The number of nominee trusts licensed in The Bahamas continues to climb, according to recent statistics released by The Central Bank of The Bahamas.

The number of such licensees has more than doubled over recent years, increasing from 56 in 2000 to 113 in 2009.

For the first six months of 2010 there were 125 licensed nominee trusts, representing 45 per cent of the total number of banks and trust companies licensed to conduct business in The Bahamas.

Twelve nominee trusts came on stream between January and June of this year, according to the Central Bank’s Quarterly Statistical Digest, published at the beginning of September.

A nominee trust obtains a restricted license from the Central Bank, which allows it to hold securities and others assets in the licensee’s name, in addition to holding corporate directors and officers posts on behalf of its parent company’s clients. No other trust business can be conducted.

The increase in the number of nominee trusts is due to the Central Bank’s revised policy, says Karen Rolle, the Central Bank’s supervisor in charge of the Authorization and Administration Unit, which processes all license application and change requests from banks and trust companies.

“When we revisited the policy in 2007, we extended the scope of activities to also allow licensees to set up a company that could also be used as a corporate director or officer,” Rolle explains. “For example, if a client wanted to set up an IBC [International Business Company] or some other type of company, rather than the bank using its own natural directors to serve as directors, it can use these corporate vehicles. It made it more efficient in the way companies were conducting business for their client.”

As Rolle points out, when a bank or trust makes an employee an officer in an IBC, if that employee subsequently leaves the company, his or her name would have to be detached from every company in which they served.

Although these nominee trust functions were being carried out prior to the Central Bank’s changes, there was no policy requirement in effect to legislate that they be licensed to conduct these activities, which are used primarily by offshore banks.

As of June 2010, there were a total of 280 banks and trust companies licensed in The Bahamas, up from 271 in 2008 and 272 in 2009.