The Bahamas Offshore Banking: A Detailed Overview

Can Expats Open Offshore Accounts in the Bahamas?

The Bahamas allows anyone over the age of 18 to set up offshore accounts in the country, provided they meet relevant criteria. The specific requirements for opening an offshore bank account in the Bahamas vary by bank, but they generally include:

• Proof of identity
• Proof of residence
• Proof of funds legality
• Background check

The majority of banks in the Bahamas enable expats to open their accounts remotely, and you can choose between two types of offshore accounts:

Why Is Offshore Banking in the Bahamas Popular?

The Bahamas is a premier offshore banking destination for expats because of its:

1. Regulated banking system
2. Offshore banking expertise
3. Streamlined account opening process
4. Favorable tax legislation

Regulated Banking System

The Bahamas holds a well-established position in the financial and banking sector. Its economy relies heavily on the financial services sector, which accounts for an estimated 10–15% of the nation’s GDP, making it the second largest contributor after tourism.

Although the Bahamas now operates a banking system subject to strict regulation and adheres to rigorous international standards for security and information exchange, this was not always the case. In the 1960s, a series of external and internal events eventually led to the introduction of a legal framework that allowed more efficient management of financial activities.

Offshore Banking Expertise

Backed by decades of experience managing financial services for non-residents and foreign companies, the offshore banking expertise in the Bahamas ensures secure, efficient, and legally compliant banking operations, making the jurisdiction highly attractive to expats, investors, and businesses seeking financial protection and growth.

Bahamian offshore banks specialise in wealth management, asset protection, and customised financial services tailored to the needs of international clients. Their offerings include forming offshore trusts to shield wealth, establishing offshore LLCs to separate personal and business assets, and providing access to international insurance products to safeguard against financial instability.

Their deep understanding of global financial markets enables them to mitigate risks associated with fluctuating currencies, ensuring long-term financial stability for their clients.

Streamlined Account Opening Process

Banks in the Bahamas have streamlined the process of opening personal and corporate offshore accounts remotely, saving their clients time.

Most banks nowadays allow online submission of necessary documentation and provide clear, step-by-step instructions, entirely eliminating the need for in-person visits. Expats can use online verification methods, such as scanned and notarised personal documents, as well as video calls or digital signatures, to authenticate identities and ensure compliance with regulatory requirements.

Financial advisers at specialist firms such as Titan Wealth International can offer valuable advice on choosing an offshore bank account in the Bahamas. Their expertise in international banking practices and understanding of the available services can help you select a bank that aligns with your needs for both personal and corporate accounts.

Favorable Tax Legislation

A key reason why offshore banking is so popular in the Bahamas is the country’s tax laws. In the Bahamas, there are no taxes on:

• Income
• Inheritance
• Capital gains
• Gifts
• Estate

The lack of direct taxes allows expats to significantly reduce their tax liabilities by setting up an offshore account in the Bahamas. The favourable tax regime is especially advantageous to expats who live in countries with high tax rates, as they can save a considerable amount of earnings by opening accounts in the Bahamas.

The country earns through indirect taxes, such as:

• VAT: 10% on imported, bought and sold goods used in the Bahamas. There is no VAT on exported goods.
• Stamp duty: Gradually increasing stamp duty, ranging from 2.5% on assets valued under $100,000 to 10% on assets valued over $1,000,000. It is divided between the seller and the buyer.
• Business license: Ranging from several hundred to several thousand dollars depending on the company type (LLC, IBC, foundation, etc.), business licences may be a financial liability expats need to account for.
• Real property tax: Residential properties valued between $300,000 and $500,000 are subject to a 0.625% annual tax, while any part exceeding $500,000 is taxed at 1% per annum, with a maximum cap of $120,000. Commercial properties are taxed at 1% annually if valued under $500,000 and 2% for any portion above this threshold.

The Bahamas also charges an annual fee for maintaining companies under the provisions of the Companies Act. The fee is $950 if the company is at least 60% Bahamian-owned; if not, the fee is $1,600.

