Bahamas: Law of Offshore
Table of Statutes
This is a non-exhaustive list of the main Bahamas statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute, the legal regime it forms part of, or in some cases the text of the law.
Bahamas Free Trade Zone Act
Banks and Trust Companies Act 1965
Banks and Trust Companies Regulation (Amendment) Act 2000
Business Licenses Act 1980
Central Bank of the Bahamas (Amendment) Act 2000
Companies Act 1992
Criminal Justice (International Cooperation) Act 2000
Exchange Control Act 1952
Exchange Control Regulations 1956
Exempted Limited Partnership Act 1995
External Insurance Act 1983
Financial and Corporate Service Providers Act 2000 (see below)
Financial Intelligence Unit Act 2000 (see below)
Financial Transactions Reporting Act 2000 (see below)
Foundations Act 2004
Fraudulent Dispositions Act 1991
Hotels Encouragement Act
Industries Encouragement Act
Insurance Act 1969
International Business Companies Act 1989
International Business Companies (Amendment) Act 1994
International Business Companies Act 2000
International Business Companies (Amendment) Act 2004
International Persons Landholding Act 1993
Investment Funds Act 2003
Merchant Shipping Act 1976
Mutual Funds Act 1995
Mutual Legal Assistance (Amendment) Act 2000
Perpetuities (Amendment) Act 2004
Purpose Trust Act 2004
Registration of Business Names Act 1989
Securities Board Act 1995
Segregated Accounts Companies Act 2004
Trust (Choice of Governing Law) Act 1989
Trustee Act 1893
Trustee Act 1998
In the effort to bring The Bahamas' financial services sector into compliance with international standards and practices, a number of the above pieces of legislation were amended in 2000 and 2001. New laws included the Financial Transactions Reporting Act 2000, the Financial Intelligence unit Act 2000 and the Financial and Corporate Service Providers Act 2000.
The Financial Transactions Reporting Act set a deadline of mid-2002 for the identification of the owners of all accounts established prior to January 1, 2001. One of the steps taken by the new government elected in 2002 was to extend the deadline to December 31, 2002. "International and domestic financial services firms have committed tremendous effort and resources to this exercise," said the BFSB's Wendy Warren. "They indicated to government that whilst they were able to substantially complete the exercise, they were unable to meet the 30 June deadline."
The Financial Intelligence Unit Act 2000 provided for the establishment of a Financial Intelligence Unit (FIU) in the Bahamas, its function being to receive, analyse, obtain and disseminate information relating to the proceeds of offences; all disclosures of information required to be made under the Proceeds of Crime Act 2000 must be made to the FIU.
The Financial and Corporate Service Providers Act 2000, sought to have all financial services providers (attorneys, accountants, management companies, brokers, insurance companies) adhere to know-your-customer rules in a manner similar to the Banks and Trust companies. Above all, every participant in the financial services industry in The Bahamas has undergone some type of training to become familiar with the new requirements of the legislation.
In July, 2004, the Bahamas Financial Services Board announced that new legislation had been passed, designed to increase the jurisdiction's international competitiveness, included the Foundations Bill and the Segregated Accounts Companies Bill, plus amendments to the International Business Company Act, the Perpetuities Act and the Trustee Act.
The BFSB revealed that legislative priorities lined up by the government for the future include amendments to the Financial and Corporate Services Act, a new Domestic and External Insurance Act, new laws facilitating the use of Private Trust Companies and a statute to establish the Bahamas as an International Arbitration Centre.
Comprehensive new Private Trust Companies legislation passed both houses of parliament in the Bahamas in December 2006. Under the legislation, a Bahamian PTC, like other structures such as foundations, does not require regulatory approval. The PTC need only arrange its affairs with a regulated Bahamian service provider or Registered Representative.
This feature distinguishes the Bahamian PTC from those that are available in other jurisdictions, and allows for exclusive interaction between the client and its Registered Representative without additional regulatory involvement. As a result, client information need only be delivered to the offices of the client’s service provider.
The Securities Commission of the Bahamas said that one of its core goals for 2009 was enhancing the legislative framework of the Commission. Its objective was to ensure that the legislative framework supporting investment funds, securities, and capital markets is up to date. In order to achieve this goal, the Commission specifically planned to:
- finalize the draft of the Securities Industry Regulations to accompany the draft Act - which had already been released for review – and ensure an open period of consultation and collaboration with investors, industry participants and other stakeholders; (the Securities Industry Regulations 2012 were published in January, 2012);
- codify amendments to the investment funds legislation with a view to enabling provisions that maintain The Bahamas’ competitive position; and
- conduct a review of the Financial and Corporate Service Providers Act, 2000 to identify deficiencies and address with amendments, where necessary.
In July 2009, Zhibargo Laing, The Bahamas’ Minister of State at the Ministry of Finance, confirmed that a Financial Services Authority (FSA) is to be established in order to better regulate the Bahamian finance industry.
“The government is giving renewed focus to the financial services sector – the second pillar of the Bahamian economy,” Laing said.
He also confirmed plans to consolidate the islands’ financial services regulators and a twin system would be created by the end of 2009 in which there is the Central Bank and one other regulator responsible for all areas of financial services, building on oversight that currently only exists for domiciled banks and trust companies. The Authority will effectively take on the roles of the securities, compliance and insurance commissions.