How to Register a Business in the US from Bahamas

Step 1: Benefits of starting your US business from Bahamas

Starting a US business from the Bahamas offers a multitude of compelling benefits, beginning with the favorable tax environment. The Bahamas is known for its attractive tax policies, including no corporate income tax, no capital gains tax, and no personal income tax. This means that businesses established in the Bahamas can operate with lower tax liabilities, maximizing profits and reinvestment capabilities. Additionally, the Bahamas’ network of tax treaties and agreements can help minimize tax obligations in the US and other jurisdictions, providing a strategically advantageous position for international business operations.

The Bahamas is also renowned for its robust financial services infrastructure. With a stable economy and a highly developed banking system, businesses can easily access a wide range of financial services and support necessary for their operations. Furthermore, the Bahamas offers streamlined company formation processes and business-friendly regulations, making it easier and faster to set up and maintain a business. The availability of a skilled workforce, coupled with the country’s strategic location close to the US, ensures that businesses can operate efficiently and thrive in a competitive global market.

Step 2: How to start your US business from Bahamas

The process of starting a US business from the Bahamas involves several important steps. First, you will need to determine the type of business entity that suits your needs, such as a corporation, limited liability company (LLC), or partnership. Each structure has different legal and tax implications. It is recommended to consult with legal and financial advisors who are familiar with US laws to help you make an informed decision.

Once you have chosen your business structure, you will need to register your business with the appropriate US state authorities. This process generally includes selecting a unique business name, filing the necessary formation documents, and paying the required fees. For example, to form an LLC, you would file Articles of Organization, whereas for a corporation, you would file Articles of Incorporation. Additionally, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS), which is essential for tax purposes and opening a US bank account.

It is also crucial to understand the compliance requirements that your business will face, including federal, state, and local regulations. This may include obtaining necessary permits and licenses, adhering to labor laws, and maintaining accurate financial records. Furthermore, since you are operating from the Bahamas, consider consulting with experts in international business to navigate any cross-border legal and tax issues effectively.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Bahamas

Understanding Compliance Requirements for Running a US Business in the Bahamas

Setting up and running a US business in the Bahamas presents a unique set of compliance requirements. It is imperative to understand these considerations to ensure a smooth and legally sound operation. Below we outline key aspects to consider:

1. Registration and Licensing

Any foreign business intending to operate in the Bahamas must register with the Registrar General's Department. This step ensures that your business is legally recognized in the country.

1. Submit necessary documentation, including proof of company formation in the US.
2. Pay applicable registration fees.
3. Obtain a Business License from the Business License Division.

2. Tax Compliance

The Bahamas has its own tax system, which differs significantly from that of the US. Understanding these differences is crucial.

• Value Added Tax (VAT): Ensure VAT registration if your turnover exceeds the threshold and comply with VAT return filings.
• Custom Duties: Be aware of import duties on goods brought into the Bahamas.
• Business License Fee: Annual fees based on turnover must be paid to maintain a valid business license.

3. Employment and Labor Laws

Hiring local or expatriate staff requires adherence to Bahamian labor laws.

• Obtain work permits for expatriate employees.
• Comply with minimum wage laws and employment benefits as stipulated by the Bahamas Ministry of Labour.
• Adhere to labor relations and dispute resolution mechanisms provided by Bahamian law.

4. Banking and Financial Regulations

To operate financially within the Bahamas, establishing a local bank account is advisable.

• Ensure all financial transactions comply with the Central Bank of the Bahamas regulations.
• Maintain accurate and detailed financial records for compliance and reporting purposes.

5. Intellectual Property Protection

Protecting intellectual property (IP) for your business in the Bahamas is crucial.

• Register trademarks, patents, and copyrights with the Bahamas Intellectual Property Office (BIPO).
• Monitor for potential IP infringements and take legal action if necessary.

6. Environmental and Operational Compliance

Certain industries, such as tourism and manufacturing, have specific environmental and operational regulations.

• Obtain necessary environmental permits and adhere to sustainability practices.
• Follow sector-specific operational guidelines to avoid legal penalties.

Working with local legal and business advisors can help ensure that you meet all compliance requirements effectively, allowing your US business to thrive in the Bahamas.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Bahamas

Tax Considerations for Running a US Business in The Bahamas

Establishing a business presence in The Bahamas can offer several advantages for US business owners, but understanding tax obligations is crucial for compliance and financial planning. Here are key considerations to keep in mind:

1. No Corporate Income Tax

One of the main attractions of The Bahamas for US businesses is the absence of corporate income tax. This means that companies operating in The Bahamas are not subject to the same corporate tax rates as in the United States, providing a significant cost advantage.

2. Value Added Tax (VAT)

The Bahamas imposes a Value Added Tax (VAT) on most goods and services. As a business owner, it is essential to understand the VAT registration requirements and ensure compliance with VAT filings and payments to avoid penalties.

• If your annual turnover exceeds a certain threshold, you must register for VAT.
• VAT rates can vary, so stay informed about current rates and any updates.

3. Import Duties

The Bahamas levies import duties on a wide range of goods. When importing products for your business, consider the following:

• Calculate the cost of import duties in your pricing strategy.
• Check the duty rates for specific categories of goods.
• Be aware of any exemptions or reductions that may apply.

4. Business License Fees

Operating a business in The Bahamas requires obtaining a business license, which comes with associated fees. The fees can vary based on the type and size of your business:

• Ensure timely payment of business license fees to avoid penalties.
• Keep records of your license and renew it as required.

5. Compliance with US Tax Obligations

Even though your business operates in The Bahamas, you must remain compliant with US tax obligations:

• Report foreign income and be aware of foreign tax credits.
• Understand the implications of the Foreign Account Tax Compliance Act (FATCA).
• Consult with a tax professional to navigate dual taxation issues.

6. Professional Advice

Navigating the tax landscape in a foreign country can be complex. Consult with local tax advisors and international tax experts to ensure full compliance and optimize your tax strategy:

• Seek advice on structuring your business for tax efficiency.
• Stay informed about changes in Bahamian tax regulations.

By understanding and addressing these tax considerations, US business owners can successfully manage their tax obligations while benefiting from the favorable business environment in The Bahamas.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country