While enjoying tax benefits, expats must comply with both Bahamian regulations and the tax laws of their home country and the country of residence, as some jurisdictions require the reporting of foreign assets and income. Additionally, the Bahamas participates in the Automatic Exchange of Financial Account Information under the Common Reporting Standard (CRS), which facilitates the sharing of financial account information with tax authorities in participating countries, ensuring greater transparency and compliance.

The Benefits of Offshore Banking in the Bahamas for Expats

For expats, offshore banking in the Bahamas offers several advantages beyond the standard benefits of asset protection and tax efficiency. It provides a secure, flexible, and globally accessible financial solution for those living and working abroad.

1. Multi-Currency Management

Expats often earn income in multiple currencies and may need to manage international transactions. Many Bahamian offshore banks offer multi-currency accounts, allowing expats to:

• Hold and transfer funds in different currencies without constant conversions.
• Reduce exposure to exchange rate fluctuations.
• Optimise financial management for income earned across different jurisdictions.

2. Remote Access to Financial Services

For expats who move frequently or live in regions with less developed banking infrastructure, having a Bahamas offshore account provides:

• Remote banking access, allowing for easy transfers and international transactions.
• Secure digital platforms to manage accounts, pay bills, and handle investments from anywhere in the world.
• Flexible asset management, making it easier to invest globally while maintaining financial stability.

3. Protection Against Political and Economic Uncertainty

Expats residing in politically unstable or high-tax jurisdictions can benefit from offshore banking in the Bahamas as it offers:

• A stable financial environment regulated by international banking standards.
• Greater financial security compared to banks in certain emerging markets.
• Confidentiality and estate planning advantages, especially for high-net-worth individuals.

4. Financial Efficiency for Globally Mobile Expats

Expats who frequently move between countries can benefit from an offshore bank account in the Bahamas by:

• Avoiding the need to open and close local bank accounts in every new country.
• Ensuring continuity in financial management and wealth structuring, regardless of residency changes.
• Accessing international investment opportunities that may not be available in their country of residence.

Important Considerations When Opening an Offshore Account in the Bahamas

Expats should be aware of several factors before opening an offshore account in the Bahamas. Understanding their impact can help you determine whether the Bahamas is the most suitable destination for your offshore account.

Limited Banking Technologies

Despite its financial sector accounting for a significant portion of its GDP, a small portion of Bahamian banks have yet to adopt modern banking technologies. As a result, expats could face:

• Lengthy offshore account opening procedures.
• Slower transactions.
• More cumbersome banking experiences.

For this reason, it’s important to dedicate time to researching your options so you can determine which financial institution can best accommodate your needs.

Reduced Banking Secrecy

Until recently, the Bahamas, like other well-known offshore jurisdictions such as the Cayman Islands, was considered to be a haven characterised by stringent banking secrecy and poor monitoring of foreign transactions. Notably, in 2000, the United States Department of Treasury and the Financial Crimes Enforcement Network issued an advisory discussing serious deficiencies in the country’s anti-money laundering systems.

The advisory mentioned a lack of rules that benefited individuals who prioritised financial privacy, but it caused the Bahamas to be blacklisted by the Financial Action Task Force (FATF) because the country was seen as “non-cooperative in the fight against money laundering.” The European Union also blacklisted the Bahamas as a non-cooperative tax haven.

To meet international standards, the Bahamas created a new legal framework that revolutionised its financial sector. As of 2024, the EU has removed the Bahamas from its list of non-cooperative jurisdictions, alongside Belize, Seychelles, and Turks and Caicos Islands.

While remaining committed to strict bank secrecy, the Bahamas no longer offers the financial secrecy it was traditionally associated with. It follows strict exchange control rules that govern foreign currency transactions.

Account Usage Limitations

Banks in the Bahamas have the discretion to establish their account usage policies for non-residents. For example, certain banks may impose limits on the number of bank cards available to expats depending on the type of account they hold. Additionally, banks may set varying conditions regarding the extent of access granted to an expat’s family members.

