The Flexibility of Bahamian IBCs
Imagine a company which is not required to file the identity of its shareholders; no need to file any financial statements or keep any accounts. Imagine that such a company can be incorporated in an economically and politically stable country which is a member of the British Commonwealth and which imposes no income, capital gains or inheritance tax.

These companies, which are incorporated in the Bahamas under the International Business Companies Act, 2000 are state of the art vehicles designed with the offshore investor in mind. They are easily incorporated, infinitely flexible and inexpensive.

Getting to know the Bahamian IBC
A Bahamian IBC is permitted to engage in any activity, which is not unlawful in the Bahamas. There is no restriction on IBCs engaging local professionals such as lawyers to represent them or establishing bank accounts or brokerage accounts with local institutions.

Bahamian IBCs are specifically exempted from any form of income tax, capital gains or transaction tax for a period of twenty years from the date of incorporation. There may be tax consequences in the investor's country of residence and the investor should seek advice there before acting, but there simply are no tax considerations in the Bahamas. An IBC may conduct its business in any foreign currency it chooses free of Bahamian Government regulations or restrictions.

An IBC requires only one director. This may be a natural person or a corporate entity, and meetings of directors may be held in any jurisdiction, with participation by telephone or other simultaneous electronic link.

So what do people use IBCs for?
Many people are concerned to protect themselves and their families from economic and political uncertainty in the country in which they live by lodging some of their assets in other jurisdictions thereby diversifying their holdings. Others are concerned about lawsuits arising unexpectedly from their professional and personal lives and therefore establish an asset protection trust in an offshore jurisdiction.

Bahamian IBCs can be part of these strategies. The marvelous thing about them, however, is that they can be used for these and many other purposes. At the simplest level, IBCs are often used by persons who want to diversify their holdings to establish bank accounts or brokerage accounts in the Bahamas or elsewhere.

In addition, trusts established in the Bahamas will often incorporate a Bahamian IBC, which serves as the asset holding device for the trust. This provides an extra layer of insulation and privacy for the trust, as there is then no need to reveal the existence or details of the trust to third parties. Banks and brokers are generally comfortable dealing with the IBC - a vehicle they know and understand.

There are a myriad of other uses for IBCs including possession of title to real estate, collection of commissions, e-commerce and re-invoicing forward transactions.

In addition, Bahamian IBCs with specialized Memoranda and Articles of Association are also used to create offshore mutual funds (now subject to regulatory supervision under the Mutual Funds Act 1995), and are used as general and limited partners under the Exempted Limited Partnership Act, 1995.

Getting Started
IBCs can be incorporated in less than three working days. As to what this will cost, an IBC can generally be incorporated and managed in its first year (to the end of December in that year) for an all inclusive fee of B$1,250.00. In subsequent calendar years, the cost including the annual government license fee and ongoing management fees can be as little as B$1,000.00. Where authorized capital requirements exceed the minimum, or where Bahamian practitioners are asked to serve as directors of the company, additional costs may apply. However, a Bahamian IBC can allow offshore investors to establish themselves in a stable, reputable jurisdiction at a very reasonable cost.

To prepare the incorporation documents, Bahamian practitioners will need to know the proposed name of the company, its authorized capital, names of persons to be appointed as directors and related details. Those details concerning ownership and control of the company are strictly private but are required for the company's records which are secured within the company's registered office.

Once the Companies Registry has given its approval for the proposed name of the company, incorporation may be completed in less than three working days.

Conclusion
The Bahamian IBC is a highly flexible corporate vehicle and is ideal for the offshore investor who requires a company which can be incorporated quickly and at a reasonable cost.

Beyond that, the Bahamas has established itself as one of the premiere offshore jurisdictions in the world. It has a well-deserved reputation for economic and political stability, and for the professionalism of its financial institutions. All this and sunshine as well. What better location can there be in which to test the waters offshore?