Forming a Company in The Bahamas: Complete Guide

Published on October 2, 2025 and written by Cyril Jarnias

The Bahamas, an idyllic Caribbean archipelago, is not just a dream destination for tourists seeking pristine beaches and crystal-clear waters. This country also offers an extremely favorable environment for international entrepreneurs and investors looking to establish an offshore company. With its attractive tax regime, political and economic stability, and business-friendly legislation, The Bahamas positions itself as a premier jurisdiction for establishing businesses abroad.

Why The Bahamas Attracts Entrepreneurs from Around the World

The Bahamas has built a solid reputation in the international business world, and it’s no coincidence. This small island nation offers a unique combination of advantages that make it a sought-after destination for establishing offshore companies. Here are the main reasons why entrepreneurs choose The Bahamas:

An extremely advantageous tax regime: The Bahamas are renowned for their attractive tax policy. Indeed, the country imposes no corporate tax, income tax, capital gains tax, inheritance tax, or dividend tax for offshore companies. This complete exemption from taxes on foreign income is a major advantage for entrepreneurs looking to optimize their tax situation.

Political and economic stability: A former British colony independent since 1973, The Bahamas enjoys remarkable political and economic stability. The country benefits from strong institutions and a legal system based on English common law, providing a secure framework for foreign investors.

Confidentiality and asset protection: The Bahamas place great importance on business confidentiality and asset protection. Local legislation offers a high level of privacy protection for shareholders and beneficial owners of offshore companies.

Modern infrastructure and quality services: Despite its modest size, the country has modern infrastructure and first-class financial services. The Bahamas is home to numerous international banks and law firms specializing in offshore business, facilitating the management of foreign companies.

Legislative flexibility: The legal framework in The Bahamas is particularly flexible and adapted to the needs of international businesses. This flexibility allows for optimal management of wealth and investments on a global scale.

Flagship Legal Structures in The Bahamas

The Bahamas offers several types of legal structures adapted to the needs of international entrepreneurs. Here are the main types of companies you can establish in this tax haven:

International Business Company (IBC)

The International Business Company (IBC) is the most popular and flexible structure for offshore activities in The Bahamas. It offers numerous advantages:

– Complete tax exemption on foreign-generated income – No minimum capital requirement – Possibility of having a single shareholder and a single director – High confidentiality (shareholder and director names are not public) – Flexibility in management and administration

Limited Duration Company (LDC)

The Limited Duration Company is a variant of the IBC, with a limited lifespan (maximum 30 years). This structure is particularly suitable for specific projects or joint ventures.

Exempted Limited Partnership (ELP)

The Exempted Limited Partnership is a form of limited partnership, ideal for investment funds and wealth management structures. It offers great flexibility in the distribution of profits and losses among partners.

Foundation

The Bahamian foundation is a hybrid legal entity, combining characteristics of a company and a trust. It is particularly suitable for wealth management and estate planning.

Corporate Taxation: A Major Advantage of The Bahamas

The tax regime in The Bahamas is one of the most attractive in the world for offshore companies. This advantageous tax policy is a key element in the decision of many entrepreneurs to establish their company in this country. Here are the main aspects of corporate taxation in The Bahamas:

Complete corporate tax exemption: Offshore companies registered in The Bahamas pay no tax on profits generated abroad. This exemption applies regardless of the company’s activity, as long as it does not generate income within Bahamian territory.

No dividend tax: Dividends paid by a Bahamian company to its shareholders, whether residents or non-residents, are completely tax-exempt.

No capital gains tax: Capital gains realized from the sale of assets or shares are not taxed in The Bahamas.

No withholding tax: There is no withholding tax on payments made to non-residents, whether for dividends, interest, or royalties.

Reduced stamp duties: Stamp duties on real estate transactions and legal documents are generally low in The Bahamas.

Tax information exchange agreements: Although The Bahamas has not signed bilateral tax treaties, the country has concluded Tax Information Exchange Agreements (TIEAs) with several countries, thereby facilitating international business relations.

It is important to note that this advantageous taxation applies only to income generated outside The Bahamas. Companies conducting activities within Bahamian territory are subject to local taxation, although this remains relatively moderate compared to other jurisdictions.

Establishing Your Company in The Bahamas: A Simple and Quick Process

Establishing a company in The Bahamas is a relatively simple and quick process, which can generally be completed in a few days. Here are the main steps to follow to set up your business in this tax haven:

1. Choose a name for your company

The first step is to choose a unique name for your business. This name must be approved by The Bahamas’ Registrar General’s Department. It is recommended to propose several names in case your first choice is not available.

