Can a Bahamas IBC run a software business? Yes, it can, it’s one of the most efficient offshore structures available for software developers. With full tax exemption on foreign income, no public ownership disclosures, and broad international flexibility, the Bahamas International Business Company (IBC) remains a powerful tool for structuring a global tech business legally and efficiently.
This article explores the legality, tax treatment, structural advantages, and banking options available to software businesses using a Bahamas IBC in 2025.
Is It Legal for a Bahamas IBC to Operate a Software Business?
Yes—a Bahamas IBC can legally operate a software business, as long as its income is sourced from outside The Bahamas. This is clearly established in the Bahamas International Business Companies Act, 2000, which sets the parameters for what IBCs are permitted to do.
According to Section 3(1) of the Act:
“An international business company shall not carry on business with persons resident in The Bahamas.”
This means a Bahamas IBC cannot sell products or services to local residents or operate domestically. However, the law explicitly permits IBCs to do business internationally. In fact, the entire structure is designed to serve as a vehicle for cross-border commerce—including software development, licensing, and digital services.
Common global use cases include SaaS platforms, licensed software, custom application development, and digital marketplaces—so long as the customers, clients, or users are outside The Bahamas. Therefore, can a Bahamas IBC run an online software business? Yes, as long as it does so internationally.
Why Use a Bahamas IBC Instead of a Bahamas LLC?
Both the Bahamas IBC and the Bahamas LLC can be used for international business, but they are structured differently and serve different strategic goals—especially when it comes to tech.
Here’s a focused comparison tailored for software companies:
| Feature | Bahamas IBC | Bahamas LLC |
|---|---|---|
| Legal Structure | Share-based (corporation) | Member-managed (contract-based) |
| Best For | SaaS, licensing, global scale | Small teams, private consulting |
| Tax on Foreign Income | 0% | 0% |
| Public Disclosure | No | No |
| Global Recognition (for banks/partners) | Strong | Moderate |
| Suitable for Licensing Software/IP? | Yes | Limited legal clarity |
| Ongoing Maintenance | Moderate | Slightly lower |
In short, for scalable tech businesses—especially those involved in software licensing or international transactions—the IBC offers greater flexibility, legal clarity, and international acceptance than the LLC.
How a Bahamas IBC Treats Software Income
As long as the software business operates outside The Bahamas, all income is treated as foreign-sourced. That includes:
- Revenue from international clients
- Subscription-based SaaS payments
- Software licensing agreements with foreign entities
- Digital product sales to users in other countries
This foreign-sourced income is completely tax-free under Bahamian law. The company is also not required to file corporate tax returns, as long as it earns no domestic income.
So, can a Bahamas IBC run a software business that generates international revenue? Absolutely. And in doing so, it retains 100% of that income, with no local corporate taxes or reporting burdens.
Banking, Payment Processors, and Software Companies
While the Bahamas provides an excellent corporate structure, its local banks are generally not compatible with Stripe and other major fintech platforms. This presents a challenge for software founders who rely on global payment processors.
For Stripe, the answer is simple: Stripe does not support Bahamas-based entities. You cannot connect a Bahamas IBC directly to a Stripe account.
For PayPal, a Bahamas IBC may be able to open a business account, but PayPal typically requires a local Bahamian phone number and a supporting address for verification. OVZA provides clients with a verified Bahamas number as part of our PayPal setup support, making it possible to use PayPal with your IBC in many cases.
More importantly, for modern software businesses needing international access, OVZA helps open offshore e-bank accounts in jurisdictions such as Mauritius, Puerto Rico, Switzerland, or the UAE. These banks support:
- Multi-currency IBANs
- Wire transfers
- PayPal integrations
- Crypto-friendly operations
- Virtual debit cards
This allows your software business to fully function—accepting payments, paying developers, and managing operational expenses—without needing to rely on local Bahamian banks.
So when clients ask, can a Bahamas IBC run a software business and access modern banking?—the answer is yes, when paired with the right offshore banking solution.
Conclusion
Can a Bahamas IBC run a software business? Yes—legally, efficiently, and with full tax exemption on foreign-sourced income. The structure is ideal for SaaS companies, digital agencies, developers, and IP holders who operate internationally and want to reduce tax burden without compromising on legal compliance.
When properly structured for offshore use there are no local taxes on foreign income, no reporting requirements to the Bahamian government, and no need to disclose shareholders or directors publicly.
OVZA handles the full process—from registering your Bahamas IBC to setting up your offshore banking and payment infrastructure. We ensure your structure is clean, compliant, and ready to scale internationally.
Ready to structure your software business offshore the right way? Contact OVZA to get started today.
