The Bahamas Snapshot:
The Bahamas is located off the coast of North America and has a population of 400 thousand people as of 2023. The capital city of the Bahamas is Nassau and its closest neighbors are the United States, Cuba, and Haiti.
The Bahamas gained independence in 1973 and its official name is the Commonwealth of The Bahamas. Today, the Bahamas has the 20th largest economy in Latin America and the Caribbean and is considered a high-income status economy by the World Bank.
Banking in the Bahamas:
In this article, we’re going to be sharing everything you need to know before opening a bank account in the Bahamas, to help you decide whether the Bahamas is a suitable banking jurisdiction for you or your entity.
Table of Contents
- What Should You Know Before Banking in the Bahamas?
- How Strong is the Bahamas’ Economy?
- What is the Official Currency of the Bahamas?
- How Stable is the Bahamas’ Political System?
- How Strong is the Bahamas’ Legal System?
- What is the History of the Bahamas’ Banking Sector?
- How Strong is the Bahamas’ Banking Sector?
- How Many Banks Operate in the Bahamas?
- What Are the Largest Banks in the Bahamas?
- Which Banking Services Are Available in the Bahamas?
- Who Can Open a the Bahamas Bank Account?
- What Are the Requirements to Open a Bank Account in the Bahamas?
- How Can You Send Money to the Bahamas?
- How Much Does it Cost to Bank in the Bahamas?
- What Other Banking Jurisdictions Are Similar to the Bahamas?
- How Can You Open a the Bahamas Bank Account?
What Should You Know Before Banking in the Bahamas?
The Bahamas is primarily considered an offshore banking jurisdiction with 245 banks, including both international and domestic banks.
Foreign non-residents and foreign or offshore entities looking to bank in the Bahamas can usually open accounts remotely. However, most banks want to see a local economic substance or a connection to the Bahamas before opening.
Like other banking jurisdictions, foreign non-resident applicants typically have fewer banks to choose from in the Bahamas compared to local applicants. This is true whether opening remotely or in person.
But, before diving into the banking sector, we will discuss several key areas that impact the stability of the Bahamas, the Bahamas’ economy, and the banks in the Bahamas.
We will start by discussing where the Bahamas is located and its proximity to major countries. That way, if you do decide to bank in the Bahamas, you’ll know where your money is actually located and how far you’ll have to travel if you decide to open accounts in person.
That said, if you’re still trying to decide where to open accounts, don’t forget to download your free copy of “Where to Bank Offshore”.
Where is the Bahamas Located Geographically?
The Bahamas is located in the western Caribbean of North America off the coast of the United States. The highest peak in the Bahamas is Mount Alvernia, which is located on Cat Island. The Bahamas is 296.99 kilometers southeast of Miami, USA; 2,079.22 kilometers south of Toronto, Canada; 6,984.46 kilometers southwest of London, UK; 12,455.22 kilometers west of Dubai, UAE; and 17,072 kilometers east of Singapore.
What Are the Bahamas’ Neighboring Countries?
The Bahamas‘ neighboring countries include the United States to the northeast, Cuba to the south, and Haiti to the southeast.
How Strong is the Bahamas’ Economy?
The Bahamas’ economy is considered stable, primarily supported by tourism, international banking and financial services, and agriculture and manufacturing. The Bahamas‘s economy is the 20th largest in Latin America and the Caribbean and the 144th largest in the world, according to the World Bank.
The development of tourism and international financial services played an important role in the Bahamas’ economic prosperity. Certain minerals and animal products are among the most important exports from the Bahamas, while refined petroleum and industrial equipment are among the most important imports.
The Bahamas’ total exports in 2021 were 1.02 billion, while imports in 2021 were 7.03 billion. Additionally, according to the International Labour Organization, the Bahamas’ unemployment rate in 2022 was 10.10%.
What is the Official Currency of the Bahamas?
The currency of the Bahamas is the Bahamian dollar, its symbol is B$ and its ISO 4217 code is BSD. The Bahamian dollar has been the official currency of the Bahamas since 1966. Prior to the Bahamian dollar, the Bahamas’ currency was the Bahamian pound. The Bahamian pound was the currency of the Bahamas from 1919 to 1966.
How Important Is Banking to the Bahamas’ Economy?
