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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 in mind.

“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," she explained.

"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 other.

  • The PTC may be established during or after the life of the designated person(s).

  • 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
    designated persons.

  • Directors of the PTC are not required to be resident in the Bahamas.

  • 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.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Bahamas News

Cayman Islands Named Leading Specialized IFC
Friday 8/9/2017
The Cayman Islands has again been named the world's number one specialized financial center by the Banker magazine, part of the Financial Times Group.

Bahamas Launches Online Portal For Incorporation Filings
Thursday 7/1/2016
The Bahamas has launched a new electronic platform that enables users to reserve company names, incorporate in the Bahamas, order or file company documents, search company details, and pay annual fees.

Bahamas Seeking To Upskill Financial Services Workforce
Wednesday 23/9/2015
he Bahamas Minister for Financial Services has emphasized the importance of the financial services industry for the territory, urging the industry to build on the expertise of local personnel.

Bahamas FM Comments On Financial Services
Wednesday 26/2/2014
The Bahamas aims to actively engage with changes in the international financial services landscape brought about by the Global Forum on Transparency and Exchange of Information for Tax Purposes and other international bodies, Minister of Financial Services Ryan Pinder said.

Bahamas FM Encourages Entrepreneurship In Compliance
Thursday 17/10/2013
The Minister of Financial Services in the Bahamas, Ryan Pinder, said recently that there is growing opportunity in the territory for entrepreneurs to specialize in compliance as proposed international mandates have created a growing need in this area.

Bahamas Makes Statement On FATCA
Thursday 15/8/2013
In his contribution to the House of Assembly, on August 12, 2013, Minister of Financial Services Ryan Pinder said that the Bahamas Government has agreed that the country will achieve compliance under the United States Foreign Accounts Tax Compliance Act by negotiating and entering into a Model 1 Intergovernmental Agreement with the United States Department of the Treasury.

AML Standards Highest In Offshore Territories
Thursday 27/9/2012
A new study from the Centre for Governance and Public Policy at Griffith University, Australia, has confirmed that a number of offshore territories have substantially stronger safeguards in place to prevent the use of shell companies for anti-money laundering and terrorism financing purposes than many advanced onshore nations such as the United Kingdom and the United States.

Bahamas Touts Fund Sector Innovations In Brazil
Wednesday 26/9/2012
A financial services industry delegation from the Bahamas has held two events to drum up business from Brazil by promoting the island's unique offerings in the funds and private wealth management sectors.

OECD Publishes Seven Country Reviews On Tax Transparency
Thursday 28/4/2011
The Organisation for Economic Cooperation and Development has published two new reports in its assessments of countries’ frameworks for facilitating the tackling of tax evasion through tax information exchange.

Judge Defends Bahamas
Monday 23/8/2010
A Supreme Court judge in the Bahamas has in a recent judgement spoke out against the labeling of tax minimization arrangements in the Bahamas as ‘fraudulent activities’, underscoring that in English and international tax laws tax avoidance by way of tax-efficient planning through the use of tax neutral jurisdictions remains legal.