Offs ho re - Beatow Partners · THE BAHAMAS BERMUDA CAYMAN ISLANDS TURKS & CAICOS ISLANDS PANAMA Offs ho re Financial Services Guide. Content ... fcp y’ A l Association.

THE BAHAMAS BERMUDA CAYMAN ISLANDS TURKS & CAICOS ISLANDS PANAMA

OffshoreFinancial Services

Guide

Content

� About Meritas

Offshore Financial Services� Part I - Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1� Part II - Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5� Part III - Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8� Part IV - Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11� Part V - Place of Business of Foreign Company . . . . . . . . . . . . . . . . . . . . . . . . . 14� Part VI - Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16� Part VII - Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17� Part VIII - Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20� Part IX- General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22� Part X - Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25� Appendix A - Company name restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29� Appendix B - Fund registration requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 30� Appendix C - Requirements for local service providers . . . . . . . . . . . . . . . . . . . 32

� Contact us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Offshore Financial Services Guide

The following currency notations are used in this publication:

BSD Bahamian Dollar

BMD Bermudian Dollar

KYD Cayman Islands Dollar

USD United States Dollar

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The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

PART 1 - SHARES

References to Domestic Companies aremade pursuant to the Companies Act,1992 (CA) and references made to Inter-national Business Companies (IBC) aremade pursuant to the InternationalBusiness Company Act, 2000 (IBCA)

References are to the Companies Law(2009 Revision)

Portions of the Companies Ordinance inthe Turks & Caicos Islands are not appli-cable to exempted companies. An ex-empted company is one whose objectsare to be carried out mainly outsideof the Turks & Caicos Islands. Theseresponses relate to exempted companiesunless stated to the contrary.

Do details of theshareholders have tobe disclosed?

Domestic – Yes, a statement con-firming the name, address and occu-pation of the shareholders and thenumber of shares held by eachshareholder must be filed with theRegistrar General’s Department an-nually, but nominee shareholdersmay be used (CA s. 58(1)(2)).

IBC – No, details in relation to theshareholders are filed not in theRegistrar General’s Department.

Yes, the Register of Members of aBermuda company is available forpublic inspection in accordancewith the Companies Act 1981 (the“CA”).

Ordinary Companies, yes: nameand address (Sections 40 and 41)but nominee shareholders may beused.

Exempted Companies, no.

No No. The Share Registry is a privatedocument.

Can bearer shares beissued?

No, however, shares can be held intrust for the beneficial owner.

No Yes, but only if authorised by thecompany’s Articles of Association(Articles) (Section 32) and only to arecognised custodian (Section 229).

Yes, but the law with respect tobearer shares is now so restrictiveas to make the use of bearer sharesalmost extinct.

Yes

Can shares be ofno par value?

Domestic – Yes, shares may have anominal or par value or may be ofno par value. (CA s. 35(3)).

IBC – Yes.

No Yes, but an exempted companymay not divide its shares into bothfixed value and no par value(Section 8(1)).

Yes Yes

What is theminimum numberof shareholders?

Domestic – Two

IBC – One

One One One One

1


SHARES The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Can shares beredeemed?

If so, whatrestrictions apply?

Domestic – Yes, provided the com-pany is able to pay its liabilities asthey become due, or the realisablevalue of the company's assetswould, after that payment, be morethan the aggregate of its liabilitiesand issued share capital of allclasses (CA s.44).

IBC – Yes, provided the companygives written notice to each memberwhose shares are to be redeemedstating the redemption price and themanner in which the redemption isto be effected (IBCA s. 81).

Yes, shares can be redeemed inaccordance with the CA.

The CA provides that:• The purchase be authorised bythe board or in accordance withthe company’s by-laws.

• No purchase can be effected if,on the date of purchase, thereare reasonable grounds for be-lieving the company is, or afterthe purchase would be, unableto pay its liabilities as theybecome due.

• The shares purchased aretreated as cancelled and theamount of the company’s issuedcapital is diminished by thenominal value of the shares, butthe cancellation will not betaken as reducing the amount ofthe company’s authorised sharecapital.

A company may issue redeemablepreference shares if authorised byits Articles provided that:• Only fully paid shares may beredeemed;

• Any premium on redemption ispaid out profits; or

• Shares are redeemed out of theproceeds of a fresh issue ofshares (Section 37) save that ifauthorised by its Articles a com-pany may redeem shares otherthan out of profits or the pro-ceeds of a fresh issue of shares ifafter such redemption the com-pany will be able to pay its debtsas they fall due in the ordinarycourse of business (Section37(5)).

Share capital can be reduced byspecial resolution subject toconfirmation by the Court(Sections 14-17).

Shares can be redeemable subjectto the Company’s Articles ofAssociation.

Very briefly restrictions are asfollows:• Share must be fully paid.• Shares may not be redeemed if aconsequence of the redemptionwould be that there would nolonger be any other member ofthe company holding shares.

• The premium (if any) payable onredemption must have been pro-vided out of profits of companyor out of share premium account.

Shares can be redeemed with theconsent of the shareholder, unlessotherwise expressed in the Articlesof Association. The redemptionshould be with surplus or netprofits.

2



Can shares be boughtonto Treasury?

If so, whatrestrictions apply?

Yes, provided the Memorandum andArticles of Association provide forthe same and the directors deter-mine that immediately after the pur-chase, redemption or otheracquisition:• The company will be able to sat-isfy its liabilities as they becomedue in the ordinary course of itsbusiness.

• The realizable value of the assetsof the company will not be lessthan the sum of its total liabili-ties, other than deferred taxes, asshown in the books of account.

• In the absence of fraud, thedecision of the directors as to therealizable value of the assets ofthe company is conclusive unlessa question of law is involved(IBCA s.32(1)(2)).

Yes.

The CA provides that:• A company may not acquire itsown shares to be held as treas-ury shares if, as a result of theacquisition, all of the company’sissued shares, other than theshares to be held as treasuryshares, would be non-votingshares.

• The acquisition must be autho-rised by the company’s board ofdirectors or in accordance withits by-laws.

• No acquisition may be effected if,on the date on which the acqui-sition is to be effected, there arereasonable grounds for believingthat the company is, or after theacquisition would be, unable topay its liabilities as they becomedue.

Yes, if terms are authorised by thecompany’s Articles (Section 37(2)).If the Articles do not authorise themanner of purchase, a companyshall not purchase any of itsshares unless the manner of pur-chase has first been authorised bya resolution of the company(Section 37(3)(d)).

Shares redeemed or repurchasedform part of the authorised butunissued share capital of thecompany.

Yes. In such case, it should be withsurplus or net profits, otherwiseshares must be cancelled through areduction of issued capital. Sharesheld by the company cannot be rep-resented or voted at shareholdersmeetings.

What is theminimum paid-upcapital?

Domestic – Minimum number ofshares to be issued is two.

IBC – Minimum number of sharesto be issued is one.

However, a company licensed underthe Banks & Trust Companies Regu-lation Act, Insurance Act, ExternalInsurance Act, Investment Funds Actand Securities Industries Act willhave to maintain minimum capitalrequirements appropriate to thebusiness it wants to conduct.

There is no minimum save thatmutual fund companies must havea minimum paid-up capital of $1and insurance companies haveminimum capital requirementsunder the Insurance Act, 1978(the “IA”).

Minimum number of shares to beissued is one (Section 7(2)).

Companies have no minimum capitalrequirement, however a companywhich is required to be licensedunder the Banking Ordinance 1979,the Insurance Ordinance 1989, orthe Trustee Licensing Ordinance1992 will have to be capitalisedappropriate to the business it wantsto conduct.

There is no minimum paid-upcapital; but shareholders arepersonally liable before creditors ofthe company for any amounts owedto the company for issued shares.

