The Bahamas has become popular and well-known thanks to its legislation and regulations directed towards protecting investors and promoting business. Therefore, this country is one of the world's leading international financial centers. The Bahamian progressive legal and regulatory structure, skilled workforce and responsive government have attracted many of the world's largest and most prestigious financial institutions. Likewise, they have recognized many financial licenses, but two of the most popular ones are banking and business licences.

After evaluating different jurisdictions around the world, it was found that the Bahamas legal framework has the wisest rules and guidelines. For decades, the jurisdiction has overseen large-scale international financial services, consisting primarily of investment firms and wealth management banks with intermediaries. However, the regulation of the financial services industry in the Bahamas requires a great deal of expertise and intimate knowledge of the requirements. Mundo's expert team in the Bahamas has worked for several years with the local authorities and can solve most Bahamian licensing needs.

Some general benefits of this jurisdiction when it comes to financial licenses are that:

-The Bahamas has a regulatory environment that fosters investment opportunities while maintaining the highest international standards and implementing public-private partnerships.

-Customer protection is essential to The Bahamas. Therefore, a physical presence is required, including senior management and compliance officers. 

-Due to the focus to become one of the top business environments in the Caribbean region, the Bahamas offers great benefits when it comes to bank and financial licences. 

-The Bahamas is committed to serving the financial services industry as a sovereign nation with tight regulatory oversight and responsiveness to the needs of the global market. 

-Located at the crossroads of the Americas, the Bahamas is easily accessible by many daily direct flights from the US and Europe. 

Legal Framework

The regulatory body responsible for approving and supervising financial services activities in the Bahamas is the Bahamas Securities and Exchange Commission, also known as SCB. This regulatory authority was established to provide a legal framework for all financial firms, including research and regulatory activities for monetary regulation (including foreign exchange), administrative jurisdiction, and legal certainty. 

The applicant law requires that all market participants operating in or from the Bahamas and products offered to the public should be licensed by or registered with the Securities Commission. 

Likewise, the Bahamas Banking Services are regulated by the Central Bank of the Bahamas under the Banking and Trustees Regulation Act of 1965. Bank licenses may be restricted or unlimited (public). Limited licenses can only provide banking services to a specified list of customers that cannot be modified without approval. Restricted licenses are tailored to your company's financial operations. 

Banking Licenses

The central bank prioritizes the application of unlimited bank licenses from reputable financial institutions. If not, the central bank requires that ownership be split evenly among five or more independent shareholders, first scrutinizing funds and shares very carefully. 

The application process requires:

-Detailed information and includes an interview with the central bank, 

-A five-year business plan including proforma financial statements, 

-A description of the operational management structure. 

-Once approved, the complete financial statements must be submitted annually. 

The minimum initial capital required for a public bank is US$ 2 million, which must keep pace with business growth, at least 5% of assets or 8% of at-risk assets. You cannot lend or invest in assets or groups exceeding 15% of your total assets. The minimum paid-up capital of a limited liability bank is US$ 100,000. 

You should know that in the Bahamas, foreign banks may operate as branches or through subsidiaries. The authorization process is the same in both cases. The branch should be a company within the meaning of the Companies Act, not an internationally operating company (not authorized to provide banking services). The activities of an offshore bank in the Bahamas are managed by a local professional company, thus bypassing the requirement of a local business license (a banking license is always required). 

What Does it Mean to Have a Banking License in the Bahamas?

The banking license specifies the foreign exchange control status of the bank concerned. The residence permit means the bank is free to operate in Bahamian dollars, but you have to pay a premium to buy other currencies. 

A non-resident license means the bank is free to operate in foreign currency, but requires approval for Bahamian dollar transactions. Businesses that must keep their local bank details and former foreign businesses must comply with these regulations for three years. 

The Financial Transaction Reporting Act, 2018 requires all financial institutions regulated by the Bahamian Compliance Commission to register. If your financial institution is not registered, fines and other penalties may apply. But you do not have to worry about this since our local partners and our team of experts are more than willing to help you.

Business Licenses in the Bahamas

Besides banking licences, Bahamas offers business licences. This is a grant or approval to conduct a business activity (whether a sales or service business) within The Bahamas. According to the national law, “business” may be defined as “a profession, calling, vocation, occupation, trade, manufacture or undertaking of any kind, an adventure or concern in the nature of trade with the view of generating a turnover or making money”.

Any person who owns or operates a business in the Bahamas is required to apply for and obtain a business licence in compliance with the Business Licence Act 2010.

Applications are completed online at vat.revenue.gov.bs. All persons conducting business within the Bahamas must be granted a licence following the requirements of the “Act”.

Supporting documents and approval from other agencies are required to complete the online application. If all required information and documents are submitted correctly, the approval process usually takes place within 7 business days. This can be ensured with the proper guidance and information, and we are more than willing to provide it to you. 

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Types of Business Licences 

In case you were wondering, please know that there are three types of business licences in the Bahamas: 

A) Annual business license. These are licenses that are renewed annually and may include activities such as retail/wholesale, specialists, hairdressers/cosmetologists, and banking. Granted to applicants who regularly engage in commercial activities.

 B) Temporary business licence. These are permits issued to foreigners/companies for specific contractual work for a specific period not exceeding 3 years (eg contributors to special projects).

 C) Occasional Business Licences. These are licences issued to applicants to do business for events and other short-term purposes. They can be issued for a period of up to 7 days and can be applied up to four times per year. An Occasional Business Licence is required for the following activities: 

-Work as a traveling salesperson (non-resident natural person). 

-Hold a commercial event at any venue for dance, singing, music, or other public entertainment.

-Holding trade fairs and exhibitions. 

Note: Nonprofits/units are also considered enterprises. All business licenses expire on December 31 of each year, except temporary and non-permanent business licenses.

Requirements

The requirements for the new business license in the Bahamas are as follows: 

-Proof of Bahamian citizenship (a copy of a valid passport) or permanent residence with the right to work in the country (permit from the Department of Immigration) 

-Approval of the Bahamas Investment Authority for Foreigners / Company 

-Copy of certificate of incorporation [attached copy of shareholder(s) passport(s)] and receipt of payment of the annual company registration fee (if applicable) 

-Registration number within the National Insurance Board (NIB) and Good Status Letter (Corporate); Personal NIB Cards for Individual Applicants and Partners 

-Lease or rental agreement for the business location or proof of ownership (copy of conveyance) along with approvals from:

a) Physical Planning Department (Plan) 

b) Royal Bahamas Police / Licensing Department (if alcoholic beverages are sold and/or for music and dance)

c) Department of Environmental Health (Health) Services 

d) Building / Building Management Department (Inspector) 

If you want to get to know more details about this type of financial licence in the Bahamas, you can review the official website of the Ministry of Finance of the Bahamas. 

What Can We Do for You?

Finding new opportunities for doing business abroad is something that only a few can make in the best way possible, but there are jurisdictions like the Bahamas that offer a great legal framework and different financial licences with specified benefits. These licences act as an instrument for taking the next step in your business ideas. We understand that it is not an easy task at first, considering that it might be overwhelming, but we can guarantee you success and guidance throughout the process. 

Please contact us for a consultation and get any financial license you want for you and your business in the Bahamas as soon as possible.

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