Bahamas Private Trust Company (PTC)
A PTC is a company formed for the express purpose of acting as trustee of a specific trust, or group of trusts. As such, an individual can retain control over the administration of his/her own trusts by establishing a PTC to act as trustee for these trusts. Where the individual is so minded, the PTC can also act as trustee for trusts settled by family members.
A PTC does not provide banking or investment services and cannot provide trustee services to the public. As such, a PTC is exempt from licensing requirements, but a regulated Bahamian service provider must provide certain functions such as anti-money laundering and due diligence reviews.
Bahamas Executive Entity (BEE)
The Bahamas Executive Entity is designed to act as a ‘power holder’ and to encapsulate powers currently existing in wealth management and estate planning structures within a new form of legal entity. It was designed as a best practice solution for a single-family office looking for an entity to own the shares of a private trust company (PTC), act in a supervisory or advisory capacity and carry out administrative functions in relation to a series of structures.
A BEE has similarities in its standalone nature to a foundation and to a purpose trust, but is equipped with an array of different functions, objectives and capabilities. Typically, it will act as the protector of a trust or foundation, the settlor of a trust, the ultimate shareholder in a family holding structure or shareholder of a PTC, among other functions.
Bahamas Foundation
With the Foundations Act 2004, the Bahamas became the first leading common law jurisdiction to introduce foundations’ legislation. A Bahamas Foundation is the Bahamas common law equivalent of the civil law foundation. Foundations must be registered and are require to have an independent Foundation Council comprising at least three members.
Foundations have several features that make them an effective option as an estate and inheritance planning tool, including:
- A foundation, unlike a trust, is a distinct legal entity that can sue and be sued in its own name.
- The founder may reserve powers as provided by the charter.
- There is broad recognition for foundations by civil law countries.
- Assets placed within a foundation are owned solely by the foundation.
- There is no perpetuity period, which provides for continual, unending succession if that is desired by the founder.
- A change in a foundation’s governing body does not change the legal ownership of the foundation’s assets.
Bahamas Immigration and Residency
The Bahamas is an attractive location for high-net-worth individuals seeking an alternative tax residence or domicile because it has zero personal and corporate taxes and has ready access to North and South America, as well as direct flights to the UK.
The Bahamas government has a flexible process for granting Economic Permanent Residency (EPR) and maintains a flexible immigration policy, designed to make it easy to both live and work in the Bahamas.
To qualify for EPR, and applicant is required to:
- Not have a criminal record.
- Purchase property valued at more than BHD750,000, or own or have a beneficial interest in a business in the Bahamas that is in a growth category and supports the employment of Bahamians.
- Demonstrate sufficient resources in cash, investments or salary, to be self-supporting without the need to be employed in the Bahamas.
- Demonstrate that property tax payments are current.
EPR holders and their spouses and children (with the appropriate government permit) have the same rights as Bahamians, except for the right to vote. They may pass freely through immigration and have the right to stay any length of time.
Permanent residents may bring their own personal assistants or household staff, subject to government clearance and the issuance of work permits.
There is another category known as Annual Residence, which may be renewed annually, or an individual may apply for a Homeowners Resident Card, which offers no privileges other than to move freely through immigration at any port of entry.
A Work Permit must be obtained for a foreigner to work in the Bahamas, which is only valid for that specific person and position. The cost of a Work Permit varies from BHD500 to BHD12,500 depending on the seniority of the applicant. Work Permits are generally granted for one year but may be granted for periods up to three years for senior personnel.
It is possible to obtain Permanent Residency with the right to work. This arrangement is generally suited to an individual with a family office or who wants to manage investments or a business that does not interact with the Bahamian economy. It may also be of particular interest to those who desire to establish a second home in the Bahamas.
Sovereign can handle the application process in full, together with ancillary services, as well as introductions to professional service providers, such as legal, real estate and relocation firms.
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Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