3



Can there bepre-emption rights?

Yes, if the company’s Articles ofAssociation or by-laws permit thesame (CA s. 36(3)).

Yes Yes, if provided in the Articles. Yes Yes

Do your shares haveto be held by localresidents?

No. However, if shares in a domesticcompany are held by a foreignperson, the issuance of those sharesrequires government approvals.

Bermuda law distinguishes between“local companies,” being thosecompanies which are ownedpredominantly (or entirely) byBermudians and “exemptedcompanies,” which are companiesowned predominantly (or entirely)by non-Bermudians.

No No No

Where must the shareregister be kept?

Domestic – At the company’sRegistered Office (CA s. 56(1)).

IBC – At the company’s RegisteredOffice (IBCA s. 29(1)).

At the registered office of the com-pany or, after giving written noticeto the Registrar of Companies, suchother place in Bermuda convenientfor inspection of members of thecompany and other persons entitledto inspect it. A company may alsohave a branch register outsideBermuda.

For ordinary companies, at theRegistered Office of the Company(Section 44).

Exempt companies may maintaintheir Register of Members any-where in the world.

Exempt companies may maintainthis at a location other than itsregistered office upon certainconditions, including an obligationto maintain a certified copy of theregister at its registered officeaddress.

Where the board of directors sodetermines.

4


PART IIDIRECTORS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Can directors beindemnified?

A domestic company may indemnifyits directors against all costs,charges and expenses (including anamount paid to settle an action orsatisfy a judgment) reasonably in-curred by him in respect of any civil,criminal or administrative action orproceeding to which he is made aparty by reason of being, or havingbeen, a director of that company orbody corporate (CA s. 113).

An IBC company may indemnify itsdirectors against all expenses, in-cluding legal fees, and against alljudgments, fines and amounts paidin settlement and reasonably in-curred in connection with legal oradministrative proceedings (IBCA s.58).

Yes Yes, as long as the directors’actions are in good faith and inthe best interests of the company(absent fraud).

Yes Yes

Is it necessary to have alocal director?

No, there are no restrictions in theCA or IBCA on the residence of thedirectors of a domestic company orIBC. However, a domestic companyand an IBC are required to maintaina Registered Office in The Bahamasat all times.

No. An exempted company mustsimply have a local representative,which can be a Bermuda residentdirector, secretary or residentrepresentative.

No, but exempted companies mustmaintain a local registered office inthe Cayman Islands (Section 50).

No, but exempt companies musthave a local ResidentRepresentative.

No

Can corporate directorsbe appointed?

Yes, there are no restrictions in theCA or IBCA.

Yes Yes Yes Yes

5


DIRECTORS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Can alternates beappointed?

Yes, a director of an IBC may by awritten instrument appoint an alter-nate who need not be a director.The alternate is entitled to attendmeetings in the absence of thedirector who appointed him and tovote or consent in the place of thedirector (IBCA s. 52(2)).

Yes Provision can be made in theArticles.

Yes, subject to the company’sArticles of Association.

Yes

What returns arenecessary ofalternates?

Notice of the name of the alternatemust be filed with the RegistrarGeneral’s Department (IBCA s.52(1)).

None None None

Who pays alternate’sremuneration?

Board of Directors determine howremuneration should be attributed.

The company. This is not addressed in the statute.Provision can be made in theArticles.

No provision for this. Board of Directors to determine ifand how to compensate.

Do directors have toshare a qualification?

There is no statutory requirement,however, the Memorandum andArticles of Association can providefor the same.

No There is no statutory requirementbut the Articles can provide for one.

No No

6


DIRECTORS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Is there a minimumnumber of directors?

Domestic – Private companies: two.Public companies: three.(CA s. 80(1)).

IBC – The number of directors isfixed by the company’s Articles ofAssociation (IBCA s. 43).

Two One One. Company must also have aSecretary.

Three

Are directorsrequired todisclose interestsin contracts?

A contract will be void or voidable ifa conflict of interest arises and theinterest of the director was notdisclosed to the IBC (IBCA s. 57(1)).

Yes, the CA states that any officer ofthe company will be deemed not tobe acting honestly and in good faithif he fails to disclose at the firstopportunity at a meeting of thedirectors or by writing to thedirectors:• His interest in any material con-tract or proposed material con-tract with the company or any ofits subsidiaries.

• His material interest in any per-son that is a party to a materialcontract with the company orany of its subsidiaries.

Not in terms of the statute butcommon law considerations applyand the Articles may provide forthis.

No statutory requirement but gen-erally Articles provide that directorsare required to disclose their inter-est prior to any vote being taken.

No

What details ofdirectors have to bedisclosed?

The material facts of the interest ofeach director in the contract and hisinterest in or relationship to anyother party to the contract must bedisclosed (IBCA s. 57(2)).

Each director’s first name, surnameand address are to be kept in theRegister of Directors held at theregistered office of the company.

Name and address. No statutory requirement butgenerally Articles provide that ageneral notice that a director is ashareholder of a firm or companyis regarded as interest and mustbe disclosed. This information issufficient disclosure.

Name and address.

7


PART III - TRADE The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Can you form:Banks?

InsuranceCompanies?

ReinsuranceCompanies?

Trust Companies?

Yes, provided prior approval isgranted by The Central Bank of TheBahamas for the incorporation andlicensing of a domestic companypursuant to the provisions of theBank and Trust CompaniesRegulations Act.

Yes, provided prior approval isgranted by the Registrar of Insur-ance for the incorporation andlicensing of a domestic companypursuant to the provisions of theInsurance Act.

Yes, provided prior approval isgranted by the Registrar of Insur-ance for the incorporation andlicensing of a domestic companypursuant to the provisions of theInsurance Act.

Yes, provided prior approval isgranted by The Central Bank of TheBahamas for the incorporation andlicensing of a domestic companypursuant to the provisions of theBank and Trust CompaniesRegulations Act.

This would be highly unusual.There are currently only fivelicensed banks and depositcompanies in Bermuda.

Yes

Yes

Yes

Yes, subject to the provisions of theBanks & Trust Companies Law(as revised).

Yes, subject to the provisions of theInsurance Law (as revised).

Yes, subject to the provisions of theInsurance Law (as revised).

Yes, subject to the provisions of theBanks & Trust Companies Law(as revised).

Yes

Yes

Yes

Yes

Yes, with the prior approval of theSuperintendence of Banks.

Yes, with the prior approval of theSuperintendence of Insurance andReinsurance.

Yes, with the prior approval of theSuperintendence of Insurance andReinsurance.

Yes, with the prior approval of theSuperintendence of Banks.

8


TRADE The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

For the company typesabove that can beestablished, whatadditional governmentfees must be paid?

The legislation as noted aboveapplicable to the formation ofcompanies outlines the licensingfees for banks and insurancecompanies.

Insurance and reinsurance compa-nies are subject to license feesunder the IA.

Trust companies may be subject tolicense fees under the Regulation ofTrust Business Act 2001 (the “TrustsAct”).

The regulations are contained in thelegislation stated above.

Any requisite license fees will haveto be paid to the Government.

General: Annual Franchise Fee ofUSD300. A company operating inPanama that requires a licensemust pay 2% of its capital with aminimum of USD100 and amaximum of USD60,000.

Banks: Must pay the following:A) Annual Regulation and Supervi-sion Fee (varies depending onlicense).General License: USD30,000 plusUSD35 for each million in totalassets with a maximum ofUSD100,000.International License: USD15,000.Representative License: USD5,000.

B) Annual tax (varies on type oflicense).General License: from USD50,000up to USD350,000 depending ontotal assets.International License: USD50,000.Trust Companies: USD1,000 feewith application.Insurance: USD2,000 fee withapplication and an annual fee ofUSD2,500.Reinsurance: USD1,000 fee withapplication and an annual fee ofUSD1,000.

