March 2020

Commercial Entities Substance Requirements Act, 2018

Economic substance reporting obligation

The Commercial Entities Substance Requirements Act, 2018 (“CESRA”) (as amended) requires all legal entities registered in The Bahamas to submit an annual filing to the Minister of Finance. This filing is a new requirement and is separate and apart from other filings made on the entity’s behalf to the Registrar General’s Department.

Failure to comply with the annual reporting requirement exposes an entity to fines and possible striking off.

Some entities which are engaged in certain types of business – “relevant activities” – are considered “included entities” and may be required to demonstrate economic presence in addition to complying with reporting obligations. “Relevant activities” are identified in part one of the linked declaration.

Passive holding companies and equity participation entities – known as “non-included entities” – also have an annual reporting requirement, albeit much less detailed than entities engaged in relevant activities.

While CESRA places the obligation to comply on the entity, rather than its registered agent or office, LPCS is pleased to extend our CESRA registration and reporting service to clients whose entities are classified as non-included entities under CESRA. The service includes securing an Entity Identification Number (EIN) on the entity’s behalf, as well as the completion and submission of the relevant form and declaration.

If you would like more information about electing our CESRA reporting service, or if you would like more information on services for included entities, please contact Lennox Paton Corporate Services today at lxp@lennoxpaton.com or LPCS@lennoxpaton.com.