THE BAHAMAS [TAXATION MOTIVATED TRUSTS]
Even today, we do not know in which of the 700 islands, that compose the Bahamas, Christopher Columbus set foot, the 14th October 1492. While we are sure about the early interest shown by pirates, especially between the late seventeenth and the beginning of the eighteenth century, until the British made it their colony (1718). The Bahamas were particularly popular (and exploited) during the American Civil War, as a basis for the transfer of ammunition and medicines, as well as during the years of American Prohibition as an almost unlimited supplier of rum, or during the World War II, when the British and the Americans, used its harbors to hunt German submarines.
After the war, it was the turn of tourists (tourism now accounts for over 40% of the country’s gross domestic product), drug traffickers, and in more recent times (but not too much), the “foreign financiers”. “The number of banks and trust companies licensed to operate within The Bahamas increased by 17 to 284 during 2003. The vast majority of them are branches, subsidiaries or affiliates of major banking institutions in North and South America and Western Europe”. The Trust law is governed by Chapter 179, 1989 (amended in 1996), while the Perpetuities Act (2004) increased its duration from 80 to 150 years.
Taxation: no tax is levied. Indeed, to quote the Trustee Act, 1998: Section 93. (1) “Notwithstanding any law to the contrary, no income tax, capital gains tax, estate tax, inheritance tax, succession tax, gift tax, rate, duty, levy or other charge is payable by any beneficiary who is treated as non-resident for Exchange Control purposes in respect of any distribution to him by the trustee of any trust”.
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