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Private trust companies and family office
Private trust companies and family office

Families need dynamic and professional advisors to help them manage their wealth. PTC and the Family Office structures can be used as vehicles to help families achieve their goals, while dealing with complex tax, legal and regulatory issues.

Published:
Date:
Updated:
Investor Resources
January 16, 2013
January 16, 2013

The Private Trust Company (PTC) is a company incorporated under the Laws of The Bahamas to provide trusteeship to a defined class of trusts.

The Central Bank acts as a regulator of the PTC. Legislative changes have exempted the PTC from certain licensing requirements. PTCs are governed by the Banks and Trust Companies Regulation (Amendment) Act, 2010 and Banks and Trust Companies (Private Trust Companies) Regulations, 2007.

PDFThis information has been updated. View/download the latest changes in the 2017 Investor’s Resource Guide.

Highlights and requirements of PTC
Incorporation:

  • A PTC can be incorporated under either the Companies Act, 1992 or the International Business Companies Act, 2000.
  • The Memorandum and Articles of Association must provide for the PTC to act as trustee only for a trust or trusts created by a designated person names in the prescribed designating instrument pursuant to the regulations.

Designated person:

  • Is an individual named in the designating instrument.
  • If more that one designated person is named, then each designated person must be a blood relative of or related by some other family relationship to the other designated person(s). Can be deceased and his trust established by testamentary disposition.

Designating instrument:

  • Names the designated person(s) and is kept at the office of the registered representative.

Form of acknowledgement is required whereby the prescribed settlor acknowledges awareness that PTCs do not require:

  • directors to possess expertise in trust administration
  • capital exceeding $5,000
  • a fidelity bond
  • an annual audit

Registered representative must:

  • be a separate legal entity
  • be either a licensee of The Central Bank of The Bahamas or a financial and corporate service provider approved by the Central Bank
  • be resident in The Bahamas
  • provide the services of a secretary, director, or Bahamas agent
  • ensure that the PTC is established for lawful purpose and that it operates as a PTC
  • have minimum share capital of $50,000
  • retain copies of certain documents in relation to the PTC
  • require verification and maintenance in The Bahamas of records relating to the identities of the following:
    1. settlor and any person providing funds or assets subject to trust(s) administered by the PTC
    2. designated person(s)
    3. protector of trust(s) of which the PTC is trustee
    4. any person with a vested interest under trust(s) of which the PTC is trustee.
  • report suspicious transactions to the Financial Intelligence Unit

Special director is:

  • a person (who need not necessarily be resident in The Bahamas) of good reputation who must possess at least five years of experience in a discipline relevant to trust administration (law, finance, commerce, investment management, or accountancy)

Distinguishing features of PTC:

  • PTCs are distinguished from public, restricted and nominee trust companies as they are unique vehicles operating under the regulatory regime prescribed in the 2007 Banks and Trust Companies (Private Trust Companies) Regulations.
  • They are restricted from carrying out any other business other than that of a trusteeship to a trust or group of trusts created by the designated person(s).
  • The PTC must not amend its Memorandum and Articles of Association of the company, is not allowed to solicit trust business and must comply with yearly compliance regulations and fees.
  • If the PTC fails to comply with directions from the Central Bank or engages in illegal conduct, the PTC or its registered representative will be liable to a fine up to $5,000 and can face an order form the Supreme.

Court compelling compliance or further sanctions. PTCs can transfer or dispose of their shares provided that the registered representative maintains a current share register of all its shareholders.

SIDEBAR
Family office
The family office helps families achieve their goals while dealing with regulations and complex issues of taxation, distribution planning and charitable giving. The trust is a tool used by the family office to facilitate the smooth transition from one generation to the next. Other essential services include: evaluating life insurance needs; active coordination of legal/tax/accounting matters of business interests; financial reporting and audits coordinating the purchase of non-financial assets; and corporate governance reporting.

Fantastic opportunities exist in the insurance business and The Bahamas has a legislative and regulatory infrastructure that supports the offshore and captive insurance sectors.

The Executive Entity (EE) is a legal entity registered under the Executive Entities Act, 2011 to perform executive functions–these are powers and duties of an executive administrative, supervisory, fiduciary and office holding nature.

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