9


TRADE The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What additionalregulations needto be complied with?

The legislation as noted aboveapplicable to the formation ofcompanies, together with thecompendium of Compliance andAnti-Money Laundering legislation.

Insurance and reinsurance compa-nies will be subject to regulationunder the IA.

Trust companies will be subject toregulation under the Trusts Act.

The regulations are contained in thelegislation stated above.

Banks: Decree Law 9 of 1998 asamended by Decree Law 2 of 2008;Agreement No. 3 of 2001 andAgreement No. 2 of 2006.

Trust Companies: Law 1 of 1984;Executive Decree 16 of 1984.

Insurance: Law 59 of 1996.

Reinsurance: Law 63 of 1996.

Captive Insurance: Law 60 of 1996.

Can transactions beultra vires if outsidecompany’s objects?

The doctrine of ultra vires has noapplication to an IBC.

Yes. However, it should be notedthat a Bermuda company may nowbe incorporated with unrestrictedobjects or amend its memorandumof association to provide for unre-stricted objects.

No (Section 28). Yes, but it is possible to draft “anunrestricted” objects clause.

No

10


PART IVMEETINGS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Where can directors’meetings be held?

Domestic – Directors’ meetingsmay be held within or outside TheBahamas (CA s. 92(1)).

IBC – Directors’ meetings may beheld within or outside The Bahamas(IBCA s. 48(1)).

Anywhere. There is no requirementto hold board meetings inBermuda.

Anywhere in the world unlessotherwise mandated in thecompany’s Articles.

Anywhere subject to the provisionsof the company’s Articles ofAssociation.

Anywhere the directors deemconvenient.

Where can AnnualGeneral Meetingsbe held?

Domestic – Annual General Meet-ings may be held within or outsideThe Bahamas (CA s. 68 & 69).

IBC – Annual General Meetingsmay be held within or outside TheBahamas (IBCA s. 60(1)).

Anywhere. There is no requirementto hold AGMs in Bermuda.

Anywhere in the world unlessotherwise mandated in thecompany’s Articles.

No restrictions. Anywhere the directors deem con-venient depending on the Articlesof Incorporation; but if the Articlesdo not specify, then the meetingmust be held in the Republic ofPanama.

Are there time limitsfor Annual GeneralMeetings?

Domestic – Once a year.

IBC – No requirement to hold anAnnual General Meeting.

An AGM of a company must beheld at least once in every calendaryear.

An ordinary company must hold ageneral meeting at least once inevery year (Section 58). There is norequirement for an exempted com-pany to hold an Annual GeneralMeeting.

No No

11


MEETINGS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What constitutes aquorum for:

Annual GeneralMeetings?

Directors’Meetings?

Domestic – A majority of theshareholders entitled to vote at themeeting are present in person orrepresented by proxy (CA s. 70(1)).

IBC – More than one half of theshares of each class or series if noquorum is established in the com-pany’s Memorandum or Articles ofAssociation (IBCA s. 62).

Domestic – A majority of the num-ber of directors or minimum numberof directors required by the articlesshall constitute a quorum at anymeeting of directors (CA s. 92(2)).

IBC – This is set by the company’sArticles of Association (IBCA s. 50).

This will be determined by the by-laws of the company.

Two directors.

As provided in the company’sArticles.

As provided in the company’sArticles.

No provisions in legislation.

No provisions in legislation.

Simple majority (half plus one)of all issued shares, unless thecompany’s Articles provideotherwise.

Where must minutesbe kept for:

Shareholders’Meetings?

Directors’Meetings?

Domestic – Registered office of thecompany (CA. s. 18(1)(b)).

IBC – This is fixed by the company’sconstitutive documents.

This is fixed by the company’sconstitutive documents.

The registered office.

The registered office.

The location at which minutes areto be kept is not specified by law.

The location at which minutes areto be kept is not specified by law.

At its registered office.

At its registered office.

Where the directors deem conven-ient. Regulated entities (banks, in-surance companies, trustcompanies, etc.) must keep them inthe Republic of Panama.

Where directors deem convenient.Regulated entities must keep themin the Republic of Panama.

12


Simple majority (half plus one)of all issued shares, unless thecompany’s Articles provideotherwise.

13

MEETINGS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What are therequirementsregarding meetingnotices?

Domestic – Notice of a directorsmeeting is set by the directors (CA s.92(1)).

IBC – Directors are required to havea minimum of two days notice of ameeting of the Board of Directors(IBCA s. 49(1). Shareholders arerequired a minimum of seven daysnotice (IBCA s. 60(1)).

Notice of all general meetings shallspecify the place, day, hour and, incase of special general meetings,the general nature of the businessto be considered.

The CA requires that at least fivedays’ notice of any meeting shall begiven. The by-laws may provide forlonger periods.

In the absence of provision in theArticles, five days’ notice must begiven to each member.

No statutory requirement but gen-erally Articles provide that noticesmust be in writing and must begiven by the company to any mem-ber either personally or by sendingit by post, cable, or telex to him/heror their address, as shown on theRegister of Members.

Notice in writing given not lessthan 10 days or more than 60 daysprior to the date of the meeting,unless otherwise provided in thecompany’s Articles. Notice mustinclude the date, time and placewhere meeting will be held and theagenda. If shares have been issuedto the bearer, notice must bepublished in a newspaper.

May resolutions be inwriting?

Yes Yes, provided that the by-laws of thecompany do not state otherwise.

If authorised by the company’sArticles (Section 60(1)(b)).

Yes Yes


PART V - PLACE OFBUSINESS OFFOREIGN COMPANY The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Does a foreigncompany havingactivities in theterritory have toregister?

If so, what has to beregistered?

Yes, it has to register a certified andauthenticated copy of its constitutivedocuments together with a state-ment outlining the followingparticulars (CA s. 173):• The name of the company• The place of incorporation• The date of incorporation• The governing by-laws of thecompany

• The duration of the company• The liability of the shareholders• The proposed undertaking of thecompany in the Commonwealthof The Bahamas

• When the company proposes tocommence its undertaking in TheBahamas

• The stated capital of the company• The principal address of thecompany outside The Bahamas

• The principal address of thecompany in The Bahamas

• The name, address and occupa-tion of the company’s directors

An overseas company may notengage in or carry on any trade orbusiness in Bermuda without a per-mit. These companies are typicallyreferred to as “permit companies.”

A copy, certified and authenticatedunder public seal of the country,city or place under the laws ofwhich the foreign company hasbeen incorporated, of its charter,statutes or memorandum and arti-cles of association, or other instru-ment constituting or defining itsconstitution of the foreign com-pany, and, if the instrument is notwritten in English, a certified trans-lation thereof.

A list of its directors, containingsuch particulars with respect to thedirectors as are required to be con-tained with respect to directors inthe register of the directors of acompany in terms of the statute.

The names and addresses of someone or more than one person resi-dent in the Islands authorised toaccept on its behalf service ofprocess and any notices required tobe served on it.

Each foreign company has a monthafter becoming a foreign companyto register.

The following is required:• Certified copy – incorporationdocument, Memorandum &Articles of Association, andtranslation of document if thedocuments are not in English.

• A list of all directors.• Names and addresses of someone or more than one personwho is resident in TCI authorisedto accept on its behalf service ofprocess.

• Fee to the Registrar upon regis-tration and annually.

Yes. The following must beregistered:• Articles of Incorporation.• Balance sheet.• Resolution authorisingregistration in Panama as aforeign company, indication ofthe assign capital for localoperations and the list ofdirectors and officers.

• Certificate of Good Standing.

Does a foreigncompany require aRegistered Office?

