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The Bahamas is amongst the best known and longest established international financial services centres. As such it offers a very broad range of financial services including banking, trusts, company formation, international life insurance, captive insurance, mutual funds, shipping and aviation registry and much more.

The Bahamas provides a tax neutral environment for international business. There is no direct taxation, i.e. on capital gains, corporate earnings, personal income, sales, inheritance or dividends.

Being such a well-established centre, The Bahamas offers an exceptional financial services infrastructure with a wide choice of banks, trust companies, lawyers, accountants (all of the Big 4), and other professionals.

The Government of The Bahamas is committed to development of the industry, and to maintaining The Bahamas as a well-regulated, responsible jurisdiction. At the same time, close consultation between Government and the private sector helps to ensure regulatory flexibility and a very business-friendly environment.

International insurance is becoming an increasing focus of interest in The Bahamas as clients seek alternative domiciles to conduct international life insurance business and to incorporate offshore captives. Policies issued by Bahamian international life insurers benefit from some of the strongest asset protection provisions applicable to life insurance anywhere in the world. While a very flexible regulatory framework already exists for the formation of captive insurance companies, new legislation, currently being drafted, promises to make The Bahamas even more attractive as a captive domicile.

The establishment, licensing and operation of captive insurance companies are governed by the External Insurance Act 1983 as amended and by subsidiary legislation. The Registrar of Insurance is responsible for administering the Act and is the industry regulator. Principal features of the regulatory requirements are:

• Captives must be registered as External Insurers under the Act;
• Minimum of two directors (no requirement to appoint local director);
• Not required to hold board meetings in Bahamas;
• Captives must appoint a licensed resident underwriting manager;
• Annual audit of all captives to be submitted to the Registrar;
• Actuarial valuation of life insurers at least every 3 years;

Companies carrying on long-term (life) business must have paid in capital of at least $200,000.

Companies carrying on general business must have paid in capital of at least $100,000 and must maintain a net worth based upon net premium income, as follows:

Government fees are payable as follows:

When applying for registration as an external insurer, the applicant company must provide a detailed business plan and financial projections.

Applicants should allow approximately 12 weeks for the establishment of new external insurers.