Bahamas wealth management: trusts, funds and private banks in Nassau

International private banks based in Nassau

Bahamas wealth management encompasses the services of Nassau's private banks, trust companies and licensed managers, which hold and manage international wealth in US dollars and other currencies under the supervision of the Central Bank and the Securities Commission. Several Swiss, Canadian and international banking groups run banks or trust companies there for private clients, mainly families from Latin America, North America and Europe with large and diversified assets.

Several Swiss, Canadian and international banking groups run banks or trust companies in Nassau dedicated to private clients. They mainly serve families from Latin America, North America and Europe with large and diversified assets.

Bahamas wealth management: trusts governed by Bahamian law

The 1998 Trustee Act governs Bahamian trusts, often administered by a trust company licensed by the Central Bank. A trust legally separates the settlor's assets and places them with a trustee responsible for managing them for the beneficiaries.

Foundations and private trust companies

The 2004 law allows the creation of a Bahamian foundation with legal personality, run by a council. Wealthy families also use private trust companies, which act as trustee for a single family with the support of a local registered agent.

Investment funds and the Securities Commission

The 2019 Investment Funds Act, supervised by the Securities Commission, provides notably for SMART funds aimed at sophisticated investors. They sometimes serve as a management vehicle for family wealth, with a licensed fund administrator and an annual audit.

Discretionary wealth management in the Bahamas, in US dollars

An international client's portfolio is usually managed in US dollars, the centre's working currency, with positions in euros or Swiss francs. The discretionary mandate sets out the investment universe, risk profile, reference currency and reporting frequency.

No public protection for foreign currency holdings

Deposit Insurance Corporation protection covers only Bahamian dollar deposits, capped at BSD 50,000. An international client's US dollar cash and securities therefore rely on the institution's strength and on asset segregation at the custodian.

A national bank rather than a private bank

Bank of The Bahamas is first and foremost a commercial bank serving the Bahamian economy and its residents. A foreign investor seeking international portfolio management will rather approach the specialist private banks and trust companies licensed by the Central Bank.

Source of wealth and enhanced due diligence

Nassau institutions require detailed documentation of the source of wealth and funds, such as a business sale, income or inheritance, along with evidence of tax compliance in the country of residence. Politically exposed persons face enhanced review and senior management approval.

CRS, FATCA and trust transparency

The Bahamas reports financial accounts under the CRS, including those of trusts and foundations, along with settlors and beneficiaries. A French resident declares accounts on form 3916 and any trust of which they are settlor or beneficiary under specific French obligations.

Fees and thresholds for a wealth relationship

Nassau private banks often set a high minimum in US dollars and charge for management, custody, transactions and administration of fiduciary structures. These trustee and registered agent fees come on top of portfolio management and should be set out in the contract.

Starting Bahamas wealth management: the steps

The first step is to define your wealth objective: capital preservation, family succession, international diversification or simple custody of securities. This objective determines the most suitable vehicle, whether a private bank account, a trust, a foundation or a fund. It is better to put it in writing before the first meeting with a Nassau bank. Bahamas wealth management is therefore prepared as a long-term project.

The second step is choosing a licensed counterpart. Nassau private banks and trust companies are supervised by the Central Bank, funds and intermediaries by the Securities Commission. Verify each institution's licence with the competent authority, then ask for its fee schedule, minimum amount and the terms of a management mandate before presenting your file.

The third step is building the file, then the bank's internal review. In practice, timing varies with the institution, the complexity of the structures and the quality of the evidence provided. A wealth relationship is never guaranteed in advance, and the bank may decline a client without having to justify its decision at length. Wealth management in the Bahamas rewards patience at this stage.

Source of wealth: documents for wealth management in the Bahamas

Nassau institutions require detailed documentation of the source of wealth and funds: a business sale, income, inheritance or capital gains. Prepare the deeds, contracts, statements and certificates that allow the path of the money to be reconstructed. A coherent story supported by dated documents is worth more than a long explanation with no evidence.

Add evidence of tax compliance in your country of residence, a certified passport, recent proof of address and bank or professional references. If a structure is planned, the bank also identifies the settlor, protector, beneficiaries and council members. Politically exposed persons face enhanced review approved by senior management, which lengthens processing.

If you plan a trust governed by the 1998 law or a foundation created under the 2004 law, discuss the structure with legal counsel before approaching the bank. The registered agent and the trustee will play a part in presenting the file. The clearer each role, the better the bank understands the set-up without multiplying follow-up requests.

Common mistakes in Bahamas wealth management and questions for the bank

A frequent mistake is to assume that public protection covers all assets. The Deposit Insurance Corporation covers only Bahamian dollar deposits, up to BSD 50,000. An international client's US dollar cash and securities depend on the strength of the institution and on asset segregation at the custodian.

Ask precise questions: minimum amount at opening, management, custody, transaction and structure administration fees, trustee and registered agent fees. These fees come on top of portfolio management and should appear in the contract. Also ask who holds the securities, how assets are segregated and how often you will receive reports. A private bank in Nassau should be able to detail each of these fees.

Finally, question the bank about the discretionary mandate: investment universe, risk profile, reference currency, reporting frequency and termination terms. A serious private bank in Nassau agrees to answer in writing and to leave time for comparison. Be wary of promises of returns, which never appear in a rigorous management contract.

Private bank, trust or foundation, and reporting duties

A national bank such as Bank of The Bahamas serves residents and the local economy first. For an international portfolio, specialist private banks and trust companies are more suitable. A trust legally separates the settlor's assets, while a foundation has legal personality and its own council. Each vehicle has its own costs and constraints. Wealth management in the Bahamas requires choosing the vehicle methodically.

The Bahamas reports financial accounts under the CRS, including those of trusts and foundations with settlors and beneficiaries, and applies FATCA. A French resident declares accounts on form 3916, and any trust of which they are settlor or beneficiary, under specific French obligations. Tax advice is therefore indispensable.

Finally, verify everything with official sources: the Central Bank, the Securities Commission and the tax administration of your country. This guide does not replace personalised advice, and no account opening or acceptance for wealth management in the Bahamas can be guaranteed in advance.