Yes, it must maintain a RegisteredOffice in The Bahamas and thataddress must be registered withthe Registrar General’s Department(CA s. 181).

No The provisions of the statute relat-ing to the registration of foreigncompanies are not explicit on thispoint, but it is the expectation ofthe Registrar of Companies that aRegistered Office will be appointed.

No, but it must provide names andaddresses of person(s) resident inTCI authorised to accept service onits behalf.

No

14


PLACE OF BUSINESSOF FOREIGNCOMPANY The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Does a foreigncompany requirelocal agents?

No, a foreign company registeredunder the Companies Act, 1992,does not require a local agent. How-ever, an IBC does require a localregistered agent (IBCA s. 38(1)).

No No, other than a person to acceptservice of process and any noticesrequired to be served on it.

No, but it must provide names andaddresses of person(s) resident inTCI authorised to accept service onits behalf.

Yes

Does a local agenthave to be qualifiedor licensed?

Local agents must be a registeredFinancial and Corporate ServiceProvider, a bank or a trust companyin good standing (IBCA s. 38(2)).

N/A No, but in practice a RegisteredOffice will be nominated and theprovider of such service must belicensed under the CompaniesManagement Law or the Banks& Trust Companies law.

Yes, if acting as a company manageror agent.

Yes

Can a company bere-domiciled:

Outside of theterritory?

Into the territory?

An IBC, yes, provided the companysubmits a legal opinion by a personduly qualified in that jurisdiction tothe Registrar General confirming:• The laws of the jurisdiction out-side The Bahamas permit thecontinuation.

• The company has complied withthose laws. (IBCA s. 88).

An IBC, yes, provided the companysubmits to the Registrar General:• Articles of continuation, accom-panied by a copy of the Memo-randum and Articles of theCompany and evidence that thecompany is in good standing.

• A written authorisation designat-ing one or more persons whomay give notice to the RegistrarGeneral that the articles ofcontinuation should becomeeffective (IBCA s. 85).

Yes

Yes

An exempted company incorpo-rated with limited liability and ashare capital may make such anapplication (Section 206).

A body corporate incorporated,registered or existing with limitedliability and a share capital underthe laws of any jurisdiction outsidethe Islands may make such an ap-plication (Section 201).

The company can be re-domiciledoutside the territory with consent ofthe Registrar.

The company can be re-domiciledinto the territory upon application tothe Registrar.

Yes

Yes


15

PART VISECRETARY The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Does the Secretaryhave to be a localresident?

No, the Secretary may be appointedoutside the territory.

No, the secretary does not need tobe a local resident so long as thereis a director or resident representa-tive who is ordinarily resident inBermuda.

No The Secretary does not have to be alocal resident.

No

Can an assistantSecretary or secondSecretary be appointedoutside the territory?

Yes Yes, an assistant secretary can beappointed outside the territory.

Yes An assistant Secretary or secondSecretary is allowed to be appointed.

Yes

Does the companyrequire a seal?

Yes No, a company may, but need not,have a common seal.

No All companies require a corporateseal.

No

Can there be a seal foruse outside theterritory?

Yes, provided the seal is adopted bythe company.

Yes, the company may keep one ormore duplicate common seals foruse in any place inside or outsideof Bermuda.

Yes (Section 84(1)). If it is authorised by its articles thena seal can be used outside the terri-tory. This will be a facsimile of thecommon seal of the company.

Yes, if seal is adopted.

Where must the sealbe kept?

The directors provide for the safe-keeping of the seal, which is usuallymaintained at the Registered Officeof the company.

The company’s registered office. At such place as the company may,from time to time, determine andin default of any such determina-tion, at its registered office (Sec-tion 84(1)).

No provision in the Ordinance. If adopted, where the directorsdeem convenient.

Does the Secretaryhave to be qualifiedor licensed?

No No No No No

16


PART VIIACCOUNTS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Do accounts have tobe prepared?

IBC – A company shall keep suchfinancial statements, accounts andrecords as the directors considernecessary or desirable in order toreflect the financial position of thecompany (IBCA s. 67(1)).

Yes, every company must keepproper records of account withrespect to:• All sums of money received andexpended by the company andthe matters in respect of whichthe receipt and expenditure takesplace.

• All sales and purchases of goodsby the company.

• The assets and liabilities of thecompany.

The statute requires that everycompany shall cause to be keptproper books of account with re-spect to:• All sums of money received andexpended by the company andthe matters in respect of whichthe receipt and expendituretakes place;

• All sales and purchases of goodsby the company;

• The assets and liabilities of thecompany;

and provides that proper books ofaccount shall not be deemed to bekept with respect to the mattersaforesaid if there are not kept suchbooks as are necessary to give atrue and fair view of the state ofthe company’s affairs and to ex-plain its transactions (Section 59),but there is no obligation that suchaccounts be audited.

While every Company shall keepproper books of accounts, there areprovisions in Table B which can beexcluded in whole or in part.

No. However, certain regulatedentities must prepare accounts.

Is it necessary to fileaccounts?

No, unless such an obligation arisesby virtue of the company beinglicensed under another statutewhere such filing may be required.

No No, unless such an obligation arisesby virtue of the company being li-censed under another law.

No No. However, certain regulatedentities must prepare accounts.


17

ACCOUNTS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What information isrequired in accountsregarding:

Subsidiaries?

AssociatedCompanies?

This is fixed by the company’s Mem-orandum and Articles of Association.

This is fixed by the company’s Mem-orandum and Articles of Association.

No specific information is requiredby the CA.

No specific information is requiredby the CA.

Only insofar as to give a “true andfair” view.

Only insofar as to give a “true andfair” view.

No specific legislation provisions.

No specific legislation provisions.

N/A

N/A

Are group accountsrequired?

No, group accounts are not requiredpursuant to the Companies Act,1992 or the International BusinessCompanies Act, 2000.

No No No No

What records arerequired to be keptin the jurisdiction?

A Domestic company is required tokeep the following at its RegisteredOffice:• Copy of the Memorandum andArticles and all amendmentsthereto.

• Minutes of meetings and resolu-tions of shareholders of thecompany.

• Copies of any notice that isrequired under this Act.

• Any register or such like docu-ment that is required under thisAct (CA s. 18(1)).

An IBC is required to keep thefollowing at its Registered Office:• A copy of the Memorandum andArticles and all amendmentsthereto.

The records of account must be keptat the registered office of the com-pany or at such other place as thedirectors think fit.

If records of account are kept out-side Bermuda, there must be kept atthe office of the company inBermuda such records as will enablethe directors or a resident represen-tative to ascertain with reasonableaccuracy the financial position ofthe company at the end of eachthree-month period.Where the com-pany is listed on an appointed stockexchange, such records must bekept that will enable the directors orresident representative to ascertainwith reasonable accuracy the finan-cial position of the company at theend of each six-month period.

Ordinary companies only:• Register of Members(Section 40).

Ordinary companiesand exempted companies:• Register of Mortgages(Section 54).

• Register of Directors and Officers(Section 55).

Nothing specific. The records that the directors deemconvenient.

18


ACCOUNTS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What records arerequired to be keptin the jurisdiction?

• A register of all its directors andofficers.

• Such other records as theMinister may by order prescribe.

• A common seal and an imprintthereof (IBCA s. 67(2)).

Is an audit required?If so, what qualificationis required?

No. However, this may bedetermined by the company’sconstitutive documents or maybe a requirement if the companyconducts business of a categoryregulated under another law.

Yes, but the requirement may bewaived if all members and directorsof a company agree, in respect of aparticular period, that no financialstatements or auditor’s reportsneed to be reviewed at a generalmeeting or that no auditor will beappointed until the close of thenext annual general meeting.

An audit is not required in terms ofthe statute but may be required if acompany conducts business of acategory regulated under anotherlaw.

