Establishing a Securities Firm in Bahamas in 2024
As one of the world’s developing international financial centers, the Bahamas is considered a premier financial hub in the Caribbean. Its financial services sector is mature, with a wide range of services including banking, investment funds, and insurance. The region is home to several global banks and financial institutions, offering an ecosystem conducive to securities firms. This is due to the leading regulator, demonstrating excellence and expertise in the industry, the Securities Commission of The Bahamas (SCB). Its mission is to protect investors and consumers, promoting sound regulatory practices in the financial services industry that facilitate sustainable growth and contribute to economic development.
In this article, the SALVUS Investment Firms Licensing team delves into the benefits of obtaining a Securities Firm License in The Bahamas and the different categories of licenses available, expanding on the below::
1. Why obtain a Securities Firm License in The Bahamas?
2. License Categories & Authorised Activities
3. Regulatory Capital Requirements
4. Licensing Timeframe
5. How SALVUS can support your licensing application
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1. Why obtain a Securities Firm License in the Bahamas?
Establishing a securities firm in the Bahamas under SCB can offer several advantages, especially given the country’s standing in the financial and fintech world. The Bahamas has made significant strides in embracing fintech. It was one of the first countries to launch a Central Bank Digital Currency (CBDC) known as the ‘Sand Dollar’. This showcases its forward-thinking approach toward financial innovation and digital finance.
One of the primary reasons financial and fintech companies choose the Bahamas is its favorable tax regime. The Bahamas has no corporate income tax, capital gains tax, or withholding tax, making it an appealing location for international securities firms aiming to minimize tax liabilities while maximizing profits.
The SCB offers a well-established, modern and transparent regulatory environment designed to protect investors and maintain market integrity. It is responsible for overseeing securities activities, ensuring compliance with international standards, securing an expanding securities market.
2. License Categories & Authorised Activities
Securities firms can adopt various business models, shaped by the diverse range of activities and services they offer, depending on their business strategy and objectives. These firms are classified into four categories:
- Dealing in Securities
- Managing Securities
- Advising on Securities
- Arranging deals in securities
The table below outlines the specific authorised activities available under each category:
| License Category | Authorised Activities |
|---|---|
| Dealing in securities | This includes: (i) buying, selling, subscribing for or underwriting securities as an agent, (ii) buying, selling, subscribing for or underwriting securities as principal where the person entering into that transaction: (a) holds himself out as willing as principal, to buy, sell or subscribe for securities of the kind to which the transaction relates at prices determined by him generally and continuously rather than in respect of each particular transaction, (b) holds himself out as engaging in the business of underwriting securities of the kind to which the transaction relates or, (c) regularly solicits members of the public with the purpose of inducing them, as principals or agents, to buy, sell, subscribe for or underwrite securities and such transaction is entered into as a result of such person having solicited members of the public in that manner |
| Arranging deals in securities | Making arrangements with a view to: (i) another person (whether as a principal or an agent) buying, selling, subscribing for or underwriting securities or (ii) a person, who participates in the arrangements, buying, selling, subscribing for or underwriting securities. |
| Managing securities | Managing securities belonging to another in circumstances involving the exercise of discretion. |
| Advising on securities | Advising a person on securities if the advice is: (i) given to the person in his capacity as an investor or in his capacity as agent for an investor or potential investor and (ii) advice on the merits of his doing any of the following (whether as principal or agent): (a) buying, selling, subscribing for or underwriting a particular security or (b) exercising any right conferred by a security or buy, sell, subscribe for or underwrite a security |
Contact us at info@salvusfunds.com if you are interested in establishing a Securities Firm in The Bahamas; our Investment Firms Licensing team is ready to answer your questions.
3. Regulatory Capital
A securities firm is required to always maintain financial resources to:
- meet its business commitments,
- withstand the risks to which its business is subject, and
- meet the prescribed requirements.
Maintaining adequate financial resources is heavily dependent on the business model employed by each firm and the different activities for which the firm is authorized to engage in.
4. Licensing Timeframe
Typically, the completion of the application process is estimated to be between 3 to 4 months. However, this duration depends on the completeness and quality of the information provided, as well as the applicant’s ability to present a well-defined business plan.
5. How SALVUS can support your licensing application
Our Investment Firms Licensing team at SALVUS specializes in tailoring the licensing process to meet the unique needs of each client’s business model. Leveraging our in-depth expertise, we begin by understanding your strategic goals to advise you on the most appropriate license type for your operations.
We work closely with our client’s team to collect all relevant data and ensure that the application complies fully with regulatory requirements. Acting as a liaison between your company and the regulatory body, we simplify the application process, ensuring smooth and timely progress from start to finish.
Contact us at info@salvusfunds.com if you are interested in establishing a Securities Firm in The Bahamas; our Investment Firms Licensing team is ready to answer your questions.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.
