The term 'offshore' is not used in Bahamian legislation or in describing company forms. 

Abstaining from local trading activity is the key factor which allows use of the various 'offshore' corporate forms, and ensures long term exemption from taxation and some or all of stamp duty, exchange controls and business licensing requirements. Since there are no general corporate taxes other than stamp duty, there is no separate 'offshore' sector as such in taxation terms.

In the Bahamas there is no income or corporation tax, no capital gains tax, no VAT or sales tax, and no withholding tax. Companies and partnerships pay annual fees to the Government depending on their nature and capitalisation. There is stamp duty and there are some property taxes. Exempted Limited Partnerships are exempt from both, as are Trusts provided that their beneficiaries are non-resident. Banks and Trust Companies (ie administrators of trusts) are also exempt provided that they have non-resident licenses (this is a matter of practice - a license is issued as resident or non-resident depending on circumstances). 

All of the offshore entities, and non-resident domestic companies, are exempt from exchange controls. Mutual Funds are exempt from taxes and exchange controls if they have an appropriate corporate form; in practice therefore they are exempt.

Financial institutions licensed under the Banks and Trust Companies Law 1965 pay fees on registration and annual fees as follows:

Other Public Institutions' includes banks and trust administration companies; 'Restricted' banks and trusts are those that deal only with a list of customers included in their license and which cannot be altered without permission.

Captives are licensed under the External Insurance Act 1983, and pay a fee of $2,500 on registration and annually thereafter. In addition, $650 is paid annually for each underwriting manager employed by a captive insurer.

On registration, a captive insurer gains exemption from taxes for 15 years.

Resident insurance companies pay a registration fee of $1,000 and the same annually thereafter, plus 2% of gross premiums collected each quarter.

Insurance companies are not permitted to use the International Business Coimpany or LDC corporate forms, but must establish a Bahamian domestic limited company or must register as foreign companies. Captives registered under the External Insurance Act are exempt from exchange controls.

New insurance legislation is in the pipeline which will update the somewhat outdated Bahamian insurance acts.

Mutual funds and their administrators are licensed under the Mutual Fund Law 1995 and pay fees on registrationn and annually thereafter as follows:

Unrestricted mutual fund administrator: $5,000;

Restricted mutual fund administrator: $2,000;

Self-administered or single-fund administrator: $500;

Unlicensed mutual fund: $200.

The Bahamas have exchange controls, under the Exchange Control Act and Regulations 1956, applying to resident individuals and companies, who need consent from the Central Bank to conduct operations in foreign currencies. 

Likewise, non-resident or offshore companies, who are free to deal in foreign currencies, require Central Bank consent to deal in Bahamian dollars.

Residents comprise: Bahamian nationals, companies beneficially owned in the Bahamas, and companies whether Bahamanian or foreign-owned operating within the Bahamas. Foreign nationals with work permits who live in the Bahamas are also normally considered to be resident.

Non-residents comprise: foreign nationals living abroad, or, if living in the Bahamas, without the right to work there; and foreign companies and foreign-owned Bahamian companies trading exclusively outside the Bahamas.

Residents who want to make external investments in foreign currencies will usually be allowed to do so, but have to buy the foreign currency at a premium; non-residents who want to invest into the Bahamas may do so, but the opportunities for portfolio investment are very limited.

The International Business Company and its cousin, the Limited Duration Company, are not allowed to do business with Bahamian residents, but are allowed the following activities in the Bahamas:

To maintain bank accounts;

To make and maintain contact with professional firms;

To maintain books and records;

To hold meetings of directors or members;

To lease real estate for use as an office.

It is possible to obtain a license from the Minister of Finance to carry out other types of business activity on the island, if he considers it is in the interests of Bermuda.

Other offshore and non-resident entities operate under broadly similar regimes to the International Business Company.

Work permits are necessary for non-Bahamians to be employed: key (senior or specially-skilled) people are issued permits; in other cases it is wise to discuss the possibility of a permit with the Bahamas Investment Authority in advance.

Anyone wishing to reside in the Bahamas must obtain a residence permit from the Immigration Department. 

Home-owners can obtain an annually-renewable Home Owner's Residence Card which acts as a visa for entry and residence during its validity. 

Major international investors and existing owners of properties worth more than $500,000 benefit from accelerated treatment of residence applications

The International Persons Landholding Act 1993 reversed a previously deterrent stance and actively encourages the purchase of local residential property by foreigners. Acquisition of a single family dwelling or up to 5 acres of vacant land for construction of a dwelling no longer needs an advance permit, but can be registered after purchase. Rule for inheritors of Bahamian properties have been similarly relaxed. Fees for the (compulsory) registration of real estate and residence permits are as follows:

Application for registration: $25

Application for permit: $25

On issue of certificate of registration or issue of permit:

Homeowner resident card: $500