No

19


PART VIII - LOANS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Do charges have to beregistered?

No No. However, it is advisable to reg-ister a charge in order to ensurethe priority of the charge inBermuda.

Only in the Register of Mortgages& Charges maintained by the com-pany (Section 54).

No current provision for registrationof charges at the Companies Reg-istry.

No. However, registration of gen-eral pledge of assets is optional.Mortgages over immovable prop-erty located in Panama must beregistered in the Public Registry.

Are there limitationson borrowing?

No. However, an IBC is deemed non-resident for Exchange Control pur-poses and cannot borrow Bahamiandollars. It must deal in foreign cur-rency unless otherwise permitted bythe Central Bank of The Bahamas.

If expressly provided for in theconstitutional documents of acompany.

No No – subject only to company’sArticles of Association.

No

Are there capital-toloan ratios?

No, except for banking and financialinstitutions regulated under theBanks & Trust Companies Regula-tions or the Insurance Act.

No No, except for banking and finan-cial institutions regulated under theBanks & Trust Companies Law orInsurance Law.

No, except for banks. No

Is there a process forstriking off withoutformal liquidation?

Domestic – Yes. The Registrar ofCompanies can remove a domesticcompany from the Register ofCompanies (CA s. 271).

IBC – Yes. The Registrar of Compa-nies may strike off a company if hehas come to believe that the com-pany no longer complies with theAct (IBCA s. 165).

Yes, the Registrar may strike off adefunct company under the CA.

Yes (Sections 156). Yes.Where Registrar has reasonablecause to believe that a company isnot carrying on business or is notin operation, he may strike thecompany off the Register and thecompany shall thereupon bedissolved.

Annual franchise tax for 10 years.

What is the cost of aliquidation?

Minimal government filing fees arelevied. Liquidator’s and legal feesare by agreement and negotiable.

Minimal government filing fees arelevied. Liquidator’s and legal feesare by agreement.

There is a USD250 fee payable toTurks and Caicos Islands Govern-ment.

USD600 for dissolution andstandard liquidation.

20


LOANS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What are the report-ing requirementsrelating to theliquidation orstriking off?

Publication of notices in the OfficialGazette.

For a liquidation, notices of thewinding-up of a company, the ap-pointment of a liquidator and proofof debts must be published in theOfficial Gazette. The Registrar ofCompanies must also be notified inwriting. Once the liquidation is ap-proved by the shareholders, theRegistrar must be informed and,upon submission of the relevantdocuments, will issue a certificateof dissolution.

Advertising in Official Gazette. Where Registrar has reasonablecause to believe that a company isnot carrying on business or is not inoperation, he may strike the com-pany off the Register and the com-pany shall thereupon be dissolved.

Company may be voluntarily woundup if the company has passed aspecial resolution to this effect.Notice of the special resolutionmust be served on the CompaniesRegistry and in the Gazette. Oncethe affairs of the company are fullywound up the liquidator must calla general meeting to have the liq-uidator’s account laid before themeeting. Notice of the meetingmust be published in the Gazetteand least one month prior to meet-ing. The liquidator must report onthe meeting to the Registrar. Thecompany is deemed dissolved uponthe expiration of three months fromthe registration of such return.

Dissolution must be filed in thePublic Registry and notice pub-lished in a local newspaper.

What are the require-ments as to the reten-tion of records andwhere must recordsbe retained?

No requirement to retain recordsunless governed by another law orstatute.

Six years.

21


PART IX - GENERAL The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Is a companyperpetual?

Yes, unless registered as a LimitedDuration Company.

Yes Yes, unless registered as a Limita-tion Duration Company.

Companies are perpetual, unlessstruck off by the Registrar orwound up.

Yes, if so expressed in the Articles ofIncorporation.

Does the companyhave to show that itsliability is limited?

See chart below. A domestic com-pany is also restricted from usingthe following: Corporation, Corp.,Gesellschaft mit beschrankter Haf-tung, GmbH., Societe Anonyme, andSociedad Anonima.

An IBC is not restricted in its useof these designations.

Yes, a company limited by shares ora company limited by guaranteemust contain in its name the word“Limited” or “Ltd.” The CA providesthat the word “Limited” or “Ltd.”can only be dispensed where it isproved to the satisfaction of theMinister of Finance that the com-pany to be formed is charitable orpromotes art, science, religion orsport and complies with certainother requirements listed in the CA.

Ordinary Companies - Yes.

Exempted Companies - No.

Ordinary Companies - Yes.

Exempted Companies - No.

If so, is the companyfree to use any of thefollowing for thispurpose?

Limited

Ltd

Incorporated

Inc

Limitada

S.A.

A.G.

Domestic IBCCompanies Companies

Yes Yes

Yes Yes

No Yes

No Yes

No Yes

No Yes

No Yes

Local ExemptedCompanies Companies

Yes Yes

Yes Yes

No No

No No

No No

No No

No No

Ordinary ExemptedCompanies Companies

Yes (Section 7(1)(a)) Yes

Yes (Section 7(1)(a)) Yes

No Yes

No Yes

No Yes

No Yes

No Yes


Yes

Yes

No

No

No

No

No


Yes N/A

Yes N/A

Yes N/A

Yes N/A

22


Norestrictions

GENERAL The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Is a Company prohib-ited from using certainwords in its name?

e.g: royal

imperial

bank

trust

insurance

corporationor corp

other

Yes, except with the consent of theRegistrar of Companies.

Yes, except with the consent of theRegistrar of Companies.

Yes. However, use is subject to com-pliance with the Bank and TrustsCompanies Regulations Act.

Yes. However, use is subject to com-pliance with the Bank and TrustsCompanies Regulations Act.

Yes. However, use is subject tocompliance with the Insurance Actand approval by the Registrar ofInsurance.

No, so long as followed by “Limited”or “Ltd.” in the case of a domesticcompany. There is no such restrictionfor an IBC.

See Appendix A for detaileddiscussion of naming restrictions.

Yes, if it suggests patronage ofroyal family or connection with anygovernment, whether of Bermudaor elsewhere.

No

No

No

No

No

Yes, “Chamber of Commerce,”“municipal,” “chartered,” “co-op-erative” and “building society.”

Generally, no company may beregistered with a name which, inthe opinion of the Registrar, isundesirable.

Yes, except with the consent of theRegistrar (Section 30(2)(a)).

Yes, except with the consent of theRegistrar (Section 30(2)(a)).

Yes, use is subject to compliancewith the terms of the Banks & TrustCompanies Law.

Yes, use is subject to compliancewith the terms of the Banks & TrustCompanies Law.

Yes, use is subject to compliancewith the terms of the Insurance Law.

No, so long as followed by “Limited”or “Ltd.” in the case of an ordinarycompany. There is no such restrictionfor an exempted company.

See Appendix A for detaileddiscussion of naming restrictions.

Without written consent from thePermanent Secretary of Finance,companies are prohibited fromusing the words, Royal, Imperial,Bank, Trust, Insurance, Corporate,Corp., Underwriter, Building Society,Commonwealth, Guarantee,Indemnity, Fidelity, Assurance, Co-operative Society, Trustee, British,Empire, Municipal, Chartered,Friendly Society, Reinsurance

No

No

Yes (unless approved by regulatoryentity).



No

Yes

23


GENERAL The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Are there anyExchange Controls?

If so, what are thereportingrequirements?

Yes. Domestic companies aredeemed resident for exchange con-trol purposes and are subject to ex-change control regulations. In theevent that a domestic company isbeneficially owned by non-Bahami-ans and is conducting business out-side the jurisdiction, it should applyto the Central Bank to be desig-nated non-resident for exchangecontrol purposes to ensure that it isnot subject to exchange controls.IBCs are deemed to be non-residentfor exchange control purposes andare not subject to exchange controlsunless the IBC is deemed residentfor exchange control purposes bythe Central Bank or by some otherstatute regulating its activities inThe Bahamas.

