Commercial Entities (Substance Requirements) Act, 2018

Закон о коммерческих предприятиях (требования по экономическому присутствию) на Багамских островах, 2018

Аннотация

A BILL FOR AN ACT TO PROVIDE FOR SUBSTANTIAL ECONOMIC PRESENCE AND ANNUAL REPORTING OF A COMMERCIAL ENTITY CARRYING ON RELEVANT ACTIVITIES IN THE BAHAMAS AND FOR CONNECTED PURPOSES
 
Enacted by the Parliament of the Bahamas
 
PART 1 – PRELIMINARY
 
1.Short title and commencement.

• (1) This Act may be cited as the Commercial Entities (Substance Requirements) Act, 2018.
• (2) This Act shall come into force on such date as the Minister  may appoint by Notice published in the Gazette.

2. Interpretation
In this Act –

• “Authority” – means the Minister of Finance as Competent Authority under the Automatic Exchange of Financial Account Information, Act, 2016 (№ 37 of 2016);
• “commercial entity” is an entity incorporated, registered or continued under the –
  • (a) Companies Act (Ch. 308); or
  • International Business Companies Act (Ch. 309), but does not include an entity under paragraphs (a) and (h) which –
    • (i) is resident owned The Bahamas; and
    • (ii) conducts its core income generating activities within The Bahamas;
• “fiscal year” means an annual accounting period with respect to which the included entity prepares its financial statements;
• “included entity”  means an entity which –
  • (a) is a commercial entity;
  • (b) is engaged in relevant activities;
  • (c) generates revenue  from relevant activities;
• “resident owned” means a commercial entity beneficially owned by a natural person treated as resident for exchange control purpose.

 
PART II – SUBSTANCE REQUIREMENTS
 
3. Requirements to meet substantial economic presence.

• (1) An included entity must have substantial economic presence in The Bahamas.
• (2) In order to satisfy the requirement under subsection (1),  an included entity shall satisfy the requirement of section 5 and 7.

4. Meaning of relevant activities.
For the purpose of this Act, a commercial entity is engaged in a relevant  activity if that entity carries out any of the following activities in or from within The Bahamas, namely –

• banking business;
• insurance business;
• fund management business;
• financing and leasing business;
• headquarters business;
• distribution and service centres business;
• shipping business;
• commercial use of intellectual property; or
• as a holding company engaged, or where one or more of its subsidiaries is engaged, in any of the activities listed under paragraphs (a) to (h) in or from within The Bahamas.

5. Meaning of core income generating activities.

• (1) An included entity carrying on relevant activities in The Bahamas must conduct core income generating activities in The Bahamas.
• (2) Core income generating activities of an included entity presupposes adequate –
  • (a) amounts of annual expenditure;
  • (b) levels of qualified full-time employees;
  • (c) physical offices;
  • (d) levels of board management and control,
  • within The Bahamas.
• (3) Where any part of the core income generating activities are outsourced in The Bahamas there must be adequate –
  • (a) amounts of annual operating expenditure;
  • (b) levels of qualified full-time employees; and
  • (c) physical offices,
  • within The Bahamas, and  the included entity must be able to monitor and control the carrying out of that activity by the other entity.
• (4) The core income generating activities referred to in subsection (2) may include, but are not limited to the following if carrying on the business of –
  • (a) banking –
    • (i) the raising of funds, managing risk including credit, currency and interest risk;
    • (ii)  taking hedging positions;
    • (iii) providing loans, credit or other financial services to customers;
    • (iv)  managing regulatory capital, and preparing regulatory reports and returns;
  • (b) insurance –
    • (i) the predicting and calculating of risk;
    • (ii) insuring or re-insuring against risk, and providing client services;
  • Fund management –
    • (i) the taking of decisions on the holding and selling of investments;
    • (ii) calculating risks and reserves;
    • (iii) taking decisions on currency or interests fluctuations and hedging positions; and
    • (iv) preparing relevant regulatory or other reports for government authorities and investors;

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