Bahamas Business Incubation

Business incubation is the process of fostering a new start up so that it has the best chances of success and it is relevant to international tax planning since the more established a business is the better able it can defend itself against attacks from onshore tax authorities based on lack of substance. For more information about business incubation in general and what measures can be used to ensure a substantial local presence see our main article in the products section. Business incubation in the Bahamas is problematic since there will be a strong assumption that any company in an offshore centre is largely insubstantial (compared with onshore centres like the UK or Malta). This immediately places offshore companies at a disadvantage and means that claims of substantial local operations will require more effort. There is also the added concern that local presence in offshore centres will create a local tax liability (since the tax system is often set up only to benefit non-residents). By comparison in onshore centres the level of local presence does not generally affect taxation.