Globe Capitalist / Company formation / Bahamas

Company formation

Located in the Atlantic Ocean, The Bahamas offers a favourable environment for opening companies due to its advantageous tax policies. In our guide, we explore the opportunities offered by the country, the types of companies available, the tax system and more.

Company incorporation in The Bahamas. Types of companies, advantages and taxes
The Atlantis Paradise island resort, Nassau

With a stable political system, the Bahamas prides itself on providing a conducive environment for international businesses. The nation boasts a robust financial sector that is well-regulated, ensuring transparency and trust for investors. The Bahamas’ strategic location serves as a gateway between the Americas, offering unparalleled access to markets in both North and South America. Moreover, the local government is committed to fostering a business-friendly ecosystem, facilitating processes and offering several incentives for foreign investors. Such dedication to international commerce underscores why the Bahamas is often considered a premier destination for global businesses.

Country Bahamas
Language English (official) (100%)
Time in Bahamas GMT-5
Population Approximately 393,000 (Source: World Bank, 2021)
Currency Bahamian dollar (BSD$ or $, BSD)
Religion Protestant (95%)
Roman Catholic (4%)
Other (1%)
Tax regime No personal income tax, corporate income tax, capital gains tax, value-added tax (VAT), or wealth tax. Business license fee applicable.
VAT 12%
Overage salary Data not available for 2023. Consult recent labor market reports or national statistical agencies for updated figures.
Types of incorporations International Business Company (IBC)
Domestic Company
Exempted Limited Partnership (ELP)
Segregated Accounts Company (SAC)

Why opening a company in Bahamas

Establishing a company in the Bahamas is an astute choice for entrepreneurs looking for tax-friendly jurisdictions. Given its no personal income tax regime, the Bahamas is particularly suitable for high-net-worth individuals and corporations that aim to optimize their tax obligations. Furthermore, the country’s strategic location and established financial services sector make it an excellent base for enterprises involved in international trade, banking, and investments.


Stable Political Environment

The Bahamas boasts a longstanding tradition of political stability, which provides a safe and predictable environment for businesses. The confidence in the governmental framework and institutions ensures a hassle-free experience for foreign investors and entrepreneurs.

Tax Benefits

One of the primary attractions of the Bahamas for businesses is its favorable tax regime. The country does not impose taxes on personal income, corporate earnings, capital gains, or inheritance, making it a tax haven for global investors.


Limited Domestic Market

While the Bahamas offers a plethora of advantages, the size of its domestic market is relatively small. This limitation might pose challenges for businesses that rely heavily on local consumers.

Dependency on External Factors

The economy of the Bahamas is largely dependent on tourism and financial services. Any global downturn affecting these sectors can have repercussions on the local business environment.


The Bahamian tax system is particularly enticing for global investors. The country does not levy personal income tax, corporate tax, capital gains tax, or even inheritance tax. However, businesses are subject to a license fee, the rate of which varies based on the type of business and its annual turnover. This system allows both individuals and corporations to optimize their tax obligations while ensuring compliance. The absence of direct taxation is balanced with other indirect taxes, like the Value Added Tax (VAT), to generate revenue for the country.

Company types in the Bahamas

Sole Proprietorship (SP)

A Sole Proprietorship is the simplest form of business structure in the Bahamas. It is owned and operated by a single individual who assumes all responsibilities and liabilities. The cost of incorporating a sole proprietorship is relatively low, and there is no minimum share capital requirement. However, it’s important to note that the owner is personally liable for all the business’s debts and obligations.

Type Cost of Incorporation Minimum Share Capital Taxes
Sole Proprietorship Low Not Applicable Individual tax rates apply

Partnership (P)

A Partnership is a business structure where two or more individuals or entities come together to carry out a business venture. In the Bahamas, partnerships can be classified as general partnerships or limited partnerships. In a general partnership, all partners have unlimited liability for the business’s debts. In a limited partnership, there are both general partners (with unlimited liability) and limited partners (with limited liability). The cost of incorporating a partnership is relatively low, and there is no minimum share capital requirement.

Type Cost of Incorporation Minimum Share Capital Taxes
General Partnership Low Not Applicable Individual tax rates apply
Limited Partnership Low Not Applicable Individual tax rates apply

Private Company (LLC)

A Private Company, also known as a Limited Liability Company (LLC), is a popular business structure in the Bahamas. It offers limited liability protection to its owners, known as members, and has a separate legal existence from its owners. The cost of incorporating a private company may vary depending on various factors, such as legal assistance and regulatory requirements. The minimum share capital requirement depends on the specific regulations and industry.