2. Prepare the incorporation documents

You will need to prepare your company’s articles of incorporation (Memorandum and Articles of Association). These documents define the structure and operating rules of your business.

3. Appoint directors and shareholders

Identify the individuals who will hold the positions of directors and shareholders in your company. For an IBC, you can have a single director and a single shareholder.

4. Engage a local registered agent

Bahamian law requires that every offshore company have a local registered agent. This agent will be responsible for the administrative management of your business and will serve as the point of contact with local authorities.

5. Submit the registration application

Your registered agent will submit all necessary documents, including the articles of incorporation and information about directors and shareholders, to the Registrar General’s Department.

6. Pay the registration fees

Registration fees vary depending on your company’s share capital. For a standard IBC, these fees are generally in the range of 350 to 1000 Bahamian dollars.

7. Obtain the certificate of incorporation

Once your application is approved, you will receive a certificate of incorporation, marking the official birth of your company in The Bahamas.

8. Open a bank account

Although not a legal requirement, it is highly recommended to open a bank account in The Bahamas to facilitate your company’s operations.

The complete process can generally be completed in 3 to 5 business days, provided all necessary documents are provided and the company name is quickly approved.

The Bahamas vs Other Tax Havens: An Enlightening Comparison

Although The Bahamas is a premier destination for establishing offshore companies, it is important to compare it to other attractive jurisdictions to have a comprehensive view. Here is a comparison with some other popular tax havens:

Bahamas vs Cayman Islands

The Cayman Islands are often considered the main competitor of The Bahamas. Both jurisdictions offer complete tax exemption for offshore companies. However, The Bahamas have the advantage of generally lower establishment and maintenance costs. Additionally, The Bahamas offer greater flexibility in terms of available legal structures.

Bahamas vs British Virgin Islands (BVI)

The BVI is another popular jurisdiction for offshore companies. Like The Bahamas, they offer complete tax exemption. However, the BVI has recently introduced stricter economic substance requirements, which can be constraining for some businesses. The Bahamas, on the other hand, maintain a more flexible approach while remaining compliant with international standards.

Bahamas vs Panama

Panama is known for its flexibility and banking secrecy. However, unlike The Bahamas, Panama applies a territorial tax system, meaning that locally generated income is taxed. The Bahamas offer a more comprehensive tax exemption for offshore activities.

Bahamas vs Singapore

Although Singapore is not strictly speaking a tax haven, it is an attractive jurisdiction for international businesses. Singapore offers a first-class business environment and competitive taxation, but not a complete exemption like The Bahamas. However, Singapore may be preferable for companies seeking an Asian presence and a less controversial reputation.

The Bahamas stand out for their unique combination of tax advantages, political stability, legal flexibility, and quality financial services. Although each jurisdiction has its own strengths, The Bahamas remain a top choice for many international entrepreneurs.

Social Obligations in The Bahamas: A Light Framework for Offshore Companies

Social obligations for offshore companies in The Bahamas are relatively light, which contributes to the country’s attractiveness for international entrepreneurs. Here are the main aspects to know:

Local employees

For pure offshore companies, which conduct no activities in The Bahamas, there is generally no obligation to employ local staff. However, if your business decides to have a physical presence in the country, you will need to comply with Bahamian labor laws for your local employees.

Social security

The Bahamas has a social security system called the National Insurance Board (NIB). For local employees, employers must contribute 5.9% of the employee’s salary, while the employee contributes 3.9%. However, these obligations do not apply to non-resident employees of offshore companies.

Work visa

If you wish to employ non-residents in The Bahamas, you will need to obtain work permits. The process can be complex and costly, but it is generally simpler for management positions in offshore companies.

Annual reports

Offshore companies in The Bahamas are required to maintain accounting records, but there is no obligation to file them with the authorities. A simplified annual report must be submitted, primarily to confirm that the company is still active and that its basic information is up to date.

Due diligence

The Bahamas has strengthened their requirements regarding anti-money laundering and counter-terrorism financing. Offshore companies must provide information about their beneficial owners to their registered agent, who will keep it confidentially.

Economic substance

Unlike some other offshore jurisdictions, The Bahamas has not yet introduced strict economic substance laws. However, it is recommended to maintain a certain level of substance to avoid being considered a “mailbox” company.

