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Bahamas: Offshore Trusts Guide

Legal Framework and Formation Rules and Fees

Bahamian trust law is based on English common law, and the Bahamian Trustee Act 1893. In the last 15 or so years the Bahamas have extended and adapted their trust laws, most recently with a new Trustee Act 1998, to accommodate a wider market, which is not necessarily interested so much just in tax avoidance, but also in the efficient management of wealth in a more general sense.

Legislative amendments to allow for the formation of Private Trust Companies were put forward in May 2007.

Other legislation includes The Trust (Choice of Governing Law) Act 1989 and the Fraudulent Dispositions Act 1991. The Trustee Act 1998 repeals the Trustee Act 1983 and the Variation of Trusts Act 1983.

The Trust (Choice of Governing Law) Act 1989 gives protection to Bahamian trusts and their settlors in civil law countries against forced inheritance claims. The Act makes Bahamian law the proper law of a trust if the deed so declares, and makes the trust immune to foreign judgements.

The Fraudulent Dispositions Act 1991 establishes a two-year limitation period for creditors' attacks on asset protection trusts; the attacker has to prove fraud against the settlor.

Trusts (other than those holding Bahamian real estate) with non-resident beneficiaries are exempt from all taxes, including stamp duty on transfers into trust. Under the 1998 Act, new trusts need to be stamped with a $50 Bahamas revenue stamp (at the time of writing), which can be bought for cash and does not involve any disclosures.

 

To Read more, please visit the Offshore Trusts Guide website

 

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