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Bahamas company formation has grown in the recent past due to the introduction of the new Company’s Act of 1992. However, for any investor, who wants to be incorporated in the Bahamas company formation, is required to produce a memorandum of association. The new company act dictates that the memorandum of association is supposed to be filed in the office of the registrar general. Another document that should be filled is the articles of association which should accompany a memorandum of association or it must be submitted by the promoters of the company within the duration of six months. The articles of association are supposed to be signed and there should be one person to act as a witness. On the other hand, the memorandum of association should be signed by a least number of two subscribers. There should be at least one person to witness the signing.

Bahamas company formation requires that any person who is a subscriber must be ready to subscribe for a minimum of one share. If there is any nonresident subscriber, he must be able to get permission for the exchange control. Another document that must be submitted with the memorandum is a declaration that is fully signed by the attorney together with the counsel regarding the capacity of those people who want to be incorporated. Another very important document that is submitted is the clause that specifies the liability of the shareholders. There should be clear guidelines that show the liability of the shareholders and to what extent is it limited to.

When it comes to foreign companies that want to be incorporated in the Bahamas Company formation, they have to follow some laid down procedures in order for them to be fully accepted to do business. For instance, they are supposed to make a statement file that is in the form of an application approval.  The statement file should be able to give the details about the name of the company together with the area of operation it is incorporated. The statement filed must show the actual date of the company incorporation. The documents must be able to show the way in which it was incorporated and with all the relevant information on the corporate instruments. If there is any fixed period of doing business, it has to be clearly shown.

Another important requirement for the Bahamas company formation by the foreign investors is the specification that shows the extent to which the shareholders of the company are liable in case of any debts that has to be settled when winding up the company. According to the Company Act of Bahamas Company formation, there should be the undertaking of the company on how it will conduct its business. The foreign investors must also be able to show the three categories of capital and these include the authorized, subscribed and the paid up capital of the company. There should also be a clear distinction in terms of the shares that are supposed to be issued and the face value of those shares.

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There are certain laws that have been put in place in the Bahamas to make sure the Bahamas Company Formation process goes smoothly.

According to the law on Bahamas Company Formation, two or more people can be involved in the incorporation process. This is done when the persons subscribe to a memorandum. This process can only be carried out by a licensed bank of trust company. A company can only be incorporated if it is not involved in any form of criminal activity. The business operations carried out by the company should not be prohibited by the country’s laws.

If there is evidence that indicates that a business is involved in criminal activities after Bahamas Company Formation, the registrar general will remove the company from the list. Before this happens, the company is given a chance to plead its case within 7 seven days.

Bahamas Company Formation also considers personal liability when a company is in trouble. The law indicates that members, directors, agents, officers and company liquidators will not be held responsible for any company problems unless there is evidence to show that they acted in bad faith. The company memorandum will determine the liability the members will be responsible for. The amount of liability will be determined by the number of unpaid shares the members hold or the responsibility each has to contribute to the company assets when it winds up.

Bahamas Company Formation laws also allow companies to be limited by a guarantee or shares and in some cases; they can be limited by both.

The laws also give companies the power to be involved in all the activities that will assist them to achieve their objectives as long as they as they are not criminal. These activities include issuing registered shares, voting shares, non-voting shares, unnumbered shares, no par value shares, common shares, redeemable shares and preferred shares.

The memorandum required in Bahamas Company Formation has to have the company name, site of company’s location in the country, the reason why the company was incorporated, the currency the company will use to issue shares, the authorized capital if the company is limited by shares and a statement indicating the amount each member will contribute to company assets when it winds up.

During Bahamas Company Formation, the Articles of Association have to be subscribed by 2 people and a witness has to be present. The law requires this document to be filed at the registrar general’s office when you are filing the memorandum. A certificate of incorporation will only be used when these two documents are filed. If the company shares do not meet the minimum requirements, the registrar has the power to halt the registration process.

Once a certificate of incorporation is issued by the registrar, the company becomes a corporate body that is limited by the memorandum and the provisions made in the laws related to offshore companies. The certificate will indicate that the company has complied with all the requirements that have been set up by the law.

