There have been over 36,000 IBCs incorporated in The Bahamas since 1990. A Bahamian IBC may be incorporated within 24 hours.
IBCs are used for a variety of purposes, including formation of mutual funds, ship registration, conducting export/import trade, etc. The IBC Act also allows for the formation of Limited Duration Companies (LDCs), and there is legislation which makes provision for the establishment of Exempted Limited Liability Partnerships.
Benefits of an IBC
The many benefits which an IBC offers include the following:
- There is no fixed limit on the amount of
authorized capital.
- A minimum of two subscribers can form an IBC.
- The company can use fractional shares, registered
shares, or bearer shares.
- No public records are maintained as to the
identity of shareholders or directors.
- It may have at least one director, who may be
individual or corporate and of any nationality.
- Meetings may be held by telephone or another
electronic means.
- An existing company, whether incorporated locally
or in another jurisdiction, may continue as an
IBC.
- The corporate domicile of an IBC may be changed
from The Bahamas to another jurisdiction.
- An IBC may merge or consolidate with another IBC
or with an ordinary company under the Companies
Act, provided that the surviving entity is an
IBC.
- An IBC may also merge with a foreign company.
- Bahamian IBCs are exempt from all business
license fees and do not require a license under
the Business License Act.
- Shareholders are exempt from all income taxes,
capital gains taxes and corporate taxes. Further,
there is an exemption from inheritance,
succession and gift taxes, stamp duties in
respect of transfers, and foreign exchange
control regulations.
- Bahamian IBCs may be registered within twenty-four hours.
Requirements of Bahamian IBCs
An IBC is a company that does not:
- Carry on business with persons residing in The
Bahamas;
- Own an interest in real property situated in The
Bahamas or lease property for any other use than
as an office;
- Carry on banking, trust, or insurance business;
- Provide a registered office for companies.
- Makes or maintains deposits with a person
carrying on business within The Bahamas.
- Makes or maintains professional contact with
counsel and attorneys, accountants, bookkeepers,
trust companies, management companies, investment
advisers or similar persons carrying on business
within The Bahamas.
- Prepares or maintains books and records within
The Bahamas.
- Holds meetings of its directors and members
within The Bahamas.
- Holds a lease of property for use as an office
from which to communicate with members, or to
prepare or maintain company books and records.
- Holds shares, debt obligations and other
securities in an IBC or an ordinary company.
- Holds shares, debt obligations, or other securities which are owned by any person, IBC, or ordinary company resident in The Bahamas.
Powers
An IBC is allowed to do the following:
- Transact foreign exchange business without Exchange
Control restrictions.
- Issue registered, bearer, voting and non-voting,
no par value, unnumbered, common, preferred, or
redeemable shares.
- Issue shares that may have more or less than one
vote per share; be voted only on certain matters
or only upon the occurrence of certain events; be
voted only when held by persons who meet
specified requirements; or entitle participation
only in certain assets.
- Issue options, warrants or rights, or similar
instruments.
- Issue convertible securities.
- Purchase, redeem, or otherwise acquire and hold
its own shares.
- Guarantee a liability or obligation of any person
and to secure any of its obligations by mortgage,
pledge, or other charge of any of its assets.
- Protect the assets of the company for the benefit
of the company, its creditors and its members,
and any person with a direct or indirect interest
in the company.
- Hold Board of Directors' meetings anywhere and by
means of electronic telecommunications.
Memorandum
An IBC is entitled to carry on legitimate business without having to specify in an "objects clause" a specific purpose for the company. The memorandum is required to contain:
- Name of the company.
- Address of the IBC's registered office and agent
within The Bahamas.
- Objects or purpose for which the company is to be
incorporated, which can simply refer to the Act.
- Currency in which the shares of the company will
be issued.
- Authorised capital of the company, giving total
number of par value and no par value shares that
the company is authorised to issue.
- Number of classes and series of shares; the
number of shares of each such class and series
and their par values or no par values.
