Business License Bill, 2023 and IBCs
AIBT, BFSB and the Ministry of Finance held an industry consultation on the new provisions in the Business License Bill, 2023 (the "Bill") as it pertains to IBCs who are doing business in or from within The Bahamas and the financial services industry. We are providing this written statement for the benefit of those who were not able to attend the consultation.
The Business License Act (the "Act") is only applicable to a person who carries on a business in or from within The Bahamas1 . Business "includes a profession. calling, vocation, occupation, trade, manufacture or undertaking of any kind, an adventure or concern in the nature of trade, for the purpose of creating a turnover" 2 . This standard has not changed in the proposed legislation, it is the same standard as in prior years.
t is also noteworthy that there is a specific exemption in the Bill for an investment fund regulated under the Investment Funds Act, 2019 (No. 2 of 2019) and the carrying out of activities as a pure equity holding entity3 . In other words, if you are not doing business in or from within The Bahamas, if you are an investment fund or a pure equity holding company, you do not require a business license and the Bill doesn't not apply to you at all.
If you are financialservices entity or an IBC and doing business in orfrom within The Bahamas, you are subject to businesslicense tax, albeit at a reduced rate compared to other businesses.
Footnotes
1. Business License Bill, 2023 section 9(1)
2. Business License Bill, 2023 section 2
3. Business License Bill, 2023 section 10(4)(c) and (d)
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