Offshore Trusts Report: Bahamas
2006 Private Trust Companies Legislation
In November, 2006, it was announced by the Bahamas Financial Services
Board that comprehensive new Private Trust Companies legislation
had passed both houses of parliament.
Under the legislation, a Bahamian PTC, like other structures such
as foundations, does not require regulatory approval. The PTC need
only to arrange its affairs with a regulated Bahamian service provider
or Registered Representative.
A Registered Representative, as defined in the legislation, is
a bank or trust company or a licensed financial and corporate services
provider approved by the Central Bank of the Bahamas for the provision
of these services.
The BFSB says that this feature distinguishes the Bahamian PTC
from those that are available in other jurisdictions, and allows
for exclusive interaction between the client and its Registered
Representative without additional regulatory involvement. As a result,
client information need only be delivered to the offices of the
client’s service provider.
The framework for the PTC legislation was developed
in early 2005 by a working group consisting of the BFSB, the Association
of International Trust Companies in the Bahamas (AIBT) and The Society
of Trust and Estate Practitioners (STEP), in consultation with the
Central Bank and the government.
Wendy Warren, CEO and Executive Director of the BFSB noted that
the PTC legislation was designed with a long-term view and approach
“As much as possible we wanted to establish PTC legislation that
could stand the test of time, and provide a stable platform for
decision-making. In other words we did not take any short cuts,"
"We carefully considered a number of factors such as what the PTC
legislation intends to accomplish, our clients’ needs and the regulatory
themes that may emerge in the future. In summary, the legislation
provides clarity for clients and their advisors and a light regulatory
touch," she added.
In addition to its light regulatory touch and providing access
to a broad range of service providers, the Bahamas’ PTC legislation
has a number of other distinguishing features:
There may be more than one designated person; they must be
related by consanguinity or other family relationship to each
The PTC may be established during or after the life of the
The PTC may act as trustee to trusts settled by persons related
by consanguinity or other family relationship to the designated
person or one of the designated persons.
The PTC may act as trustee to existing trusts that meet the
above mentioned criteria.
The beneficiaries of a trust administered by a PTC are not
restricted to family members of the designated person or
Directors of the PTC are not required to be resident in the
The PTC in selecting its Registered Representative in The Bahamas
may also determine in discussion with the Registered Representative
whether it is best that the Registered Representative serves
as Director, Secretary or Bahamas Agent to the PTC.
There is no requirement for a Special Director where the Registered
Representative is a Bahamian bank or trust company. Otherwise
a director of good reputation and who possesses at least five
years’ experience in a discipline relevant to the administration
of trusts is required. Relevant disciplines include one or more
of law, finance, commerce, investment management or accountancy.
While the growth of PTCs may spur the establishment of family
offices in The Bahamas, there is no requirement for a PTC to
establish a physical presence in the jurisdiction.
The BFSB expects the PTC vehicle to be most useful to families
with operating companies, charitable foundations and wealthy individuals
from civil law countries.
In May 2007, it was announced by Parliamentary Secretary, Ministry
of Finance, Michael Halkitis that legislative amendments to allow
for the formation of Private Trust Companies had been introduced.
According to Halkitis, these amendments demonstrated the government’s
“firm commitment to ensuring the delivery of superior financial
services to local and international clients."
“This is a progressive step in the continued growth and development
of our financial services industry and of our economy," he
told a Private Trust Company seminar.
At that time, the government revealed, it was consulting with relevant
stakeholders, including the Association of International Banks and
Trust Companies, the Bahamas Financial Services Board, the Society
of Trust and Estate Planners, the Financial Services Consultative
Forum, the Central Bank of The Bahamas, various members of law firms,
the Attorney General’s Office, the Ministry of Finance, and
the Ministry of Labour and Financial Services.