Opening a Corporate Bank Account in The Bahamas: Key Steps

Opening a corporate bank account is a crucial step to effectively operate your offshore company in The Bahamas. Although the process has become more complex in recent years due to strengthened anti-money laundering regulations, it remains entirely achievable with proper preparation. Here are the steps to follow:

1. Choose the appropriate bank

The Bahamas is home to many reputable international banks. Look for a bank that matches your needs in terms of services, fees, and reputation. Some popular options include Deltec Bank & Trust, Ansbacher (Bahamas) Limited, and Corner Bank (Overseas) Limited.

2. Prepare necessary documents

You will generally need to provide the following documents:

– Certificate of Incorporation of your company – Company articles (Memorandum and Articles of Association) – Proof of identity and residence for directors, shareholders, and authorized signatories – Business plan detailing the company’s activities and financial projections – Proof of source of funds – Banking or professional references

3. Complete the application form

Each bank has its own account opening application form. Fill it out carefully and accurately.

4. Interview with the bank

Many banks now require an in-person or video conference interview with at least one of the company’s directors or authorized signatories. This interview aims to understand the nature of your business and assess potential risks.

5. Thorough due diligence

The bank will conduct a thorough verification of your business and the individuals involved. This process can take several weeks.

6. Approval and account activation

Once your application is approved, you will generally need to make an initial deposit to activate the account. The minimum amount varies by bank but can range from 5,000 to 50,000 dollars or more.

7. Online banking setup

After account activation, set up online banking services to easily manage your transactions remotely.

It is important to note that the account opening process can take from 2 to 8 weeks, or even longer in some cases. Patience and transparency are essential throughout the process.

Thriving Business Sectors in The Bahamas

Although The Bahamas are primarily known for their tax advantages for offshore companies, the country also offers interesting opportunities in various business sectors. Here is an overview of the most promising areas for entrepreneurs:

Financial services

The financial sector is the backbone of the Bahamian economy. Opportunities are numerous in:

– Wealth management – International banking services – Investment funds – Captive insurance

Tourism and hospitality

Tourism is a key sector in The Bahamas. Investors can explore opportunities in:

– Development of luxury hotel complexes – Yacht and boating services – Ecotourism and adventure tourism

Real estate

The Bahamian real estate market attracts many international investors, particularly in:

– Development of luxury properties – Second home projects – Commercial real estate in tourist areas

Information technology

The Bahamas is seeking to position itself as a technology hub in the Caribbean. Emerging opportunities in:

– Cloud computing services – Software development – Cybersecurity solutions

Renewable energy

With a growing commitment to sustainability, The Bahamas offers prospects in:

– Solar energy – Offshore wind energy – Energy storage technologies

International trade

The strategic position of The Bahamas makes it an ideal location for:

– International trading companies – Logistics and maritime transport services – Regional distribution centers

Creative industries

The Bahamian government encourages the development of creative industries, offering opportunities in:

– Film and television production – Video games and animation – Fashion and design

Recruiting in The Bahamas: Strategies for Building a High-Performing Team

Although many offshore companies in The Bahamas don’t need local employees, some businesses may wish to establish a physical presence in the country or recruit staff for specific operations. Here are some strategies for effective recruiting in The Bahamas:

Understand the local labor market

The Bahamas has a well-educated workforce, particularly in the tourism and financial services sectors. However, for some specialized positions, you might need to recruit internationally.

Use local resources

– Recruitment agencies: Several reputable recruitment agencies operate in The Bahamas and can help you find the right candidates. – Online job sites: Platforms like BahamasLocal.com and Caribbean Jobs are popular for local recruiting. – Professional networks: Establish contacts with local chambers of commerce and professional associations.

Comply with Bahamian labor laws

Make sure you understand local labor laws well, particularly regarding:

– Employment contracts – Minimum wages – Paid leave – Social contributions

Obtain necessary work permits

If you recruit non-Bahamian employees, you will need to obtain work permits. The process can be lengthy and costly, so it is recommended to work with a local lawyer specializing in labor law.

Offer attractive packages

To attract the best talent, consider:

– Competitive salaries – Attractive social benefits (health insurance, retirement) – Training and professional development opportunities

Promote cultural integration

If you recruit internationally, implement integration programs to help new employees adapt to Bahamian culture.

Invest in training

Consider implementing training programs to develop the skills of your local employees, particularly in technical or specialized fields.