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The Bahamas Company formation procedures have been designed with a particular focus on foreign investments. The state has uniquely designed products geared towards attracting more foreign capital. The state has an array of massive tax exemption offers that run from corporate to personal and sales, estate or inheritance tax waivers, all aimed at promoting investments. The presence of an Industries Encouragement Act, which not only allows total exemption from import duties but also scraps all taxes that may be charged on new developments for approved industries, can attest to this fact.

Other great incentives are contained in the Hawksbill Act which guarantees a tax free regime in development of Freeport area. The latest Bahamas Free Trade Zone Act, the Export Manufacturing Industries Encouragement Act, the spirits and Beer Manufacturing Act which has been enhanced to allow duty free importation of construction materials and raw materials.

And the list is endless. Investors intending to incorporate in the hotel industry will enjoy the valuable provisions contained in the Hotels Encouragement Act which has been amended to allow massive tax emption on large new hotels for up to 20 years with reductions for the next 10 years.

Companies incorporating in the agricultural sector will be covered under the Agricultural Manufacturers Act which allows for tax waivers on the machinery and raw materials for setting up an agricultural factory.

Provisions in the newly amended Tariffs Act are highly commendable and will allow new investors to enjoy duty exemptions in the construction of family islands.

Company formation process has been reduced into a one stop shop and investors will need to submit their applications directly to Bahamas Investment Authority which is established under the Foreign Investment Law of 1993.

The government has adopted a policy which favours formation of foreign companies in every sector of the economy. The strategy is already bearing fruit and the country has been able to register over 80,000 new companies, majority being incorporated as International Business Companies (IBCs) for either investment or trading activities conducted in other countries.

Most new companies incorporate in tourism related sector and the banking related services. The enactment of a revised foreign landholding Act in 1993 worked wonders as new companies rushed to incorporate in the area.

To incorporate as an IBC, new companies will need only one person or a judicial officer to serve in the position of a director. Unlike in other areas that may demand three people to act as directors, the Bahamas law favours only one person in the position of a director.

Further, the law allows that shares be issued either in bearer or registered form. Investors will however not be subjected to another process to register the shares nor are they required make a disclosure in the public record.

However companies incorporating as IBCs are not allowed to engage in a business enterprise in Bahamas nor can they own real estate. They are also barred from earning interests from Bahamas Bank Accounts without being subjected to taxation. The tax regime may only be relaxed for twenty years after which it is imposed

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Over the last ten years Bahamas country has grown to be one of the best places that is a potential growth for international business. Several factors have been attributed to these growth and these include the flexibility of the laws, Low corporation tax, developed infrastructure system and the investment incentives that are provided. There are very many features that are associated with the Bahamas company formation for instance the availability of the different types of companies. You can decide to join any company of your choice and these include the private or the public limited companies.

One common feature that has made Bahamas company formation to be very popular is the regulation that allows one director and one shareholder to be able to conduct their business. There is no requirement that you must have a certain number for you to be allowed to do business in Bahamas company formation. Another notable feature is the fact that there is no requirement that the directors and the shareholders must be residents of Bahamas. The directors or the shareholders can come from any part of the world and they need not to provide for their nationalities when doing business.

By investing in Bahamas company formation, there is no minimum capital required for the business to start trading. Any capital of doing business may be accepted and the shares that are traded should be registered and ready to be traded in any currency. In the Bahamas international business, the accounts are not kept but for those people who wish to keep the accounts there is no provision that they have to be audited.

There is a provision for the share register to be kept but the process of shareholders nominees is unclear and the company should make their own decision. When it comes to rules governing the meetings they are very flexible as the meetings can be conducted on any part of the world. Sometimes the meetings can be held by use of electronic media and telephones as physical presence is not a must. There is a provision that the memorandum of association together with the articles of association documents should be held and provided in public.

There is also a new legislation that provides for the protection of the assets from any action that originates from outside the Bahamas. There is also another provision for the small groups of shareholders who are the minority group to be protected.

The investors also do enjoy the exemption from paying taxes and stamp duties that are charged for a period of 20 years since the time of incorporating the company. Any company that is foreign but it is registered by the Bahamas company act of 1992 can be able to change its status but under some conditions. For instance, the company is not supposed to do any business with the Bahamas residents. The company should not have an interest in owning the real property. There are some types of businesses that are not allowed to be traded in the Bahamas like the insurance and banking business.