Five myths about offshore companies
Published 15 October 2026 · 3 min read
Offshore companies are legal, widely used and far more regulated than their reputation suggests. Most of the myths come from rules that changed years ago: today owners are identified, financial information is shared between countries, and tax is still due where the owners live.
Myth 1: “Offshore companies are illegal”
Owning a company in another country is legal almost everywhere. Businesses use offshore companies to hold international investments, run cross-border trade, bring together owners from different countries, or plan family succession. What can be illegal is hiding the company or its income from your own tax authority. Declare it, and it is simply a company.
Myth 2: “Offshore means anonymous”
Not any more. In The Bahamas, every company’s registered agent must identify the people who own or control 10% or more of it, and record them in a secure government database. Banks carry out their own checks on the same people. The Bahamas also exchanges financial account information with other countries under the OECD’s Common Reporting Standard. The ownership is private from the public, but not from regulators.
Myth 3: “You pay no tax at all”
The Bahamas has no corporate income tax, but that is not the same as paying nothing:
- Most companies pay an annual business licence tax. For an International Business Company earning abroad, this starts at $2,500.
- VAT of 10% applies to most goods and services bought in The Bahamas.
- Your home country may tax you on the company’s profits, especially if you control it or run it from home.
The benefit is a simple, predictable regime, not an exemption from every tax.
Myth 4: “Offshore companies are only for the very wealthy”
Government fees for a small Bahamas IBC start at a few hundred dollars to incorporate and a few thousand a year to maintain, once the business licence tax and registered agent fees are included. That puts it within reach of founders, consultants and family businesses, not just large fortunes. Whether it is worth it depends on what the company will do.
Myth 5: “The Bahamas is blacklisted”
It was, briefly, and it is not now. The Bahamas left the FATF list of jurisdictions under increased monitoring in December 2020. The European Union added it to its list of non-cooperative tax jurisdictions in October 2022 and removed it in February 2024. As of 2026, it is on neither list.
FAQ
Will my bank or accountant ask about an offshore company? Probably, and that is normal. Keep your company documents, ownership details and a short explanation of what the company does ready.
Does an offshore company protect me from lawsuits? A company separates business liabilities from personal ones, wherever it is formed. It does not shield you from obligations you already owe, and courts can look through structures set up to avoid them.
What is the most common mistake? Setting up a company first and asking tax questions later. Get advice in your home country before you incorporate.
Want a straight answer about your situation? Ask Corallium.
This article is general information, not legal, tax or immigration advice. Rules and fees change; confirm current requirements with a licensed professional before acting.