Type Cost of Incorporation Minimum Share Capital Taxes
Private Company (LLC) Varies Depends on regulations Corporate tax rates apply

Public Company

A Public Company in the Bahamas is a business entity that offers its shares to the public through an initial public offering (IPO) and is listed on a recognized stock exchange. Public companies have more stringent regulatory requirements and obligations compared to other business structures. The cost of incorporating a public company can be higher due to compliance and reporting requirements. The minimum share capital varies depending on the specific regulations and industry.

Type Cost of Incorporation Minimum Share Capital Taxes
Public Company Higher Depends on regulations Corporate tax rates apply

Exempted Company

An Exempted Company in the Bahamas is designed for international business activities and is typically used for holding assets, conducting investment activities, or operating in specialized industries. It enjoys certain tax advantages, such as exemption from local taxes and stamp duty. The cost of incorporating an exempted company may be higher due to specific requirements and regulatory compliance.

Type Cost of Incorporation Minimum Share Capital Taxes
Exempted Company Higher Depends on regulations Tax exemptions may apply

VAT in Bahamas

The Bahamas introduced a Value Added Tax (VAT) system in 2015. Currently, the VAT rate stands at 12%. This indirect tax is levied on the supply of goods and services and is borne by the final consumer. While direct taxes are absent, the VAT system serves as a significant source of revenue for the government.

Common questions

What are the requirements for incorporating a company in the Bahamas?

The Bahamas has a streamlined process for incorporating a company, requiring essential documentation, such as proof of identity, a detailed business plan, and a clean criminal record. A registered agent is also a mandatory requirement, ensuring that the company complies with local regulations and maintains good standing.

How long does it take to set up a company in the Bahamas?

Typically, the process can take between 2 to 4 weeks, given that all necessary documents are in order and no complications arise during the review phase by regulatory authorities.

Are there residency requirements for directors or shareholders in Bahamian companies?

No. The Bahamas allows for full foreign ownership, and there are no residency requirements for directors or shareholders. This flexibility makes it an attractive destination for international investors and entrepreneurs.

What are the tax implications for businesses in the Bahamas?

One of the significant attractions of the Bahamas for businesses is its favorable tax regime. Companies benefit from no corporate taxes, no capital gains tax, and no value-added tax on services. This tax structure can result in significant savings for companies and individuals alike.

Is there a minimum share capital requirement for Bahamian companies?

While the Bahamas does have share capital requirements, they are relatively modest and attainable for most businesses. It’s essential to review the specific type of company being incorporated, as requirements may vary.

Are there any restrictions on foreign ownership in the Bahamas?

The Bahamas is very open to foreign investors. There are no restrictions on foreign ownership for businesses, making it a lucrative and welcoming environment for international entrepreneurs.

How is the intellectual property protected in the Bahamas?

The Bahamas has robust intellectual property laws that align with international standards, offering protection for patents, trademarks, and copyrights. Companies can operate with confidence, knowing that their intellectual assets are safeguarded.

What are the annual compliance requirements for companies in the Bahamas?

Annual compliance typically involves renewing licenses, filing annual returns, and ensuring that the company maintains a registered office and agent in the Bahamas. Regular audits might be required, depending on the business nature.

Can a Bahamian company conduct business inside the Bahamas?

Yes, a Bahamian company can operate both locally and internationally. However, specific sectors might require additional licensing or permissions to conduct business within the country.

Is it possible to relocate an existing company to the Bahamas?

Yes, the Bahamas offers a process known as “redomiciliation,” allowing companies from other jurisdictions to transfer their domicile to the Bahamas, enjoying the benefits of its business-friendly environment without the need for re-establishing their operations.

Are there specific sectors in which foreign investors cannot invest or own businesses?

The Bahamas is largely open to foreign investment across a range of sectors. However, some areas may have restrictions or special requirements. It’s crucial to consult with local authorities or legal counsel to gain clarity on sector-specific regulations.

What is the process of closing or liquidating a company in the Bahamas?

Closing a company in the Bahamas involves settling any outstanding debts, notifying the relevant authorities, and going through a formal liquidation process. Companies are advised to consult with local experts to ensure compliance with all necessary regulations.

Are there specific employment laws that businesses should be aware of?

Yes, the Bahamas has employment laws in place to protect the rights of workers, including regulations on minimum wage, working hours, and termination procedures. Employers should familiarize themselves with these laws to ensure fair and lawful operations.

How can one transfer shares or change the ownership structure of a Bahamian company?

Transferring shares or changing the ownership structure is a straightforward process in the Bahamas. The company’s articles of association typically outline the procedure, and any changes must be documented and filed with the relevant authorities.
Company incorporation in The Bahamas. Types of companies, advantages and taxes

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