Christopher Ansell June 2 2011 Business Licence Act 2010 takes effect Lennox Paton | Private Client & Offshore Services - Bahamas Christopher Ansell Private Client & Offshore Services Filing requirementsLicence feesThe Business Licence Act 2010 came into force on January 1 2011. It has introduced new licensing and taxation requirements to operate a business in the Bahamas. Licence fees have now changed and will be based on turnover. 'Turnover' is defined as the total revenue in money (or money's worth) accruing to a person for his or her own use and benefit from business activities within the Bahamas during the preceding year or any part thereof or in such other accounting period as allowed by the secretary (as defined in the act), including all cash, credit sales and commissions without any deductions. Existing businesses will be deemed licenced for a period of 90 days from the commencement date of the act. A new Business Licence Review Board has been established to hear appeals by persons aggrieved by the secretary's decisions regarding applications for business licences or approval of business names. Any person who attempts to evade payment of business licence fees, keeps false accounts or provides false information to the secretary may be liable for up to two years' imprisonment. Directors and officers of companies and partners may be liable for being knowingly involved in offences committed by their companies or partnerships. A foreign entity which contracts to carry out business must apply for a temporary licence and pay a fee of 1.5% of the value of the contract. The Liquor Licence Act has been repealed by the act and, accordingly, persons wishing to sell liquor must now apply for a licence in accordance with the procedure set out in the act. Filing requirementsThe filing requirements of the act are as follows: A business whose licence has expired shall be deemed licenced for 30 days from the date of expiry. In other words, all businesses must apply for and obtain a new licence before January 31 of each year. All businesses must submit financial results to the secretary before December 31 of each succeeding year in order to apply for a renewed licence. A business must maintain accounts and records of any transactions relating to the business for a period of five years from the date of the transaction. A business which does not exceed a turnover of $50,000 is not required to maintain accounts and records. The secretary may make an assessment of tax payable by an applicant for a licence within five years of the date on which the sum was tendered or, in the case of a temporary licence, within two weeks of completion of the project. Applicants for a business licence must submit information to the secretary on their proposed business name at the time their application is submitted. This application must include a declaration of beneficial ownership. Licence fees Business licence fees are now set at the following rates based on turnover unless otherwise stated: agriculture/fishing/farming; food/meat/fruit processing - 0.5%; accountants/doctors/attorneys/architects/engineers -1%; new business - $100; where turnover is more than $50,000 but less than $500,000 - 0.5%; where turnover is more than $500,000 - 0.75%; if the business is non-resident for exchange control purposes - $300; insurance companies registered under the Insurance Act - 3% of gross premiums per quarter to be paid four weeks prior to the end of the respective quarter; telecommunication companies - 3%; and banks and trust companies registered under the Bank and Trust Companies Regulations Act shall pay an annual fixed amount determined by the value of assets under management. For further information on this topic please contact Christopher Ansell at Lennox Paton by telephone (+1 242 502 5000), fax (+1 242 328 0566) or email ([email protected]).