| The financial 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 comprisiong 12% of GDP ($340
|| 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
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:
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.
- A convenient location, just 50 miles from the
mainland United States, coupled with an inviting
- 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
The Bahamas is
poised to offer opportunities to innovative, progressive
investors. The financial services sector is a haven to
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
Currently under development is a stock market that will
allow closed-end mutual funds to register in The Bahamas.
- 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
- 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
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
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
Authorized Dealers & Authorized Agents provide
the services of both Dealers and Agents.
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"
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
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.
A Restricted bank and/or trust company is one which
is allowed to carry on business for specified persons,
usually named in the license.
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.
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
- Bank only: $1,000,000.00
Bank & Trust: $1,000,000.00
Trust only: $1,000,000.00
- Bank only: $100,000.00
Bank & Trust: $100,000.00
Trust only: $100,000.00
Nominee Trust: $10,000.00
- No minimum capital requirement is stipulated.
The following information is required on the
application for license:
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
- 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
- a) in the came of a company incorporated
in The Bahamas, certified in accordance
with the provisions of Section 16 of the
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
- References, including one from a bank or trust
- Status for the purposes of the Exchange
Control Regulations Act and any regulations
made thereunder and in force at the date of the
- 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:
- Statement of assets and liabilities at the end of
the month prior to the submission of the
application certified by a director or senior
- 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
|Authorized Agents &
|Other Public Institutions:
|Restricted Bank & Trust:
|Non-Active Bank & Trust:
Applications should be sent to The Central Bank of
The Bahamas, which can also provide additional
details on the application process.
Investment Incentives in
Banks & Trust
Mutual Fund Managers
- The Central Bank of The Bahamas
Banks Supervision Department
P.O. Box N4868
Nassau, N.P., The Bahamas
Tel: (242) 322-2193-6
Fax: (242) 322-4321