Bermuda is independent for thepurposes of exchange control. Ex-empted companies and permitcompanies are designated non-resi-dent for exchange control purposes.This designation allows these enti-ties to operate free of exchangecontrol regulations.

No No exchange controls. No

Can bank accounts bemaintained in foreigncurrencies?

Yes. In some instances the priorapproval of the Central Bank maybe required.

Yes Yes Yes Yes

What is the officiallanguage for legaldocuments?

English English English English Spanish. Other languages can beused, but certified translations arerequired for filing at public offices.

Which legal documentsare to be executedunder seal?

Deeds Deeds only (at directors’ discretion). Deeds only. N/A

Which legal documentsare to be sworn beforea notary?

None None None Amendments to the Articles ofIncorporation.

24


PART XINVESTMENTFUNDS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What are the mostcommon fund struc-tures and when arethey utilised?

Are segregated cellstructures available?

The most common fund structuresare Company (including SegregatedAccounts Company), Limited Part-nership and Unit Trust. SegregatedAccounts Companies may be used.

Yes. Segregated cell structures areavailable.

The most common fund structure isformed by incorporating an ex-empted company which is statedto be mutual fund. Other fundstructures include:• Unit trust scheme• Closed-ended fund• Limited Partnerships

Segregated cell structures areavailable.

Company, partnership and truststructures are all available for use.

Segregated Portfolio Companiesmay be used.

The most common fund structuresare open-ended investments fundseither issuing preference shares inlocal limited companies or interestsin limited liability partnerships.

Segregated cell structures areavailable but only for licensedinsurance companies.

Corporations and Trusts.

No.

What types of fundsare required toregister with thelocal authorities?

See Appendix B for detaileddiscussion of regulationrequirements (page 30).

The Investment Funds Act 2006(“IFA”) and related regulationsapply to mutual fund companies,unit trusts and limited partnershipsbut not closed-ended funds.

The IFA requires funds to be autho-rised unless they are exemptedfrom authorisation. If authorised,funds are classified as “Institu-tional Funds”, AdministeredFunds” or “Standard Funds” andwill be registered with theBermuda Monetary Authority.

There are three types of regulatedmutual funds under the Law: a Li-censed Mutual Fund, an Adminis-tered Mutual Fund and aRegistered Mutual Fund.

See Appendix B for detaileddiscussion of regulationrequirements (page 3).

All funds are required to registerwith the local authorities exceptthose on the stock exchange orthose exempted by law. Exemptedfunds are:• Mutual funds in which the equityinterests are held by not morethan 15 investors, the majority ofwhom are capable of appointingor removing the operator of thefund.

• Mutual funds that are onlyauthorised to issue equity inter-ests to professional investors areexempt from the requirements ifat all times a mutual fund admin-istrator provides an office in theIslands for the fund.

Those that are publicly offered inPanama; and those that are man-aged in or from Panama, unlessthey are private funds. PrivateFunds are those that are not pub-licly offered and are limited to nomore than 50 investors with a networth of at least one million dollars(qualified investors).

25


INVESTMENTFUNDS The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

What are the differentcategories and fees ofregistration?

How long does ittake?

Application fees for a InvestmentFund License for Standard, Profes-sional or SMART Funds is BSD750and non-refundable. The initialregistration fee for a RecognizedForeign Fund is BSD100 and non-refundable. The initial filing fee forInvestment funds licensed by anUnrestricted Investment FundAdministrator is BSD750.

Annual Investment Fund LicenseFees for Standard, Professional orSMART Investments Funds isBSD950, which is payable in the firstyear and pro-rated from the date oflicensing to December 31 of thatyear.

Annual Investment Fund License Feefor Self Administered Standard, Pro-fessional or SMART InvestmentFunds is BSD1,000, which is payablein the first year and pro-rated fromthe date of licensing to December31 of that year.

The annual filing fee for InvestmentFunds licensed by an UnrestrictedInvestment Fund Administrator isBSD950, which is payable in the firstyear and pro-rated from the date oflicensing to December 31 of thatyear.

Investment funds with sophisticated“eligible” investors only may be

An exempted company is liable topay an annual registration fee on asliding scale based upon its assess-able capital (the sum of its autho-rised share capital and sharepremium account or, in the case ofa mutual fund, its authorised sharecapital). Fees start at BMD1,995 andrise to BMD31,120. The fee for amutual fund would typically beBMD1,995.

A unit trust is not liable to pay anannual registration fee but if itsmanager is a company to which theCA applies, such manager will berequired to pay an annual fee, cur-rently BMD2,905, in respect of eachunit trust managed by that man-agement company.

The annual fee payable by an ex-empted partnership registered as alimited partnership is currentlyBMD2,235.

The IFA provides for the payment ofvarious fees on the making of anapplication for authorisation orexemption, on the making of anapplication for a change of classifi-cation and annually thereafter onor before 30 April, as follows:• Application fee for authorisation(all funds) - BMD750.

• Reclassification fee (all funds) -BMD750.

There are three types of regulatedmutual funds under the law: aLicensed Mutual Fund, an Adminis-tered Mutual Fund and a RegisteredMutual Fund.

Licensed Mutual FundA fund which has applied for andbeen granted a Mutual FundLicense by CIMA and has either (a)if a company or a partnership, aregistered office in the Cayman Is-lands, or (b) if a unit trust, a trusteelicensed under the Banks and TrustCompanies Law of the CaymanIslands.

Administered Mutual FundA fund which has a licensed mutualfund administrator providing itsprincipal office in the CaymanIslands.

Registered Mutual FundA fund which either (a) has a mini-mum subscription per investor ofUSD100,000 (or its equivalent in anyother currency) or (b) has listed itsequity interests on a stock ex-change approved by CIMA.

This is the most common andstraightforward form of regulatedfund in the Cayman Islands. If thefund satisfies one of the above twocriteria, there is no requirement forit to be represented by a licensed

Mutual funds administrator licensefee: USD2,000.

Restricted mutual fundadministrators license fee: USD1,000.

Exempted mutual funds fee: USD200.

Registration of a mutual fund:USD500 with annual fee of USD500.

Recognition of a mutual fundapplication fee: USD500.

Licensed mutual fund annual fee:USD500.

The length of time to register willdepend on the nature of the fund,its complexity and the amount ofdue diligence required to be carriedout by the Financial Services Com-mission. Typically registration takesbetween three to six weeks.

Registry is only with the NationalSecurities Commission. Fees dependon the structure and amount of thefund. Time frame for registration isapproximately four months.

26



What are the differentcategories and fees ofregistration?

How long does ittake?

licensed by an Unrestricted Fund Ad-ministrator or the Securities Com-mission of The Bahamas. A StandardInvestment Fund must be licensedby the Securities Commission of TheBahamas.

An Investment Fund licensed by anUnrestricted Fund Administratormay take one day or same day onceall documents are approved by therelevant parties (sponsors, lawyers,administrators) and due diligence iscomplete.

With respect to Investment Fundslicensed by the Securities Commis-sion, where the Investment Fund islimited to eligible investors, theSecurities Commission will licensewithin 72 hours.Where the Invest-ment Fund is of a retail nature, theSecurities Commission will licensewithin six to eight weeks.

Annual Fee:• Institutional fund - BMD850.• Administered fund - BMD850.• Standard fund - BMD1,350.

Application fee for exempted funds- BMD500.

Annual fee for exempted funds -BMD600.