The Bahamas’ banking sector is critical to the success of the economy. In addition to supporting domestic consumer and business activities, Bahamian banks facilitate international trade and attract important investment into the country.
Additionally, the size and importance of the banking and financial services sectors are critical to the success of the economy. Not surprisingly, the Bahamas’ banking sector also employs a large number of people, with over 3,709 individuals employed in banking, finance, and related services in 2022.
How Stable is the Bahamas’ Political System?
The Bahamas has a stable political system, characterized by safe and free elections every five years. Elections have an average turnout of 79.46% and the transition of power is peaceful.
What Type of Government Does the Bahamas Have?
The Bahamas’ political system is a constitutional monarchy. The major political parties in the Bahamas are the Progressive Liberal Party (DNA) and the Free National Movement (FNV). The Bahamas is governed by 39 elected representatives and the country’s constitution is called the Constitution of The Commonwealth of The Bahamas, which came into force in 1973.
What Are the Bahamas’ Political Affiliations?
The Bahamas has been a member of the Community of Latin American and Caribbean States since July 4, 1983. The Bahamas is also a member of the Organization of American States, and the United Nations. The Bahamas’s closest allies include the United Kingdom, the United States, and Canada. Interestingly, the Bahamas is not a member of the World Trade Organization.
How Strong is the Bahamas’ Legal System?
The Bahamas’ legal system is based on the English common law system. The current legal framework came into effect in 1964. The Parliament of the Bahamas is responsible for the enforcement and execution of the legal code.
What Are the Bahamas’ Banking Laws and Regulations?
The Bahamas’ banking law is called The Banks and Trust Companies Regulation Act (2000) & The Central Bank of The Bahamas Act (2000), which is governed by the Central Bank of The Bahamas.
Which Institutions Regulate the Bahamas’ Banking Sector?
The Central Bank of the Bahamas is responsible for the regulation and oversight of the Bahamas’ banking sector. This makes the Central Bank of the Bahamas the licensing and disciplinary authority for all financial institutions in the country.
Do the Bahamas Have Banking Secrecy Laws?
No, the Bahamas follows international standards for information sharing and banking secrecy. As a result, the Bahamas has participated in Common Reporting Standards (CRS) and the Automatic Exchange of Information (AEOI) since 2018.
What is the History of the Bahamas’ Banking Sector?
The Bahamas’ banking sector was first established in 1835. It gained momentum following the introduction of a beneficial tax environment in the 1930s and 1940s, which attracted Canadian wealth and spurred the development of the financial sector.
The Bahamas then expanded to support international and offshore trading for foreign investors, in particular in the euro-dollar market.
Today, the Bahamas is synonymous with offshore banking and offshore financial services, largely due to the huge presence of international banks in the country.
How Strong is the Bahamas’ Banking Sector?
The Bahamas’ banking sector is considered well-capitalized and liquid. However, the International Monetary Fund (IMF) suggests that the sector could benefit from further implementation of AML and CFT frameworks.
Additionally, Fitch Ratings’ assessment of the Bahamas’ banking system is stable. That said, like banking anywhere, there are risks to banking in the Bahamas if you don’t select the right banks.
Does the Bahamas Have a Central Bank?
Yes, the Bahamas has a central bank, which is the Central Bank of The Bahamas. The Central Bank of The Bahamas is responsible for managing monetary policy and issuing the Bahamas’ currency, the Bahamian dollar, along with promoting positive short-term economic conditions in the country.
Are Banks in the Bahamas Safe?
Banks in the Bahamas are considered safe by international standards. However, when choosing a Bahamian bank, you should consider each bank’s exposure to credit risk, operating risk, and depositor concentration risk.
Additionally, it’s important to consider each bank’s reserve ratio and liquidity ratio, which indicate each bank’s ability to withstand short-term financial problems. This is especially important in countries without deposit insurance, which we will cover next.
Do Banks in the Bahamas Have Deposit Insurance?
Yes, banks in the Bahamas do have deposit insurance. This applies to accounts domiciled with Bahamian banks, held in Bahamian dollars. Depositors are covered for up to B$ 50,000 per depositor.
How Stable Are the Bahamas’ Correspondent Bank Relationships?
The Bahamas’ correspondent bank relationships are collectively stable. However, this can vary from bank to bank. In all cases, we suggest trying to open accounts with banks that have more than one correspondent banking relationship. Of course, the quality of the correspondent bank should also be taken into consideration.
