………………………………………………………………………….… 8

E.1 FORMATION COSTS………………………………………………………..… 8

E.2 ANNUAL COSTS…………………………………………………………………. 8

E.3 ANNUAL COSTS APPLICABLE TO REDOMICILED COMPANIES……… 9

F. DIRECTORS AND MEMBERS………………………………………………………… 9

F.1 DIRECTORS……………………………………………………………………… 9

F.2 MEMBERS……………………………………………………………………..… 9

G. SHELF COMPANIES………………………………………………………………………… 10

H. CONTINUATION………………………………………………………………………….. 10

I. TAXATION/TAX TREATMENT……………………………………………….…………… 10

J. CERTIFICATE OF GOOD STANDING………………………………………………… 10

4 | B a h a m a s I n t e r n a t i o n a l B u s i n e s s C o m p a n i e s

INCORPORATING IN THE BAHAMAS

A. APPLICABLE LAW AND REGULATIONS

International Business Companies are regulated by the International Business Companies Act, 2000

(No. 45 of 2000), as amended in 2010 and 2011.

B. ATTRACTIVE FEATURES

Below is a summary of some of the more attractive features of the IBC Act:

• No requirement to file annual returns or financial statements.

• No requirement to hold annual general meetings of shareholders or directors.

• Full exemption from taxation on any business activity or transaction done outside The

Bahamas.

• Speedy incorporation procedures and simple ongoing administration.

• Reasonable formation and maintenance costs and fees.

• No minimum or maximum capital requirements.

• Minimum registration fee on capital.

• IBCs may engage in any lawful business in any country and may carry on transactions in

whatever currencies they choose.

• Only nominative shares are allowed.

• IBCs need not have more than one director.

• The shareholders, directors, and officers may be of any nationality and may be residents of any

country.

• Neither the directors nor the officers need be shareholders.

• Directors and/or officers can be either corporate entities or natural persons.

• Shareholders and/or directors may hold their meetings in any country.

• The words "Limited", "Corporation", "Incorporated", "Gesellschaft mit beschränkter Haftung",

"Société Anonyme" or "Sociedad Anónima", or the abbreviations "Ltd.", "Corp.", "Inc.",

"GmbH.", or "S.A." may be used in an IBC's name.

• Familiarity of incorporation documents (Memorandum & Articles of Association, Certificate

of Incorporation) because Bahamas is a British Commonwealth jurisdiction.

• The apostille is normally used to legalise documentation. Legalisation via a Consulate is also

available for some countries.

• Incorporation documents may be drafted in English and their translation into Spanish or any

other language .

• The books, records and minutes of the Company may be kept in any place or country at the

directors' choice.

• Holder of bank accounts, fixed deposits, investment plans and any other financial or

commercial titles.


• Owner of shares of other companies or legal entities.

• Owner of apartments, houses, buildings and any other movable or immovable property or

goods.

• Manager and promoter of international business transactions.

• International leasing of vehicles, machinery and others.

• Lending or borrowing money, giving or receiving money for commissions or others.

• Marketing and promotion of products and services.

• Other commercial and financial activities.

C. FORMATION PROCEDURE

C.1. INFORMATION REQUIRED TO FORM AN IBC

For the incorporation of an IBC, we require only the following information:

1. Name of the Company

The name of the company may be in any language and must end in the word "Limited",

"Corporation", "Incorporated", "Gesellschaft mit beschränkter Haftung", "Société Anonyme"

or "Sociedad Anónima", or the abbreviations "Ltd.", "Corp.", "Inc.", "GmbH.", or "S.A.". The

words "Assurance", "Bank", "Building Society", "Chamber of Commerce", "Chartered",

"Cooperative", "Imperial", "Insurance", "Municipal", "Royal", "Trust", "Fund Management" or

any word conveying a similar meaning cannot be used. Moreover, any name identical to that of

a company already existing or suggesting the patronage of any member of the Royal Family,

the Government of The Bahamas or a department thereof, a statutory corporation or board, or a

local or municipal authority cannot be used.

2. The Authorised Capital

The share capital may consist of shares with a nominal or par value. Our standard

Memorandum of Association provides that the authorised capital will consist of US$50,000.00

divided into 50,000 registered shares with a par value of US$1.00 each. A share capital of

US$50,000.00 pays the minimum registration fee (US$330.00). No par value shares are

available and the registration fee would be US$350.00.

