Offshore Trust
One of the best asset protection, wealth management, and confidentiality vehicles
Bahamas Trust
Opening a Trust in the Bahamas
To qualify as a Bahamian trust, the trust must be governed by Bahamian law. However, there is no requirement for the trust’s assets to be located in The Bahamas, nor must the settlor or beneficiaries be residents.
This flexibility has made Bahamian trusts an increasingly popular choice for individuals seeking effective wealth management solutions. Positioned southeast of Florida, The Bahamas is recognized as a tax-efficient jurisdiction with a stable legal framework for establishing and managing trusts. Even if the assets and parties involved are outside of The Bahamas, a Bahamian trust structure can still be utilized. Typically, these trusts consist of a settlor, trustees, and beneficiaries, and may also include a protector, who serves to oversee the relationship between the settlor and trustee, ensuring added oversight.
Bahamian trusts are particularly valued for their asset protection benefits, as well as the lack of local taxes on income, capital gains, wealth, or estates for non-resident beneficiaries. With a legal system based on English common law, and enhanced by modern statutes, The Bahamas provides a strong foundation for trust management, reinforcing its status as a preferred location for trust formation. The regulatory environment further enhances the appeal of Bahamian trusts as part of a comprehensive wealth management strategy, offering significant legal and financial advantages alongside efficient administration.
The Bahamas as a Tax-Efficient Trust Jurisdiction
The evolution of trust laws in The Bahamas reflects its growth as a leading offshore financial center. Rooted in English common law, the legal framework has been updated to align with global financial developments.
A significant milestone was the amendment of the Trustee Act in 1998, which introduced modern trust structures into Bahamian law. The Purpose Trust Act also facilitated the creation of trusts for specific purposes beyond individual beneficiaries, enabling more advanced estate planning and charitable activities. The Fraudulent Dispositions Act further enhances protection by preventing fraudulent transfers into trusts.
In 2011, updates to Bahamian trust laws included the Trustee (Amendment) Act, which expanded trustee powers and protections. Additionally, the Rule Against Perpetuities Abolition Act (RAPPA) repealed the traditional time limit on trusts, allowing for trusts of unlimited duration to meet modern estate planning needs.
These legal developments underscore The Bahamas’ commitment to offering a reliable and adaptable platform for trust creation and administration, securing its role as a leading global financial hub.
Bahamas International Trust
Bahamian trusts are particularly valued for their asset protection benefits, as well as the lack of local taxes on income, capital gains, wealth, or estates for non-resident beneficiaries.
Bahamas
+ Structure
Creating a trust in The Bahamas offers numerous advantages, such as tax exemptions and a robust legal framework that supports various estate planning and asset protection strategies. Include:
- Settlor: The individual who transfers assets into the trust and defines its management and distribution terms.
- Trustee: The person or entity responsible for managing the trust’s assets in line with the trust agreement, for the benefit of the beneficiaries.
- Beneficiaries: The individuals or organizations designated to receive benefits from the trust.
- Private Trust Company (PTC): A specialized entity serving as trustee, offering families greater control over trust administration.
- Protector: An entity that oversees the trustee’s actions, ensuring compliance with the trust terms and the best interests of the beneficiaries. Protectors are common in offshore jurisdictions like The Bahamas and serve to safeguard trust assets.
+ Types of Trusts
- Asset Protection Trusts: Designed to shield assets from creditors.
- Charitable Trusts: Established to support charitable organizations rather than individuals.
- Purpose Trusts: Created under the Purpose Trust Act of 2004 to serve non-charitable goals without named beneficiaries.
- Private Trust Companies: Entities that act as trustees for family trusts.
+ Establishing a Trust in The Bahamas
- Choose the Trust Type: Select the most appropriate trust based on specific objectives, such as estate planning, asset protection, or charitable purposes.
- Prepare the Trust Document: Draft the legal agreement defining the trust’s terms, trustee responsibilities, and beneficiary rights.
- Appoint a Trustee and PTC (if necessary): Choose a reliable trustee or establish a Private Trust Company to manage the trust.
- Transfer Assets: The settlor transfers ownership of assets into the trust for management by the trustee.
- Register the Trust (if applicable): Some trusts require registration, though those benefiting non-residents may not, ensuring greater confidentiality.
- Pay Required Fees: Establishing the trust typically incurs a nominal Trust Duty of $50 USD.
+ Regulatory Bodies and Compliance
The Central Bank of The Bahamas plays a key role in regulating trust companies, ensuring high standards of governance and compliance.
Additionally, financial services regulators ensure that the trust sector adheres to international best practices, bolstering The Bahamas’ reputation as a cooperative and compliant jurisdiction within the global financial landscape.
Benefits of Bahamian Trusts
Bahamian trusts provide a range of advantages, particularly in the areas of asset protection, wealth management, and confidentiality. They are particularly appealing to non-resident beneficiaries seeking a secure jurisdiction for managing their wealth. Benefits include:
Asset Protection
Strong legal safeguards protect assets from creditors and external claims.
Estate Management
Investment Flexibility
Privacy
Perpetuity and Special Trusts
The Bahamas allows perpetual trusts and offers Asset Protection Trusts (APTs) for enhanced asset security.
Tax Benefits and Compliance
The Bahamas is known for its tax-neutral status, with no income, capital gains, inheritance, or estate taxes levied on trusts. However, it is crucial for individuals establishing Bahamian trusts to remain compliant with international tax obligations. For instance, U.S. citizens must comply with the Foreign Account Tax Compliance Act (FATCA), ensuring proper reporting to the IRS.
Bahamian trusts are an attractive option for individuals seeking a tax-neutral jurisdiction that offers privacy, asset protection, and enhanced estate planning.
Which services we do and do not do
What we do
Under our Services portfolio, we are EXCLUSIVELY engaged in assisting worldwide clients, either individuals or corporate entities, to set up their business overseas. In order to allow every client to properly register their business at an international jurisdiction, ATRIUM & ASSOCIATES provides all related services including company formation, assistance to locate local registered offices for their new business company, helping to open business bank account, and introducing client to local chartered accountants.
What we don’t do
ATRIUM & ASSOCIATES does not provide investment or financial advice, and any sort of financial business activity.
How can we help you?
Should you have any question, our Business Development Managers team will be ready to guide and assist you!
