The Bahamas is an archipelagic country in the Atlantic Ocean southeast of the U.S. and northeast of Cuba. The country is a cluster of 700 islands, the majority of which are uninhabited. The province of New Providence is the most populated island and hosts the capital Nassau.
Prior to 1973, the Bahamas was a British Colony, the impact of which can still be seen in the society. The Bahamian economy relies on tourism, financial services, and agriculture. Primarily, the Bahamas is popular among tourists for its clear-water beaches, resorts, vibrant and versatile culture, colorful nightlife, and cuisine.
The population of Bahamas is 400000 and the official language is English.
Types of companies in the Bahamas
In the Bahamas, the state system that regulates businesses is very well-defined and structured. It encourges small, medium, and large investors to operate from the Bahamas by facilitating them with a number of structures and benefits.
Here are the most popular types of companies in the Bahamas:
| S# | Type of company | Local name | Min.required paid-up capital |
| 1. | Sole Proprietorship | One owner company | No paid-up capital required |
| 2. | Partnerships | No paid-up capital required | |
| 3. | Limited Liability Company | Company | $10,000 |
| 4. | Public Limited Company | Cooperative | $50,000 |
Sole Proprietorship
Also known as one-owner company in the Bahamas, this business format is feasible for small investors and startup entrepreneurs. It requires very little compliance, set-up fees, and operational costs.
Partnership
In the Bahamas there are two types of partnerships:
General Partnership
Where the partners have unlimited liability towards debts and losses.
Limited Partnership
Where one or more partners have liabilities limited to their extent of investment in the business.
Limited Liability Company
A limited liability company is a more complex business format than a partnership. An LLC is obligated to follow a certain organizational structure, is subject to state regulations, and is accountable for debts and losses suffered by its shareholders and customers. However, the owners are not personally liable for debts and losses.
Cooperative
A cooperative in the Bahamas is similar to a public limited company. A format of choice for large investors or companies that require sizeable capital to operate. This format allows companies to float their shares in the market for the general public; they can either retain their shares for dividends or trade them for a premium on a stock exchange.
Costs involved in registering and incorporating a company in the Bahamas
The cost of registering and incorporating a company in the Bahamas depends on several factors, such as the type of company, the number of shareholders, and the amount of authorized share capital.
Here are some general costs to consider:
Government fees
The government charges a fee for registering a new company in the Bahamas. The fee varies depending on the type of company and its share capital. For instance, the government fee for registering a company with an authorized share capital of up to $5,000 is $270.
Legal fees
It is recommended that you engage a lawyer to help you with the process of registering and incorporating a company in the Bahamas. Legal fees will vary depending on the complexity of the process and the services required.
Other fees
There may be other fees to consider, such as the cost of a registered office, company seal, and corporate books.
Overall, the cost of registering and incorporating a company in the Bahamas can range from $1,000 to $5,000 or more, depending on the specific requirements and services needed.
Operational Expenses of companies in the Bahamas
Operational expenses or OPEX refer to any expenses that a business incurs during normal operations. These expenses depend on the size, nature, location of the business, etc.
Some OPEX may be avoidable while others are inevitable, here is a list of the latter.
Labor costs
Labor costs in the Bahamas can be relatively high compared to other countries in the region. The minimum wage is $210 per week, and employers are obligated to provide benefits such as health insurance, pension, and paid vacation time.
Taxation
The Bahamas has no income, corporate, or capital gains taxes. Businesses however are subject to other taxes such as Value Added Tax (VAT) at a rate of 12%, real estate tax, and stamp duty on certain transactions.
Utilities
The country relies solely on imported fossil fuels to generate electricity. This in return hikes the cost of utilities such as electricity, water, and internet.
Real estate
Due to the lack of land, the cost of renting or purchasing commercial real estate in the Bahamas can be relatively high, especially in popular tourist areas such as Nassau and the Grand Bahamas.
Licensing and permits
Businesses in the Bahamas are required to obtain various licenses and permits to operate, such as a business license, work permit, and health certificate. The costs of these licenses and permits can vary depending on the type of business and industry.
Though the cost of doing business in the Bahamas is higher than in the region, however, the country’s favorable tax policies and proximity to major markets make it an attractive location for businesses.
Benefits of operating business from the Bahamas
Among the strongest points to support the Bahamas as a favorable business destination, here are a few that stand out.
Favorable tax policies
The Bahamas has no corporate, income, or capital gains tax, making it an attractive location for businesses seeking to reduce their tax burden.
Political and economic stability
The Bahamas has a stable political and economic environment, with a long history of democratic governance and a strong financial system.
Proximity to major markets
The Bahamas is located in close proximity to major markets in North America and Europe, making it an ideal location for businesses looking to expand globally.
Ease of doing business
The Bahamas ranks highly in terms of ease of doing business, with a streamlined process for company registration and a business-friendly regulatory environment.
Skilled workforce
The Bahamas has a well-educated and skilled workforce, with a strong emphasis on tourism, financial services, and other key industries.
Strategic location
The Bahamas is strategically located in the Atlantic Ocean, making it an ideal location for shipping and logistics companies.
Ease of communication
Unlike many other countries in Latin America or the Caribbean, the Bahamas is an English-speaking country, which makes communication easier and more efficient. Communication with the staff or customers and partners from around the world becomes efficient too.