3. Special Clauses

We suggest that our standard Memorandum of Association and Articles of Association as

detailed below be used unless there is a particular reason for requesting that an additional or

special clause be inserted or a particular clause deleted, or that any other amendment be made.


C.2. MAIN DATA IN OUR STANDARD MEMORANDUM OF ASSOCIATION

We provide below a brief explanation of some of the points found in our standard form of

Memorandum of Association.


Please see point C (1) above.

2. The Registered Office and Registered Agent

We provide the Registered Office and we act as the Registered Agent of the IBC in The

Bahamas.

3. Objects

The objects in our Memorandum of Association are extremely wide and cover any possible type

of operation or activity.

4. The Authorised Capital

The shares are divided into such number of classes and series as the directors may determine

from time to time through a resolution and, until so divided, they comprise one class and series.

5. Amendment to the Memorandum of Association

An IBC may, through a directors' resolution, amend or modify any of the conditions contained in

the Memorandum of Association, or increase or reduce its authorised capital in any way

permitted by the law. The amendment shall be submitted to the Registrar within 14 days after

any amendment.

6. Names and Addresses of the Subscribers

We have two (2) nominee companies that act as the subscribers to the Memorandum of

Association and Articles of Association, but they have no subscription rights as such.

C.3. MAIN DATA IN OUR STANDARD ARTICLES OF ASSOCIATION

The Articles of Association prescribe regulations for the company. In our standard form of Articles

of Association, you will find the points explained below.



Please see section C (1) above.

2. Shares

Our Articles of Association also detail many aspects of the share capital such as the variation

of rights, transfer of shares, transmission of shares, fractional shares, acquisition of own shares

and alterations in the share capital.

3. Members

The articles specify proceedings at meetings, voting, and for members (i.e. shareholders)

acting through representatives at meetings.

4. Directors

The business and affairs of an IBC are managed by the directors and the directors have

therefore all the powers of the company that are not reserved to the members under the IBC

Act.

Our standard Articles of Association provide that the IBC may have one or more directors.

The first director(s) is (are) elected by the subscribers to the Memorandum of Association.

Any director may, by a written document under his hand deposited at the company's

Registered Office, from time to time appoint another director or any other person to be his

alternate.

5. Seal

A Company Seal is mandatory under the Act and an imprint of same must be kept at the

company's Registered Office. The stamping of the Company Seal must be made pursuant to

Regulations 4 and 75 of our standard Articles of Association.

6. Books and Records

An IBC shall cause reliable accounting records to be kept in relation to all sums of money

received and expended by the IBC and the matter in respect of which such receipt and

expenditure takes place inclusive of all sales, purchases and other transactions. Such

accounting records must correctly demonstrate the IBC’s financial position with reasonable

accuracy when it is required.


All Bahamas IBCs are required to keep a register of all their directors and officers at their

Registered Office and to file a copy at the Bahamas Registry. Every IBC is also required to

maintain a Share Register at its Registered Office.

7. Amendments to the Articles of Association. See section C.2 (5) above.

D. BOOKS AND RECORDS TO BE MAINTAINED AT THE REGISTERED OFFICE:

1. Register of Directors and Officers

2. Share Register

3. A copy of all the amendments made to the Memorandum or Articles

4. An imprint of the Company Seal

E. COSTS

E.1 FORMATION COSTS

The costs for the formation of a company are set forth in our fee schedule, which is available upon

request. Our charges always include the first year's Registered Office and Registered Agent fees, the

registration fee (US$330.00), four share certificates, the share register, as well as the registration of

a copy of the first Register of Directors and Officers at the Bahamas Registry. Expenses such as

telexes, faxes, notarisations, legalisations and air freighting of documents are charged separately.

E.2 ANNUAL COSTS

1. Registered Agent and Registered Office Fees

As mentioned above, the IBC Act requires that all corporations have a Registered Agent and a

Registered Office in The Bahamas. The Registered Agent and Registered Office fees are set

forth in our fee schedule, which is available upon request.