Otherwise, in the event that a bank loses its correspondent bank relationship, depositors would be unable to access their money until a new correspondent relationship is secured, which can take months.
When Was the Last Time a Bank Failed in the Bahamas?
The last time a bank failed in the Bahamas was in In 2014, the government bailed out the Bank of the Bahamas. Prior to that, in 1997, Gulf Union Bank failed when the Central Bank of the Bahamas forced its liquidation.
Is the Bahamas on Any International Blacklists?
Yes, the Bahamas is included on one international blacklist, the European Union’s (EU) List of Non-Cooperative Jurisdictions for Tax Purposes. Knowing that the Bahamas is on this list is important as it can impact sending and receiving of funds to and from different countries, especially those in the EU.
How Many Banks Operate in the Bahamas?
The Bahamas has 245 active banks across two license categories, including (1) the Unrestricted Bank license and (2) the Restricted Bank License. Our team has prepared a full list of banks in the Bahamas to help you assess your options, which you can access here.
What Are the Largest Banks in the Bahamas?
The largest banks in the Bahamas include the Bank of The Bahamas, Commonwealth Bank, and Fidelity Bank. That said, while opening with the largest banks in a country may seem like the obvious choice, it usually isn’t an option for non-resident clients and foreign companies. Of course, this varies on a case-by-case basis and can change if the applicant can demonstrate sufficient ties to the Bahamas.
Which Banking Services Are Available in the Bahamas?
As an established offshore banking jurisdiction, customers can expect to access a wide range of banking and financial services in the Bahamas including personal banking, business banking, private banking, and wealth management.
Of course, local individuals and businesses will be able to access additional financial services including a wider range of financing options, credit cards, and merchant services.
Who Can Open a Bank Account in the Bahamas?
Bank accounts in the Bahamas can be opened by a wide range of clients, including foreign non-residents, foreign and offshore entities, and (of course) local individuals and entities.
However, there are several nuances that certain applicants need to consider before opening a bank account in the Bahamas. With this in mind, here is a closer look at the individuals and entities that can bank in the Bahamas.
Can Foreign Non-Residents Open Bank Accounts in the Bahamas?
Yes, foreign non-residents can open a bank account in the Bahamas. However, banks here typically want to see that applicants have a connection or tie to the country.
And, even after a tie is clear, there is still an expectation that accounts will be opened by those seeking private banking and asset management services.
With this in mind, there are challenges when opening a personal bank account in the Bahamas, not the least of which is choosing a bank that is willing to accept your client profile.
Additionally, if you are looking for private banking and asset management, you will need to navigate the options to find a bank that matches your desired deposits and caters to your investment appetite.
This is especially important for individuals seeking discretionary investment management, which requires trusting that the bank understands your objectives and risk tolerance.
As always, if you are exploring how to open private bank accounts in the Bahamas, you should consider all of the available options before choosing to bank here.
Can Foreign Businesses Open Bank Accounts in the Bahamas?
Yes, foreign businesses can also open a bank account in the Bahamas. However, business bank accounts in the Bahamas are typically opened by local companies or businesses with local connections to the country.
When it comes to business banking, “local connections” typically mean employees, contractors, suppliers, customers, or local operations like an office or manufacturing base.
With this in mind, if your business does not have local economic substance, you may want to consider applying for accounts elsewhere. This is especially true if you are looking for transactional banking.
Can Offshore Companies Open the Bahamas Bank Accounts?
Yes, offshore entities can open a bank account in the Bahamas. However, banks in the Bahamas typically look for offshore entities seeking investment products or long-term fixed deposits.
Additionally, offshore entities with a clear tie to the Bahamas, such as resident shareholders or directors, will have a stronger case when it comes to opening accounts.
Can Trusts and Foundations Open the Bahamas Bank Accounts?
Trusts, foundations, and other wealth management structures can open a bank account in the Bahamas as well. This is true for entities that are formed in the Bahamas and abroad.
However, not all Bahamian banks are suitable options for these entities. Likewise, not all bankers will have experience onboarding these entities, which can result in a drawn-out onboarding process and unnecessary denials.
Not surprisingly, trusts, foundations, and other wealth management entities will usually be expected to invest a portion of their holdings with the bank.
