Following is a summary of some of the benefits afforded to companies incorporated under the provisions of The International Business Companies Act of 1990 ("The Act"). The Act was established with a view enabling The Bahamas to more effectively compete with other tax haven jurisdictions having similar laws.
The International Business Corporation ("IBC"), being tailored for the offshore market, is prohibited from engaging in certain activities. These activities include; doing domestic business with, or having as shareholders, owning real property in The Island of registration carrying on banking, trust, or insurance business; and the provision of registered office facilities. In such cases, an ordinary corporation under the Companies Act of 1992 ("a Domestic Corporation"), would be appropriate. In addition, an IBC must have a Registered Office, and Registered Agent.
Incorporation is immediate upon lodging the requisite Memorandum of Association with the Registrar of Companies. The Certificate of Incorporation is usually issued within 48 hours of filing. Furthermore, proposed corporation names may be approved and reserved in advance over the telephone through this office.
Any of the words; Limited, Incorporated, Corporation, Societe Anonyme or Socuedad Ananima, or their respective abbreviations, can be used to denote the compulsory indication of limited liability.
An IBC may operate with a single shareholder. However, there must a minimum of two directors/officers of the Corporation who may be a citizen of any country. All of the foregoing capacities may be filled by a corporate entity, rather than an individual, if desired.
The act allows an IBC to engage in any lawful activity thereby avoiding the use of lengthy objects clauses as a means of circumventing the now obsolete doctrine of "ultra vires". However, restrictions upon the objects of an IBC may be included in the Memorandum if desired.
There are no financial or other returns required in respect to an IBC, It is only necessary for an Annual Director's meetings to be held anywhere in the world, and may be conducted by telephone.
No public record is maintained to identify the shareholders, and the Share Register may be kept in electronic form.
An IBC must issue registered shares. Shares can be issued with or without par values and in fractions. Capital can be expressed in any currency, and, subject to certain restrictions, reduction of capital can be achieved by the simple expedient of a Director's resolution without court sanction.
Annual operating expenses are considered lower than that for Domestic Companies. IBC's are not required to file annual corporate reports or tax returns.
There is a guaranteed 20 year exemption from any corporate tax, from any taxes on income or distributions, and from the provisions of the Stamp Act in relation to such matters as transfers of the corporation's property, transactions in respect of its shares, debt obligations or other securities, or other transactions relating to its business. The Act also seeks to render some protection from the long arm tactics of foreign revenue laws. Application may be made to the Jurisdictions Courts for an order that an IBC:
(a) disregard the action of a foreign government which
expropriates, or imposes confiscatory taxes on the
shares or other interests of an IBC; and
(b) treat as members, or interested holders, person(s)
whose shares or interest are subject to the action
by the foreign government. Furthermore, corporate
domicile can be changed to another jurisdiction.
The IBC is similarly exempt from Exchange Control Regulations and no reference needs to be made to Bahamas Exchange Control, either in connection with the formation or holding of shares. The IBC is also free to open and operate foreign currency bank accounts without recourse to the Central Bank of The Bahamas.
Both Domestic and foreign companies may be continued as IBCs in the latter case without the need for reciprocal arrangements with the jurisdiction of original incorporation.
Merger and consolidation may be achieved between two IBCs (including a parent with a subsidiary), or between an IBC and a Domestic Corporation or Foreign Corporation, provided, in the latter two cases, the surviving entity meets the requirements of an IBC.