Corporate services firm sees 40% jump in business filings under CESRA

A corporate services provider has reported a 40 percent client jump in clientele as a result of businesses needing to file under the Commercial Entities (Substance Requirements) Act, 2023 (CESRA). Peter Cartwright, managing director of PDC Corporate Services Limited – which provides company formation, management, accounting, and fiduciary services for businesses and individuals – told Guardian Business that his company had filed 150 companies under CESRA up to the deadline on September 30. He said this is a significant jump for a fledgling corporate services provider with less than five years in operation. CESRA was passed on January 1, 2019 and amended in 2023. It seeks to ensure that commercial entities that are resident in the Bahamas for tax purposes, and engaged in any of nine specified relevant activities, have adequate substance in the jurisdiction. Those activities are fund management, insurance, banking, distribution and service center, shipping, finance and leasing, intellectual property, representing themselves as a holding company, or having a headquarters in The Bahamas. “I think we have seen a 40 percent increase year-on-year,” Cartwright said, adding that he expects a further uptick in business as a result of CESRA. “For the most part, we do realize and recognize that The Bahamas is still one of those favorable jurisdictions for foreigners wanting to do business,” he said. “Early on, there was this resistance to all this change, because it felt like we can become a bit too over compliant. But as a result of this over compliance, or these new compliance measures, we’ve been able to get off those gray and black lists. It was really just a strength in our AML [anti-money laundering] procedures to comply with international best practices.” He continued: What we did this year was we sort of helped the clients out in a bit, where we pre-populated some of the declaration forms requiring signatures... We changed the strategy a lot this year, and we’ve seen the fruits of that labor.” He added: “I would say the lion’s share of our filings came in the ninth hour. And that’s not just the local companies, but the international companies as well. No matter how early you start the process, you will still get those clients that prefer to take it down to the wire. But thankfully, we didn’t have any issues with the systems. My team and I were working up until about eight o’clock last night. We got all the filings done. The portal was stable, so that helps a lot too.” Cartwright thanked the Office of the Attorney General for getting the country off of the Financial Action Task Force’s gray list, and making compliance with the CESRA possible. “We’re actively looking at the changes the government is making in the legislation to enhance and strengthen our AML procedures, and we want to make sure we are in a position where we comply and ensure that our clients comply with these new requirements.”