Travelers Holdings Ltd.


Following is a summary of some of the benefits afforded to companies incorporated under the provisions of The International Business Companies Act of 1990 ("The Act"). The Act was established with a view enabling The Bahamas to more effectively compete with other tax haven jurisdictions having similar laws.

The International Business Corporation ("IBC"), being tailored for the offshore market, is prohibited from engaging in certain activities. These activities include; doing domestic business with, or having as shareholders, residents of The Bahamas; owning real property in The Bahamas; carrying on banking, trust, or insurance business; and the provision of registered office facilities. In such cases, an ordinary corporation under the Companies Act of 1992 ("a Domestic Corporation"), would be appropriate. In addition, an IBC must have a Registered Office, and Registered Agent, in The Bahamas. The new Resident Agent Law requires a resident agent to be either a Law Firm, Accounting Firm, or Bank. It is very important to know who your resident agent is, so as to protect your anonymity. Travelers Holdings Ltd. is an approved registered agent and will protect your privacy.

"Once an IBC is created, and the individual is removed from the actual assets, that person is no longer subject to paying tax on that money." (Bahamas handbook, 1993). Further, all Corporate shareholders are provided complete anonymity under Bahamian law. These laws strictly prohibit the release of shareholders' identities unless under Bahamas court order, which has not happened to date.


Incorporation is immediate upon lodging the requisite Memorandum of Association with the Registrar of Companies. The Certificate of Incorporation is usually issued within 24 hours of filing. Furthermore, proposed corporation names may be approved and reserved in advance over the telephone through this office.


Any of the words; Limited, Incorporated, Corporation, Societe Anonyme or Socuedad Ananima, or their respective abbreviations, can be used to denote the compulsory indication of limited liability.


Although a minimum of two subscribers to the memorandum are required upon the initial incorporation, once incorporated, an IBC may operate with a single shareholder. Also, there need only be one director/officer of the Corporation who may be a citizen of any country. All of the foregoing capacities may be filled by a corporate entity, rather than an individual, if desired.


The act allows an IBC to engage in any lawful activity thereby avoiding the use of lengthy objects clauses as a means of circumventing the now obsolete doctrine of "ultra vires". However, restrictions upon the objects of an IBC may be included in the Memorandum if desired.


There are no financial or other returns required in respect to an IBC, nor is it necessary for an Annual General Meeting of shareholders to be held. Director's meetings may be held anywhere in the world, and may be conducted by telephone.


No public record is maintained to identify the shareholders or Directors, and the Share Register may be kept in electronic form.


An IBC may issue registered, or bearer shares and holders of either can convert such shares into the other type. Shares can be issued with or without par values and in fractions. Certificates need not be issued in respect of registered shares. Capital can be expressed in any currency, and, subject to certain restrictions, reduction of capital can be achieved by the simple expedient of a Director's resolution without court sanction. The purpose and ownership by an IBC of its own shares is also permitted but only out of surplus, or in exchange, for newly issued shares.


Annual operating expenses are considered lower than that for Domestic Companies. IBC's are not required to file annual corporate reports or tax returns.


There is a guaranteed 20 year exemption from any corporate tax, from any taxes on income or distributions, and from the provisions of the Stamp Act in relation to such matters as transfers of the corporation's property, transactions in respect of its shares, debt obligations or other securities, or other transactions relating to its business. The Act also seeks to render some protection from the long arm tactics of foreign revenue laws. Application may be made to the Bahamas Courts for an order that an IBC:

(a) disregard the action of a foreign government which expropriates, or imposes confiscatory taxes on the shares or other interests of an IBC; and

(b) treat as members, or interested holders, person(s) whose shares or interest are subject to the action by the foreign government. Furthermore, corporate domicile can be changed to another jurisdiction.


The IBC is similarly exempt from Exchange Control Regulations and no reference needs to be made to Bahamas Exchange Control, either in connection with the formation or holding of shares. The IBC is also free to open and operate foreign currency bank accounts without recourse to the Central Bank of The Bahamas.


Both Domestic and foreign companies may be continued as IBCs in the latter case without the need for reciprocal arrangements with the jurisdiction of original incorporation.


Merger and consolidation may be achieved between two IBCs (including a parent with a subsidiary), or between an IBC and a Domestic Corporation or Foreign Corporation, provided, in the latter two cases, the surviving entity meets the requirements of an IBC.


Foreign entities investing within the United States are exempt from paying capital gains taxes. The IBC provides an efficient and inexpensive conduit for investing in the U.S. and abroad. In addition, the IBC may be utilized in conjunction with a trust, as the ownership vehicle for the assets of the trust, with the IBC shares vested in the trustees.

Travelers Group
Service, Pricing, & Ordering
REVISED September 27, 2000