An IBC will be exempt from the Exchange Control Regulations and no application need be made to The Central Bank of the Bahamas in connection with its incorporation or the issue or transfer of its shares or other securities.
Incorporation can take place immediately after its name is approved by the Registrar General. The shareholders have limited liability; the name can end in the word "Limited" or "Corporation" or "Incorporated" or "Societe Anonyme" or "Sociedad Anonima", or their respective abbreviations. No provision is made for companies limited by guarantee or with unlimited liability.
Exemption from taxes and estate duties and Exchange Control Regulations for a period of 20 years from the date of incorporation of the IBC. All transfers of property to or by an IBC, and all transactions in respect of its securities and debt obligations and all transactions relating to the business of an IBC are exempt from the payment of Bahamian stamp duty for 20 years from the date of incorporation of the company.
It may not carry on business with persons resident in The Bahamas, and may not own an interest in real property in The Bahamas except to lease a property for use as its own office from which to communicate with its shareholders or where its books and records may be prepared and maintained. It may not carry on any banking business or insurance or re-insurance business.
An IBC may issue registered shares, bearer shares, par value and no par value shares, and unnumbered shares, and shares of different classes, options and warrants, redeemable and convertible shares.
An IBC may purchase, redeem or otherwise acquire and hold its own shares, i.e., "treasury shares" and capital may be transferred to surplus for the purpose, subject to certain limitations. A company's capital will be outstanding shares plus treasury shares.
An IBC requires only two registered shareholders, and one director, which may be a corporate director.
Neither shareholders nor directors need be resident in The Bahamas, and there is no requirement that shareholders' or directors' meetings be held in The Bahamas.
It is necessary to keep share register but the registered shareholders may be nominees, or "bearer". There is no requirement to keep a register of directors, and there is no requirement for a Public Register of members or directors.
The share register is available for inspection by shareholders of the IBC, or by an order of a Bahamas Court at the request of a shareholder. The identity of beneficial owners of shares and the identity of directors need not be filed or placed on record.
There is no requirement to hold an annual general meeting or to file an annual return with the Registrar General.
The doctrine of ultra vires has no application to an IBC.
An IBC may issue shares in payment of a dividend. Dividends may be paid out of any assets provided that the directors are satisfied that the company will be able to satisfy its liabilities as they become due, and that after the payment of the dividend the realizable value of the assets of the company will not be less than the sum of its liabilities and its capital.
There are no special requirements regarding loans and borrowings by an IBC. It may guarantee the indebtedness of any other person and mortgage its assets as security, and may transfer its assets to trustees for the benefit of the company, its creditors, shareholders and others.
There is no requirement that an IBC keep any accounts or appoint an auditor.
Directors' meetings and shareholders' meetings may be held by telephone conference call. Resolutions of directors and of shareholders need not be passed at a meeting but may be consented to in writing or by means of electronic communication. There is no need for special resolutions.
The Act contains provisions for the protection of the assets of the company for the benefit of the company, its creditors and its shareholders, and provisions protecting the company and its shareholders against seizure of the assets of the company by any governmental authority outside The Bahamas.
The Act contains provisions for the protection of minority shareholders. Shareholders may requisition a meeting of shareholders.
An IBC must have a Registered Office and a Registered Agent in The Bahamas.
An IBC may continue in existence although its situs is transferred to another jurisdiction. Similarly a foreign company which qualifies as an IBC may continue in existence as a company registered under the Bahamian IBC Act. A company incorporated under the laws of a foreign jurisdiction which would satisfy requirements for an IBC in The Bahamas may provisionally register as an IBC in order to become an IBC at a future date.
A Bahamian company incorporated under The Companies Act if it qualifies as an IBC may continue as an IBC under the Act, and thus again exemption from Bahamian exchange Control Regulations and stamp duty and pay lower annual maintenance costs.
The Registrar General will have the power to remove an IBC from the Registrar if it has not paid its fees by December 31 in any year. Fees fall due on July 31 annually.
Formation and filing fees:
* For an IBC with an authorized share capital not exceeding US$ 5,000.00: Formation Fee $ 900.00 Annual Government Fee $ 100.00 * For an IBC with an authorized share capital not exceeding US$50,000.00: Formation Fee $1,100.00 Annual Government Fee $ 300.00 Administration Fees $1,500.00
Investment Account Administration .50% p.a. on assets (inclusive of administration services, minimum $2,500 p.a.)
Trading Companies .75% p.a. on gross annual turnover (inclusive of administration services, minimum $2,500 p.a.)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.