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JULY 2013
Legal Expert Board
29
Offshore Companies The Bahamas
To find out more about the issues surrounding offshore companies, Lawyer Monthly speaks to Jacy Whittaker, senior litigator and partner at Parris Whittaker in the Bahamas. Jacy has built a reputation as a fiercely energetic lawyer with expertise across the legal sector including probate, commercial, admiralty and corporate law, for both domestic clients and multi- national corporations.
What are the main benefits for companies choosing to invest in offshore jurisdictions?
Investing in offshore jurisdictions is a compelling prospect for large and small companies wishing to legitimately lighten their tax burden, and benefit from greater anonymity and privacy. Some jurisdictions – such as the Bahamas – are entirely free from income tax, corporation tax, wealth tax and VAT. Other jurisdictions may levy such taxes but at significantly reduced rates. In addition, lower levels of regulation may open up a broader range of investment options, such as hedge funds.
In your opinion, what do you think was the most important legislative change for this sector?
Whilst the vast majority of companies will wish to benefit legitimately from offshore investment with full transparency, governments have shown themselves keen to restrict the ways in which companies are able to benefit from a reduced fiscal burden. The cross-jurisdiction Organization of Economic Co-operation and Development (OECD) is making efforts to crack down on multi-national corporations seeking to evade tax through offshore investment, with the effect that in fact offshore companies are increasingly transparent and well-regulated. The OECD ‘White List’, which comprises 85 countries (including the Bahamas) meeting stringent international standards on the exchange of tax information, provides a compelling incentive for jurisdictions to improve their transparency and adherence to the legislative framework. In October 2012 the OECD launched its ‘Tax Inspectors Without Borders Scheme’, affirming the need for jurisdictions to continue to effectively regulate offshore investment.
The Bahamas is a world leader in meeting the
demand for better transparency in offshore investment. It has entered into 24 tax information exchange agreements (TIEAs) in total, and passed the International Tax Cooperation Act in 2010.
What are the main legal implications that companies should be aware of when looking to invest in your jurisdiction?
We ensure that offshore companies seeking to take advantage of the Bahamas’ White Listed status are fully aware of the regulatory requirements, and of administrative details unique to the Bahamas.
Offshore investment in the Bahamas is governed primarily by the International Business Companies Act 2000. Companies created under this act are not required to file annual returns, but are required by law to pay an annual fee calculated as a proportion of its capital.
What are the main types of cases you deal with?
Our clients include companies with limited liability or limited by guarantee; local, foreign and joint venture investors; Segregated Accounts Companies, International Business Companies and registered foreign incorporated companies.
What are the main challenges your clients face and how do you help them to navigate them?
The main challenge facing our clients is ensuring they adequately meet the strict requirements for government licences, certificates and approvals – in addition to ensuring they are able to access all the available benefits and concessions.
A key challenge will be meet to meet the requirements for achieving International Business
Company (IBC), which include refraining from local business activity, unless permission is explicitly obtained; and from undertaking banking, insurance, company management or registered facilities for Bahamian incorporated companies. We also ensure clients are clear on the benefits of operating as an IBC company, including that that only one director is required, and that there are no accounting or reporting requirements.
Is there anything else you would like to add?
Our priority is to ensure that depending on the nature of their business, our clients are properly informed of both their compliance requirements and the numerous benefits available to offshore operations – including the best locations for the establishment of their business. We liaise closely with tax and investment advisers to identify the best corporate structure, whether a standard structure or customised to meet our clients’ needs. Our working relationships with professional colleagues, government agencies and the provide sector ensures our clients receive the maximum return on their investment. LM
Jacy Whittaker Partner
PARRISWHIttAKER
t: +1 242 352 6110 E: jw@parriswhittaker.com W: www.parriswhittaker.com