The Bahamas is seizing the opportunity to become the “nearshore Delaware for corporate structuring and reorganization” with planned reforms to company legislation, Attorney General Ryan Pinder said yesterday.
These reforms involve the modernizing of some outdated laws that govern and regulate companies, including the 150-year-old Bankruptcy Act, 1870.
Pinder said the government intends to appoint a public/private sector project team to overhaul The Bahamas’ registered companies, insolvency, and bankruptcy legislative regimes.
“Due to the rapidly evolving domestic and international economic and financial services environments, there is a clear need to improve the current laws pertaining to the registration of companies, insolvency, and bankruptcy in The Bahamas,” Pinder said during his contribution to the 2022/2023 budget debate in the Senate yesterday.
“In this vein, the government of the Commonwealth of The Bahamas, led by the Office of the Attorney General, has set a goal to revise the relevant laws inclusive of the Companies Act, 1992; the International Business Companies Act, 2000 and related legislation and the Companies (Winding Up) (Amendment) Act, the International Business Companies (Winding Up) (Amendment) Act, the Companies Liquidation Rules, 2012, 2013 and the Bankruptcy Act, 1870. Yes, I said 1870.”
Pinder said terms of reference have already been finalized and the government is focused on carving out a new offering in the financial services sector.
“The goal now, is to ensure that these relevant new proposed laws remain current, modern, competitive and reflect international best practices generally. These reforms have the ability to materially change The Bahamas’ commercial offering internationally and provide another boost to our financial services and commercial structuring markets. We look to become the nearshore Delaware for corporate structuring and reorganization,” he said.
Along with reforming the companies regime, the government is aiming to establish an international arbitration center in The Bahamas. This has been a decades-long goal of successive governments given the valuation of alternative dispute resolution (ADR) activities, which can amount to billions in economic movement.
Earlier this week, Minister of Economic Affairs Michael Halkitis said significant progress has been made in making The Bahamas an arbitration center.
“The ADR Unit is in the process of appointing Bahamian members to the Permanent Court of Arbitration. The Alternative Dispute Resolution (ADR) Council has been reformed. It is hoped that through the ADR Council, The Bahamas can effectively promote itself as a leading jurisdiction for international arbitration and other ADR processes. The ADR Unit has already begun to seek external partners to develop a strategic plan with the assistance of established external arbitral institutions and/or ADR service providers to support the establishment of a center for international arbitration and ADR, as the natural next step once the legislative framework has been enacted,” he said.
“As for the relevant legislation, the International Commercial Arbitration Bill, 2021 was circulated in December 2021, with the international ADR community expressing anticipation at its enactment while suggesting it also include provisions for trusts arbitration, similar to existing provisions in The Trustee (Amendment) Act 2011. The aforesaid provisions will also be included in the amendments to the 2009 Arbitration Act, which will soon be known as the Domestic Arbitration Act.
“As to other legislation and policy initiatives, a compendium of draft bills that further support ADR in The Bahamas will be introduced shortly, including draft international and domestic mediation bills that will be consistent with the principles of the Singapore Convention on Mediation and the draft construction adjudication bill. After two decades, we are seeing real movement in alternative dispute resolution and are hopeful that businesses and people involved in disputes will soon have an international arbitration center in The Bahamas to address those disputes.”