It generally takes two to five daysfor the BMA to process anapplication.

mutual fund administrator or to belicensed by CIMA. This form of fundis the least regulated and super-vised as it is assumed that personswho are in a position to invest theminimum subscription amount ofUSD100,000 are sophisticatedenough to understand and assessthe risks in making an investmentin the fund or that the listed fundswill be subject to regulation andsupervision by the relevant stockexchange.

Funds in each category pay thesame annual fee to CIMA, currentlyKYD3,000 (USD3,690) per annum.

Are local directors,administrators,auditors or otherservice providersrequired?

Funds are not required to have localdirectors.

See Appendix C for detaileddiscussion (page 32).

Yes, a fund must appoint aninvestment manager, auditor andadministrator.

An entity regulated in terms of theMutual Funds Law is required toappoint an approved local auditor.

Yes Not unless the fund is managedfrom Panama, in which caseadministrators, auditors andservice providers must be local.

27



Are any local taxesimposed on the fundor its investors?

No, save for the payment of annualregistration fees to the Registrar ofCompanies and the SecuritiesCommission of The Bahamas.

There is no Bermuda income, corpo-ration or profits tax, withholdingtax, capital gains tax, capital trans-fer tax, estate duty or inheritancetax payable by a mutual fund com-pany, a closed-end fund, a unittrust, a limited partnership or theirshareholders, unit holders or limitedpartners other than shareholders orunit holders or limited partners or-dinarily resident in Bermuda.

No, save for the payment of the an-nual registration fees to the Regis-trar of Companies (applicable to allcompanies) and the Cayman IslandsMonetary Authority.

There are no local taxes on funds ortheir investors.

Only if income is generated withinthe territory of the Republic ofPanama.

Is there a local stockexchange to list an in-vestment fund?

Yes, The Bahamas InternationalStock Exchange.

Yes, the Bermuda Stock Exchange. Yes, the Cayman Islands Stock Ex-change.

There is no local stock exchange inTCI.

Yes

Are locally incorpo-rated investmentmanagers requiredto register with localauthorities?

Yes, under the Securities IndustryAct and Regulations.

Yes Yes, under the Securities InvestmentBusiness Law.

All locally incorporated investmentmanagers are required to belicensed by and register with thelocal authorities.

Yes

28



ASSURANCE – Only with the express prior permission of the Registrar of Companies.

BUILDING SOCIETY – Only with the express prior permission of the Registrar of Companies.

CHAMBER OF COMMERCE – Only with the express prior permission of the Registrar ofCompanies.

CHARTERED – Only with the express prior permission of the Registrar of Companies.

COOPERATIVE – Only with the express prior permission of the Registrar of Companies.

MUNICIPAL – Only with the express prior permission of the Registrar of Companies.

Also restricted is any other word that, in the opinion of the Registrar, suggests or is calculated tosuggest the patronage of or any connection with Her Majesty or any member of the Royal Familyor the Government of The Bahamas, a department thereof, a statutory corporation or board or alocal or municipal authority.

Any name which in the opinion of the Registrar is undesirable or misleading; “Municipal,” “Char-tered” or any words which, in the opinion of the Registrar, suggest or are calculated to suggest aconnection with any public or local authority.

No company shall be registered by a name which:

• Is identical with that by which a company in existence is already registered or so nearly resem-bles that name as to be calculated to deceive, except where the company in existence is in thecourse of being dissolved and signified its consent in such manner as the Registrar requires.

• Contains the words “Chamber of Commerce” unless the company is a company which is tobe registered under Section 80 of the statute.

• Contains the words “building society.”

Except with the consent of the Registrar, no company shall be registered by a name which:

• Contains the words “royal,” “imperial” or “empire” or in the opinion of the Registrar sug-gests, or is calculated to suggest, the patronage of Her Majesty or of any member of the RoyalFamily or connection with Her Majesty’s Government or any department thereof in the UnitedKingdom or elsewhere.

• Contains the words “municipal” or “chartered” or any words which in the opinion of the Reg-istrar suggest, or are calculated to suggest, connection with any public board or other localauthority or with any society or body incorporated by Royal Charter.

• Contains the words “co-operative,” “assurance,” “bank,” “insurance” or any similar wordwhich in the opinion of the Registrar connotes any of such activities or any derivative of any ofsuch four words or of such similar words, whether in English or in any other language, or inthe opinion of the Registrar suggests, or is calculated to suggest, any of such activities.

A company that is not an exempted limited duration company shall not be registered by a namewhich includes at its end “Limited Duration Company” or “LDC.”

APPENDIX A

What restrictions are placed on the use of certain words in a company name?

The Bahamas Cayman Islands

29


The Investment Funds Act 2003 uses the term “investment fund” or “fund” as any unit trust,company (including a limited duration company) or partnership (whether incorporated or estab-lished within or outside of The Bahamas, and if established outside of The Bahamas is managedfrom The Bahamas); which issues or has equity interests the purpose or effect of which is thepooling of investor funds with the aim of spreading investment risks and achieving profits orgains arising from the acquisition, holding, management or disposal of investments.

Under the Investment Funds Act:

An investment fund shall not carry on or attempt to carry on business unless:

• It is licensed as (i) a professional fund; (ii) a SMART fund; or (iii) a standard fund; or

• It is registered as a recognized foreign fund.

A professional or standard investment fund shall not carry on or attempt to carry on businessunless:

• It has appointed an investment fund administrator to provide its principal office.• If it is a unit trust, it has as its trustee (i) a trust company licensed under the Banks and TrustCompanies Regulation Act, with an unrestricted license; (ii) a bank licensed under the Banksand Trust Companies Regulation Act, with an unrestricted license; (iii) such other bank or trustcompany as shall have a minimum paid-up capital and non-distributable reserves ofBSD2,000,000 and is otherwise acceptable to the Commission; or (iv) a person approved by theCommission.

• A current offering document of the investment fund has been filed with the Commissionwhich complies with the Investments Fund Act (Section 9).

• The prescribed fees have been paid in respect of the investment fund.

A SMART fund shall not carry on or attempt to carry on business unless:

• It complies with any written rule of the Commission establishing parameters or requirementsin respect of the category, class or type of investment fund.


The Commission has the discretion to establish parameters and requirements as to the adminis-tration of a SMART fund or the contents of the constitutive documents and offering documentsof the SMART fund.

A recognised foreign fund shall not carry on or attempt to carry on business unless it has beenregistered with the Commission and it:

• Is licensed or registered in a prescribed jurisdiction; or• Has submitted evidence of its listing on a prescribed securities exchange; and• Has submitted to the Commission, within 30 days of the beginning of its operations as aBahamas-based investment fund the prescribed details of the investment fund; and


APPENDIX B

What types of funds are required to register with the local authorities?

The Bahamas

30


The Mutual Funds Law uses the term “mutual fund” which is defined as any company, unit trustor partnership (whether incorporated or established within or outside of the Cayman Islands, andif established outside of the Cayman Islands is managed from the Cayman Islands):

1. Which issues equity interests (i.e., shares, trust units or partnership interests that carry an enti-tlement to participate in the profits or gains of the company, unit trust or partnership, as appli-cable);

2. Which may be redeemed or repurchased at the option of the investor before the commence-ment of the winding up or the dissolution of the company, unit trust or partnership;

3. The purpose or effect of which is the pooling of investor funds with the aim of spreading in-vestment risk and enabling investors to receive profits or gains from investments.

(The definition specifically excludes persons licensed under the Banks and Trust Companies Lawor the Insurance Law and persons registered under the Building Societies Law or the Friendly So-cieties Law of the Cayman Islands.)