2. License Fee

A company whose name is on the Register on 31st December in a year must, before 1st March

of the following year, pay to the Registrar an annual licence fee as follows:

a. US$350.00 if its authorised capital does not exceed US$50,000.00 and its shares have a par

and/or no par value).


b. US$1,000.00 if its authorised capital exceeds US$50,000.00.

If a company fails to pay the amount due as licence fee by 1st March of the year following the

year of incorporation, the licence fee increases by 10 percent of that amount. If a company fails

to pay the amount due as an increased licence fee by 30th September, then the licence fee

increases by 50 percent of the licence fee.

If a company fails to pay the latter increased licence fee, the Registrar publishes in the Gazette

and serves on the company a notice stating the amount of the licence fee due and stating that

the name of the company will be struck off the Register if the company fails to pay the licence

fee on or before 15th December. If a company fails to pay the increased licence fee by 15th

December, the Registrar strikes the name of the company off the Register as from the 1st

January next ensuing.

3. Reactivation Fee

The corporation may be reactivated at the Bahamas Registry through the payment of a

US$600.00 reactivation fee plus all outstanding fees, licence fees and surcharges.

E.3 ANNUAL COSTS APPLICABLE TO CONTINUED COMPANIES

All regular IBC annual costs will be applicable to any foreign company transferring its domicile to The

Bahamas as of the calendar year next following the year of its continuation.

F. DIRECTORS/SHAREHOLDERS AND MEMBERS

F.1 DIRECTORS

The business and affairs of a Bahamas IBC shall be managed by at least one director, who may be an

individual or a company.

A company shall keep a register to be known as a Register of Directors and Officers that may be in such

form as the directors shall approve, but if it is in magnetic, electronic or other data storage form, the

company must be able to produce legible evidence of its contents.

F.2 MEMBERS:

A Bahamas IBC may have one or more Members, who may also be individuals or companies, and shall

cause to be kept at its registered office one or more registers to be known as Share Registers, which may

be in such form as the directors shall approve, but if they are in magnetic, electronic or other data storage

form, the company must be able to produce legible evidence of its contents.


G: SHELF COMPANIES

It frequently happens that a client requires, an already existing company, for reasons of expediency

or other. In order to be able to respond to such needs, we always have a number of already existing

companies for sale. These companies are "clean", that is to say, they have never traded or engaged in

any transaction whatsoever. We deliver to our clients a letter to this effect. These companies are

more expensive than companies made to order and their prices vary depending on whether

legalisations are required, the age of the company, etc.

H. CONTINUATION

The Bahamas IBC Act envisages the continuation option for foreign companies wishing to continue in a

different jurisdiction to be registered under Bahamas Laws as a Bahamas IBC

The continuation of a Bahamas IBC to another jurisdiction shall be approved (i) by a majority of the

directors or such other persons as may be charged with exercising the powers of the company; or (ii) in

such other manner as may be established by the company for exercising the powers of the company

A certificate of continuation issued by the Registrar shall be prima facie evidence of compliance with all

the requirements of this Act in respect of continuation.

I. TAXATION/TAX TREATMENT

Income by IBCs is exempted from income tax in The Bahamas. This includes all dividends, interest,

rents, royalties, compensations, capital gains realised with respect to any shares, debt obligations or

other securities, and any other amounts paid to the company.

In addition to this, no estate, inheritance, succession or gift tax, rate, duty, levy or other charge is

payable with respect to any shares, debt obligations or other securities of a company incorporated

under the IBC Act.

In general, all transactions of an IBC are exempted from the payment of stamp duty.

J. CERTIFICATE OF GOOD STANDING

The Registrar shall, upon request by any person, issue a certificate of good standing under his hand

and seal certifying that a company incorporated under the IBC Act is in good standing, if the

Registrar is satisfied that the name of the company is on the Register and that the company has paid

all fees, licence fees and penalties due and payable.


The certificate of good standing will contain a statement as to whether:

(a) the company has submitted to the Registrar articles of merger or consolidation that have not

yet become effective;

(b) the company has submitted to the Registrar articles of arrangement that have not yet become

effective;

(c) the company is in the process of being wound up and dissolved; or

(d) any proceedings to strike the name of the company off the Register have been instituted.

LA/AUG.2012

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Bahamas IBCs booklet - English