- Designations, powers, preferences and rights, and
the qualifications, limitations or restrictions
of each class and series of shares that the
company is authorised to issue.
- Number of shares to be issued as registered or
bearer shares and whether they are exchangeable.
Manner in which a required notice to members is to be given to the holders of shares issued to bearer.
Continuations
An existing company, whether incorporated locally or in another jurisdiction, may continue as an IBC and is required to supply:
- Articles of continuation approved by a majority
of the directors or the other persons who are
charged with exercising the powers of the
company, or in such other manner as may be
established by the company.
- Articles of continuation to contain the name of the company and the name under which it is being continued; the jurisdiction under which it is incorporated; the date on which it was incorporated; the information required to be included in the Memorandum; the amendments to its Memorandum and Articles, or their equivalent, that are to be effective upon the registration of the articles of continuation.
Mergers & Consolidation
An IBC may merge or consolidate with another IBC, an ordinary company, a subsidiary, or a foreign company. When an IBCs merge or consolidate with ordinary companies, the directors of each constituent company promoting the merger or consolidation must approve a written plan containing:
- Name of each participating company and the name
of the surviving company or the consolidated
company.
- Designation and number of outstanding shares of
each class and series of shares and the voting
entitlement of each such class and series for
each participating company.
- Specifications of each such class and series
entitled to vote as a class or series in each
participating company.
- Terms and conditions of the proposed merger or
consolidation.
- Any Amendments to the Memorandum or Articles of
the surviving company to be brought about by a
merger.
- Everything required to be included in the memorandum and Articles for a company incorporated as an IBC.
- Name of each participating company and the name
of the surviving company.
- Designation and number of outstanding shares of
each class and series of shares, and the number
of shares of each class and series of shares in
each subsidiary company owned by the parent
company for each participating company.
- Terms and conditions of the proposed merger, including the convertibility of shares, debt obligations, other securities or money or other property.
- Bahamian IBCs must comply with the provisions of
the IBC Act and foreign companies must comply
with the laws of their own country.
- Where the surviving company or the consolidated
company is a foreign company, it must submit to
the Registrar:
a) An agreement promising to honour any future claim, debt, liability, or obligation of a Bahamian IBC, or to protect the rights of IBC shareholders.
b) Irrevocable power to the Registrar to act as agent in the above procedures.
c) Agreement that it will honour awards due to IBC shareholders.
d) A certificate of merger or consolidation issued by the appropriate authority of the foreign jurisdiction where it is incorporated or such evidence as the Registrar considers acceptable.
Statutory Fees & Service Charges for IBCs
| Item | Authorised Capital | Gov't Fee |
| Incorporation | up to $5,000 up to $50,000 over $50,000 |
$100 |
| Continueation | up to $50,000 (foreign cos.) up to $50,000 (Companies Act) over $50,000 (Foreign cos.) |
$100 $250-$350 $1,000 |
| Annual License Fee | up to $5,000 up to $50,000 No capital or par value over $50,000 |
$100 $300-$350 $350 $1,000 |
| Merger/Consolidation | over $50,000 | $700 |
| Arrangements | over $50,000 | $700 |
| Articles of Merger or Consolidation | Registration | $500 |
| Articles of Memorandum | Amendment | $50 |
| Articles of Dissolution | Registration | $100 |
| Resolution of Rescinding Articles of Diss. | Registration | $100 |
| Incorp./Merger/Consol./Documents | Copies of Extract | $15 |
| Documents | Inspection | $10 |
| Company Name | Restoration | $300-$600 |
| Each Entry | Inspection | $10 |
For further information, contact the regulatory authority responsible for International Business Companies:
- Office of the Registrar General
The Registrar General's Department
Registry of Companies
Rodney E. Bain Building
Shirley & Parliament Streets
P.O. Box N532
Nassau, N.P., The Bahamas
Tel: (242) 322-33167147, (242) 322-7160
Fax: (242) 322-5553