These limitations are bank-specific. Expats who have specific account usage requirements should research offers from different banks to find the most suitable one.

Working with experienced financial advisers can help you better understand the limitations of opening an offshore account in the Bahamas. Advisers at Titan Wealth International have vast cross-border financial expertise and can help expats maximise the benefits of offshore accounts while ensuring full compliance with relevant laws both in the Bahamas and their country of residence.

Tax Implications for Expats Using Offshore Banking in the Bahamas

While the Bahamas provides an attractive tax environment, expats must consider tax obligations in their country of residence and the international tax compliance frameworks in place.

Does Having a Bahamas Offshore Account Affect Tax Obligations in Your Country of Residence?

The Bahamas has no income tax, capital gains tax, or inheritance tax, making it a tax-efficient jurisdiction. However, expats are still subject to tax laws in their country of residence and may need to report offshore income, interest, or gains.

Some countries impose foreign income tax reporting requirements, meaning expats may need to declare their offshore assets to local tax authorities.

The Common Reporting Standard (CRS) and Its Impact on Expats

The Bahamas is a participant in the CRS, which means it shares financial account information with tax authorities in participating countries.

Expats living in CRS-compliant countries (e.g., the UK, Australia, and the EU) must declare their offshore accounts and income to avoid penalties.

This means offshore accounts in the Bahamas are not completely private and require careful tax planning.

FATCA Compliance for US-Connected Expats

US citizens and Green Card holders must comply with the Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to report account details to the IRS.

Any offshore account exceeding $10,000 must be reported via the FBAR (Foreign Bank Account Report).

Expats with significant offshore holdings may also need to file Form 8938 with their US tax return.

Double Taxation Agreements (DTAs) and Offshore Banking

The Bahamas has limited double taxation agreements (DTAs), meaning expats should check if their home country allows for tax relief on foreign earnings.

By understanding these tax implications, expats can ensure that their offshore banking strategy aligns with both Bahamian and international tax regulations, maximising financial benefits while remaining compliant.

What Are the Requirements for Setting up an Offshore Account in the Bahamas?

Expats who want to want to open an offshore account in the Bahamas have to meet the following requirements:

1. Submit the necessary documentation
2. Deposit the minimum required funds

Submit the Necessary Documentation

Whether opening a private or business offshore account, you’ll need to provide certain documents to begin the process. This is mandatory regardless of the chosen bank.

The paperwork you should present includes:

If you’re setting up an offshore account for a company, you may need to provide additional documents, such as the certificate of incorporation or evidence of licensed activity.

In addition to these documents, some banks may require you to explain the intended account usage and disclose estimated transaction volumes.

Deposit the Minimum Required Funds

Banks in the Bahamas may require a specific amount of money to be deposited into your offshore account once you open it. There are no universal rules on the minimum amount, and it can vary significantly depending on the bank.

If you’re opening a personal offshore account, expect the minimum deposit amount to fall within the $1,000–$5,000 range. For company accounts, some banks may request that you deposit up to $250,000.

Certain banks may require you to always have a minimum balance in your account, but the exact amount varies depending on the bank.

How To Open an Offshore Account in the Bahamas

Expats who want to set up an offshore account in the Bahamas should follow these steps:

1. Find a bank that works with expats: Not all banks in the Bahamas cater to non-residents, and those that do may have strict requirements or limited offerings. To select a bank that aligns with your needs, such as remote account creation, consult a financial adviser.
2. Choose the type of bank account: Depending on the intended account usage, choose between a personal and company offshore account.
3. Fill out the application form: Complete the chosen bank’s application form and attach the required documentation. Double-check your info before submitting the form as mistakes can delay the account creation process.
4. Verify your identity: Some banks in the Bahamas require you to verify your identity via video call. During the call, you’ll need to present proof of your identity by providing your ID card or passport.
5. Wait for approval: The bank will review your application and verify the provided documentation. Depending on the bank, this phase should be completed in approximately 3–5 business days, but it may take longer.
6. Deposit money into your account: After the bank has opened your account, you will receive credentials to access it and make the required minimum deposit.