Bahamas: Offshore Business Sectors
Financial Holding and Investment
More than 90,000 International Business Companies have been formed in the Bahamas, many of them as holding companies for investment or trading activity in other countries. Since there are no corporation or income taxes in the Bahamas, it is a very effective financial base, although like all low- or no-tax financial centres, it is vulnerable to 'Controlled Foreign Corporation' legislation if the Bahamian company is majority-owned by a mother company in a high-tax country.
The very rapid recent growth in IBC incorporations has been fed by political instability in Latin and Central America, and more recently the handover of Hong Kong to mainland China. Many of these newer IBCs have been formed as asset protection vehicles, sometimes in association with trusts, either to hold shares or other types of asset. The Bahamas are one of the most popular jurisdictions for these markets, because of the flexible IBC legislation, good secrecy, good reputation, and high-quality professional services.
Following pressure from the OECD in 2000, Bahamas passed the the International Businesses Companies Act 2001 under which IBCs are required to submit their identities, addresses and names of directors and owners to the Registrar General's Department.