By virtue of the definition, the law does not extend to closed-ended investment funds (i.e., wherethe equity interests may not be redeemed or repurchased at the option of the investor), nor tofunds which issue only debt instruments. Under the law, all open-ended funds are regulated byCayman Islands Monetary Authority (“CIMA”) with two exceptions. One exception is for a fundin which the equity interests are held by not more than 15 investors, the majority of whom areable to appoint or remove the operator of the fund (the “operator” being the directors in thecase of a company, the trustee in the case of a unit trust, and the general partner in the case ofa partnership). “Investor” is defined in the law as the legal holder of record. Thus, if all equityinterests are issued to one or a few institutional nominees that hold as a matter of record suchinterests for the underlying investors, the fund will fall outside the scope of the law. The secondexception is for a non-Cayman Islands domiciled fund which is regulated by an approved over-seas regulatory authority or whose equity interests are listed on an approved stock exchange andwhich makes an invitation to the public in the Cayman Islands to subscribe for its equity interestsby or through a person who holds a license under the Securities Investment Business Law (as re-vised) of the Cayman Islands for a regulated activity specified by CIMA for this purpose.

There are three types of regulated mutual funds under the law: a Licensed Mutual Fund, anAdministered Mutual Fund and a Registered Mutual Fund.

1. Licensed Mutual FundA Licensed Mutual Fund is one which has applied for and been granted a Mutual Fund Licenseby CIMA and has either (a) if a company or a partnership, a registered office in the Cayman Is-lands, or (b) if a unit trust, a trustee licensed under the Banks and Trust Companies Law of theCayman Islands.

2. Administered Mutual FundAn Administered Mutual Fund is one which has a licensed mutual fund administrator provid-ing its principal office in the Cayman Islands.

3. Registered Mutual FundA Registered Mutual Fund is one which either (a) has a minimum subscription per investor ofUSD100,000 (or its equivalent in any other currency) or (b) has listed its equity interests on astock exchange approved by CIMA.This is the most common and straightforward form of regulated fund in the Cayman Islands. Ifthe fund satisfies one of the above two criteria, there is no requirement for it to be repre-sented by a licensed mutual fund administrator or to be licensed by CIMA. This form of fund isthe least regulated and supervised as it is assumed that persons who are in a position to in-vest the minimum subscription amount of USD100,000 are sophisticated enough to understandand assess the risks in making an investment in the fund or that the listed funds will besubject to regulation and supervision by the relevant stock exchange.

APPENDIX B

What types of funds are required to register with the local authorities?

Cayman Islands

31


An investment fund that is a unit trust shall have an operator and custodian who are independentof the investment fund administrator unless the fund is specifically exempted by the SecuritiesCommission or the operator and custodian and the administrator are deemed to be independentof each other under the Regulations (Regulation 4).

An investment fund that is a company or a partnership shall have a custodian who is independentof the investment fund administrator and of the operator of the investment fund unless the fund isspecifically exempted by the Securities Commission or the operator and custodian and the admin-istrator are deemed to be independent of each other under the Regulations (Regulation 4).

The above does not apply to self-administered funds and administrators are not a requirement inthe SFM 004 or SFM 006 SMART Funds. In addition, Foreign Custodians are permitted, if assets areof the type that requires safekeeping.

An auditor of an investment fund, in the case of an individual, must be a member in good standingof The Bahamas Institute of Chartered Accountants or of any other international accounting bodyprescribed by the Commission by notice in the Gazette; and in the case of a firm of accountants,the partners of the firm are all members of The Bahamas Institute of Chartered Accountants ingood standing, or area members in good standing of any other international accounting body pre-scribed by the Commission by notice in the Gazette. Foreign auditors are acceptable, as approvedby the Securities Commission. Annual audits are not required for the SFM 001 or SFM 006 SMARTFunds. Investors may waive the requirement for SFM 002, 003, 004 and 005 SMART Funds.

APPENDIX C

Are local directors, administrators, auditors or other service providers required?

The Bahamas

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CONTACT US The Bahamas Bermuda Cayman Islands Turks & Caicos Islands Panama

Information can also beobtained from the alliance’sheadquarters.

Meritas GlobalHeadquarters800 Hennepin AvenueSuite 600

Minneapolis, Minnesota55403 USA

Tel: +1 612 339 8680

[email protected]

www.meritas.org

Chancellors Chambers is a fullservice law firm, providing advisoryservices covering all aspects of lawrelating to business activity andspecializing in real estate and resortdevelopments in The Bahamas, oneof the premiere tourist destinationsand international financial centresin the world.

The Firm is affiliated with ChancellorsCorporate Services Limited, a man-agement company licensed underthe Financial & Corporate ServiceProviders Act, 2000, to provideincorporation, corporate manage-ment, accounting and re-invoicing,nominee director, protector, offshoreshared offices and virtual officesand business advisory services toclients. Chancellors CorporateServices Limited also providesbusiness advisory services, financialservices and entrepreneurialdevelopment services.

Cox Hallett Wilkinson (CHW) is oneof Bermuda’s leading commerciallaw firms.

It was formed in January 1998 bythe merger of two long establishedlocal law firms and subsequentlystrengthened its presence on the is-land with the merger with formerErnst & Young-tied firm Hollis & Co.in 2004.

The firm serves a diverse local andinternational clientele focusingprimarily on corporate and com-mercial, litigation and disputeresolution, real estate, employmentand immigration, private client andintellectual property-related mat-ters.

Established in 1970, Campbells isone of the leading law firms in theCayman Islands. The firm provides acomprehensive range of legal serv-ices to the international and localfinancial markets with special em-phasis on commercial matters andadvises in connection with mutualfunds, capital markets, banking andfinance, trusts, general commercialmatters, real estate, shipping, litiga-tion, insolvency and restructuring,compliance and regulatory issues.

Miller Simons O'Sullivan wasfounded in 1981. It has grown overthe years to be recognized as one ofthe largest and most experiencedlaw firms in the Turks & Caicos Is-lands, advising in all aspects ofcommercial and corporate law.

Miller Simons O'Sullivan is a fullservice law firm advising on all as-pects of company and commerciallaw. It provides a full corporate for-mation and management service,and in association with M&S TrustCompany Limited, a licensedtrustee, can also provide its clientswith full trustee services and invest-ment services.

The firm has an extensive interna-tional client base, and also acts fora substantial number of the largercommercial interests in the Turks &Caicos Islands.

Alemán, Cordero, Galindo & Leewas established in 1985 andquickly became one of Panama’sleading law firms in the off-shorearea as well as in representinglarge corporations doing businessin the country. The firm’s off-shorepractice is supported by its officesin the British Virgin Islands, Belize,The Bahamas and Luxembourg, andalso by a strong network of corre-spondents throughout Europe, Asia,the United States and Latin Amer-ica. In its local practice, the bankingdepartment is one of the firm’smain areas of strength, providingservices to numerous banks estab-lished in the country. The firm’swell-trained lawyers have strongexpertise in their respective areasof practice and share the firm’scommitment to providing promptand efficient solutions to clients’needs. The firm invests heavily intelecommunications and computerequipment in order to ensure thatcontact with clients is maintainedat an optimum level.

Contact

Kenred M. A. Dorsett

[email protected]

Tel: +1 242 394 1823

www.ccsbahamas.com

Contact

David G. Cooper

[email protected]

Tel: +1 441 295 4630

www.chw.com

Contact

Shaun McCann

[email protected]

Tel: +1 345 949 2648

www.campbells.com.ky

Contact

Neil R. Coles

[email protected]

Tel: +1 649 946 4650

www.mslaw.tc

Contact

Arturo Gerbaud

[email protected]

Tel: +1 507 269 2620

www.alcogal.com

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Offs ho re - Beatow Partners · THE BAHAMAS BERMUDA CAYMAN ISLANDS TURKS & CAICOS ISLANDS PANAMA Offs ho re Financial Services Guide. Content ... fcp y’ A l Association.

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