The Commonwealth of The Bahamas is an archipelago spanning 100,000 square-miles extending southeast from Florida in the United States of America to northern Hispaniola. The Bahamas has an estimated land area of 5,400 square miles made up of some 700 islands and 2,400 cays.
The country’s mature financial services industry, established infrastructure, progressive government, tax neutral environment and luxury lifestyle all have been cultivated very carefully to position it as a center for international business.
International business companies (IBCs) pay an annual license fee based on authorized capital. Government fees related to the creation of an IBC equal BSD 330. The annual license fee is BSD 350 if turnover is less than BSD 50,000, and the fee is BSD 1,000 if turnover is BSD 50,000 or more.
IBCs are exempt from all other taxes (except potentially value-added tax (VAT), effective from 1 January 2015) and stamp duties for a period of 20 years from the date of incorporation, except for transactions involving real estate in the Bahamas. IBCs are normally created through service providers that charge separate fees for their services.
Limited duration companies (LDCs) pay an application fee of BSD 850 and an annual license fee based on authorized capital. LDCs may be classified as partnerships for US tax purposes. By complying with certain formalities, an existing IBC may change its status to an LDC.
There is no withholding tax on repatriation of profits, repayment of capital and loans or payments of royalty’s by a Bahamas resident company.
The Bahamas does currently not have any existing tax treaties. The Bahamas has entered into tax information exchange agreements with various countries.