New IBC Regime Gives Bahamas A Competitive Edge

by Amanda Banks, Tax-News.com, London

25 August 2004

Changes to International Business Company legislation in the Bahamas will provide financial service providers in the jurisdiction with one of the most modern and competitive legal frameworks in the offshore finance industry, Minister of Financial Services & Investments, Allyson Maynard-Gibson has claimed.

"The Bahamas IBC Act represents modern company legislation and contains the most advanced and innovative company and investor-oriented provisions in company management and administration available today," observed Ms Maynard-Gibson, according to a Nassau Guardian report.

One of the key changes to the legislation, the Bahamas Financial Services Board revealed in the report, is the continuation of an IBC as a Bahamian company under the Companies Act, an arrangement that it explained does not exist elsewhere.

In the Bahamas, an IBC and its shareholders are exempt from income tax, corporation tax, capital gains tax or any other tax on income or distributions accruing to or derived from the IBC.

In addition, the new Bill enables an IBC to be licensed as an external insurance company, which should boost the jurisdiction’s competitiveness in the offshore captive and insurance market, says the Bahamas Financial Services Board.

"A Bahamian-incorporated IBC allows a client to operate many aspects of a business with ease and confidentiality, with the additional benefit of tax neutrality," observed Maynard-Gibson in conclusion.

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