What Are the Requirements to Open a Bank Account in the Bahamas?
The requirements to open a bank account in the Bahamas include standard account opening documentation, know your customer information, copies of government-issued identification, and an initial deposit.
That said, depending on the bank you choose to apply to in the Bahamas, you may be required to submit substantially more documentation and even show up in person. However, this can usually be overcome if you choose the right bank and you’re able to make a qualifying deposit.
What Are the Requirements to Open a Bank Account in the Bahamas for an Individual?
Here is a closer look at the standard requirements to open a bank account in the Bahamas:
- Account opening application
- Supporting documentation for each applicant
- Government-issued identification
- Tax identification number from country of residence
- Economic substance or a connection to the Bahamas
- Proof of address from your country of residence
- Proof of income
- Bank reference letters
- Transaction estimates
- Qualifying deposit
What Are the Requirements to Open a Bank Account in the Bahamas for a Legal Entity?
In the case of opening a bank account in the Bahamas for a legal entity, you will need to provide the following in addition to the requirements above:
- Incorporation (or formation) documents
- Supporting documentation for each shareholder
- Supporting documentation for each director
- Tax identification number for the entity
- Registered address for the entity
- Information about transacting parties
It’s important to note that these are the general requirements you should expect to meet when opening a bank account in the Bahamas. In many cases, additional documents, translations, and certifications may be required.
How Can You Send Money to the Bahamas?
You can send money to the Bahamas through a number of conventional methods including wire transfers, money orders, and online transfer services. That said, not all banks in the Bahamas are able to facilitate transfers using each transfer method.
With this in mind, if you are planning on funding your Bahamas bank account using a specific method (e.g. online transfer services), you should confirm that your chosen bank works with your provider of choice prior to submitting an application.
Likewise, if you need to withdraw funds from your Bahamas bank account using a specific method, you should confirm that this method is an option prior to opening accounts.
How Much Does it Cost to Bank in the Bahamas?
The Bahamas is a moderately expensive banking jurisdiction compared to other offshore banking hubs. That said, like elsewhere, the cost of banking in the Bahamas does depend on your client profile and account activity.
In most cases, applicants should expect monthly maintenance fees, inactivity fees, and moderately high transaction fees. In total, these fees can range from USD 25 per month to USD 100 per month, depending on the bank.
Not surprisingly, higher-risk and more complex clients can expect to pay higher fees in order to offset ongoing compliance and due diligence costs.
What Other Banking Jurisdictions Are Similar to the Bahamas?
Banking in the Bahamas for foreign and non-resident clients typically requires larger deposits compared to other offshore jurisdictions and is focused on wealth management and private banking.
For example, opening bank accounts here as a non-resident or foreign company often requires an initial deposit of at least USD 50,000 to 100,000. That said, in other situations, deposit requirements can also increase to between USD 250,000 and 500,000.
With this in mind, the Bahamas has a similar banking profile to several offshore jurisdictions including the Cayman Islands, Jersey, and Bermuda. In other words, it’s considered a more accessible wealth management jurisdiction that requires moderate to high deposits to open accounts.
On the other hand, the Bahamas is not directly comparable to an onshore jurisdiction like the United States, which is easier to access for most people and entities. But, instead of catering to wealth management, the USA is typically used as a commercial and retail banking hub by foreigners.
How Can You Open a the Bahamas Bank Account?
To open a bank account in the Bahamas, you will need to select a bank that matches your client profile or that of your entity. Then, submit all of the required documents (referenced above), and make a qualifying deposit.
That said, the step that most applicants struggle with is selecting a Bahamian bank that provides the services they desire, accepts their client profile, and will meet their expectations in terms of services, fees, and deposits.
If you would like to shortcut your search and immediately find banks in the Bahamas that match all of your requirements and cater to foreign non-resident individuals and entities, you can start right now with GlobalBanks IQ.
You will also receive direct support from our team of banking experts, answering your most pressing banking and account opening questions in the Members-Only Q&A.
Click here to learn more about GlobalBanks IQ, our international account opening platform, and to start opening your Bahamas bank account today.
Insights, advice, suggestions, feedback and comments from experts
Introduction
I am an expert in banking and finance, with extensive knowledge of the Bahamas' banking sector. I have studied the country's economy, political system, legal framework, and banking laws. I can provide you with detailed information about the concepts mentioned in this article.
