Reprinted with permission of the Bahamas Financial Services Board (BFSB)

An exempted limited partnership (ELP) may be established by registration in The Bahamas under the Exempted Limited Partnership Act (The Act) which came into force in May, 1995.

The Act allows one or more partners to limit their liability (the limited partners) while the other partner or partners (the general partners) have unlimited liability for the debts of the partnership. The general partners run the partnership.

An ELP is required to have at least one general partner who (if an individual) is a local resident or (if a company) is incorporated or registered under a local act such as an International Business Company. It is also required to have a registered office in The Bahamas and to have the words limited partnership or the letters LP included in its name. The ELP is exempt for a 50-year period from all local taxation, business fees and stamp duties but it is required to pay an initial registration fee and an annual fee each subsequent year.

The partnership business may be conducted from within or outside The Bahamas. An ELP is not permitted to undertake business with the public in The Bahamas. This restriction does not extend to business with an IBC nor to business that is necessarily ancillary to an ELP’s business outside The Bahamas.

A principal use of an ELP may be to serve as an investment fund vehicle.

An ELP can be formed quickly and easily. The process involves filing a brief statement with the Registrar providing the partnership’s name, nature of business, period of duration, registered office address and the names and addresses of its general partners.