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Bahamas: Offshore Legal and Tax Regimes

Exchange Control

The Bahamas have exchange controls, under the Exchange Control Act and Regulations 1956, applying to resident individuals and companies, who need consent from the Central Bank to conduct operations in foreign currencies. Likewise, non-resident or offshore companies, who are free to deal in foreign currencies, require Central Bank consent to deal in Bahamian dollars.

Residents comprise: Bahamian nationals, companies beneficially owned in the Bahamas, and companies whether Bahamanian or foreign-owned operating within the Bahamas. Foreign nationals with work permits who live in the Bahamas are also normally considered to be resident.

Non-residents comprise: foreign nationals living abroad, or, if living in the Bahamas, without the right to work there; and foreign companies and foreign-owned Bahamian companies trading exclusively outside the Bahamas.

Residents who want to make external investments in foreign currencies will usually be allowed to do so, but have to buy the foreign currency at a premium; non-residents who want to invest into the Bahamas may do so, but the opportunities for portfolio investment are very limited.

Exchange controls are gradually being dismantled, initially in respect of CARICOM, and it is the intention of the Central Bank to remove them entirely in due course.

In February 2006 the Central Bank announced the relaxation of exchange controls relating to real estate investments, foreign currency transfers, mortgages, and debt and equity instruments.

Prior to the changes, residents purchasing securities or making real estate investments overseas had to do so through the Investment Currency Market (ICM), at a premium bid and offer rate of 25% and 20%, respectively. With immediate effect, these rates were reduced by half, to 12.5% and 10.0%, respectively.

In addition, equities of Bahamian Companies listed on BISX can be cross listed on principal CARICOM exchanges (i.e. Barbados, Jamaica, ECU and Trinidad & Tobago), within prescribed limits.

Foreign companies listed on principal CARICOM exchanges may list issued and outstanding equity securities on BISX.



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