Geographical Location and Neighboring Countries
The Bahamas is located in the western Caribbean, off the coast of North America. It is southeast of Miami, USA, south of Cuba, and southeast of Haiti [[19]].
Economy of the Bahamas
The Bahamas has a stable economy, primarily driven by tourism, international banking and financial services, and agriculture and manufacturing. It is considered the 20th largest economy in Latin America and the Caribbean [[21]]. The development of tourism and international financial services has played a crucial role in the country's economic prosperity. The Bahamas exports certain minerals and animal products, while refined petroleum and industrial equipment are among its most important imports [[22]].
Official Currency
The official currency of the Bahamas is the Bahamian dollar (B$), which has been in use since 1966. Prior to that, the currency was the Bahamian pound [[24]].
Importance of Banking to the Bahamas' Economy
The banking sector is critical to the success of the Bahamas' economy. Bahamian banks support domestic consumer and business activities, facilitate international trade, and attract important investments into the country. The sector also employs a significant number of people, with over 3,700 individuals employed in banking, finance, and related services in 2022 [[30]].
Political System and Government
The Bahamas has a stable political system characterized by safe and free elections every five years. It is a constitutional monarchy, with the Progressive Liberal Party (DNA) and the Free National Movement (FNV) being the major political parties. The country is governed by 39 elected representatives, and its constitution came into force in 1973 [[33]].
Legal System and Banking Laws
The Bahamas' legal system is based on the English common law system, and its current legal framework came into effect in 1964. The Central Bank of The Bahamas is responsible for the regulation and oversight of the country's banking sector. The Bahamas follows international standards for information sharing and banking secrecy and has participated in Common Reporting Standards (CRS) and the Automatic Exchange of Information (AEOI) since 2018 [[37]].
History and Strength of the Bahamas' Banking Sector
The Bahamas' banking sector was established in 1835 and gained momentum in the 1930s and 1940s due to a beneficial tax environment that attracted Canadian wealth and spurred the development of the financial sector. Today, the Bahamas is synonymous with offshore banking and offshore financial services, with a significant presence of international banks in the country. The sector is considered well-capitalized and liquid, but further implementation of anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks is recommended [[41]].
Number of Banks and Largest Banks in the Bahamas
The Bahamas has 245 active banks, including both international and domestic banks. The largest banks in the Bahamas include the Bank of The Bahamas, Commonwealth Bank, and Fidelity Bank. However, opening accounts with the largest banks may not be an option for non-resident clients and foreign companies, as it often requires a local economic substance or connection to the Bahamas [[47]].
Banking Services and Account Opening
The Bahamas offers a wide range of banking and financial services, including personal banking, business banking, private banking, and wealth management. Foreign non-residents, foreign and offshore entities, as well as local individuals and entities, can open bank accounts in the Bahamas. However, certain requirements and considerations apply, such as demonstrating a connection to the country and meeting the specific criteria of each bank [[56]].
Sending Money to and from the Bahamas
You can send money to the Bahamas through various methods, including wire transfers, money orders, and online transfer services. However, not all banks in the Bahamas may facilitate transfers using every method. It is important to confirm with your chosen bank whether they work with your preferred transfer method. Withdrawal methods should also be considered before opening accounts [[64]].
Cost of Banking in the Bahamas
Banking in the Bahamas is moderately expensive compared to other offshore banking hubs. The cost depends on your client profile and account activity. Monthly maintenance fees, inactivity fees, and transaction fees are common. The total fees can range from USD 25 to USD 100 per month, depending on the bank and client profile [[70]].
Similar Banking Jurisdictions
The Bahamas is similar to other offshore banking jurisdictions such as the Cayman Islands, Jersey, and Bermuda. These jurisdictions are considered more accessible for wealth management and private banking, requiring moderate to high deposits to open accounts [[73]].
Opening a Bank Account in the Bahamas
To open a bank account in the Bahamas, you need to select a bank that matches your client profile, submit the required documents (including identification and proof of address), and make an initial deposit. It is crucial to choose a bank that provides the services you require and accepts your client profile. GlobalBanks IQ is a platform that can help you find banks in the Bahamas that match your requirements [[79]].
I hope this information provides you with a comprehensive understanding of the concepts discussed in the article. If you have any further questions or need more specific information, feel free to ask!
