General Business Information
The designation of “Bahamas” can refer to either the country or the larger island chain that it shares with the Turks and Caicos Islands. [Source: Wikipedia]
Since attaining independence from the UK in 1973, The Bahamas has prospered through tourism, international banking, and investment management. Because of its geography, the country is a major transshipment point for illegal drugs, particularly shipments to the US and Europe, and its territory is used for smuggling illegal migrants into the US.
The Bahamas is one of the wealthiest Caribbean countries. Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago’s labor force. Financial services constitute the second-most important sector of the Bahamian economy and, when combined with business services, account for about 36% of GDP. Manufacturing and agriculture combined contribute less than a 10th of GDP and show little growth, despite government incentives aimed at those sectors. The economy of The Bahamas shrank at an average pace of 0.8% annually between 2007 and 2011, and tourism, financial services, and construction – pillars of the national economy – remained weak. These challenges, coupled with a growing public debt, high government expenditures and unemployment, a narrow revenue base, and heavy dependence on customs and property taxes have led to prospects of limited growth for The Bahamas. [Source: The World Factbook]
|Time zone||EST (GMT-5)|
|Area||180,00 sq. mi. (ocean), 5,358 sq. mi. (land)|
|Climate||Tropical savannah climate, warm and winterless; daily mean avg. temp is 76⁰ F; 25⁰ C|
|Currency||Bahamian Dollar (official) and US Dollar|
|Government||Constitutional parliamentary democracy of the British Commonwealth|
|GDP per capita||$32,000 as of 2013|
|Main trading partners||US, India, Singapore, Dominican Republic. Ecuador, Canada|
|Weights and measures||Metric|
|International dialing code||+242|
|Internet domain suffix||.bs|
|Quality of life||Tropical savannah climate; daily mean avg. temp is 76⁰ F; 25⁰ C|
|Doing Business rating||84 (of 167)|
Market Entry Strategy
The Commonwealth of The Bahamas welcomes International Investors who wish to establish a business in The Bahamas. All non-Bahamians or Permanent Residents seeking to do business in The Bahamas must submit a Project Proposal to the Bahamas Investment Authority (BIA).
Additionally, from time to time the Government of the Bahamas offers targeted investment incentives for particular types of projects. All non-Bahamians, Permanent Residents or Citizens seeking to access concession pursuant to the Government’s targeted investment incentive must also submit a Project Proposal to the Bahamas Investment Authority (BIA).
There are no requirements for Bahamians to qualify for this service. Non-Bahamians must meet a minimum capital investment of BS$500,000 and the proposed investment must not be in an area reserved for 100% Bahamian participation. [Source: Bahamas Investment Authority]
Establishing a Business
- Submit a Project Proposal*, along with supporting documents to the Bahamas Investment Authority.
- Supporting documents
- Copies of Passport
- Bank reference
- Character reference
- Police record
- Copy of application for Crown Land (if applicable)
- Environmental Impact Assessment
- Proof of financial capability
- Supporting documents
- The BIA will process the application and submit the same to the National Economic Council for a determination.
- Depending on the nature of the proposed business activity, the relevant Government Ministry or Agency would be consulted for input:
- Ministry of the Environment.
- Ministry of Works and Transport.
- Ministry of Housing.
- Respective Family Island Local Government.
- Once a determination has been made, the BIA will communicate to the applicant in writing.
- Once approval is obtained, the BIA also coordinates with other Government agencies and facilitates the implementation of projects.
*Project Proposal Guidelines
|NAME||Please give us the name of the applicant, whether corporate or personal. For a corporate entity, it could be a proposed or reserved name.|
|ADDRESS||Please include telephone and/or fax.|
|DESCRIPTION OF PROPOSAL||Please provide a comprehensive executive summary of the project.|
|PRINCIPALS||Please list all of the principals in the venture (major beneficial owners), along with identifying particulars such as place and date of birth and passport or social security number for each one.|
|PROPOSED LOCATION||It is important to state where in The Bahamas the project will be located.|
|LAND REQUIREMENTS||If a request is being made for publicly owned land, please state the acreage and location. Applicants who wish to acquire privately held land must also apply for a permit to do so.|
|PROPOSED START-UP DATE||Please indicate the maximum time for the commencement, and if possible, completion of the project.|
|MANAGEMENT/PERSONNEL REQUIREMENTS||Please state the number of work permits that may be required for key personnel, for administration and financial management.|
|CAPITAL INVESTMENT||Please indicate the total capital investment to be made in the project, and provide a breakdown of the items involved and an estimate for start-up costs. Note: Minimum capital investment of B$250,000 for foreign investors.|
|EMPLOYMENT PROJECTION||Please indicate the number of Bahamians to be employed in construction and/or operation of the project in the first year.|
|FINANCIAL ARRANGEMENTS||Please provide proof of financial capability, that is, a letter of credit from a financial institution or a net worth statement for each principal or verification of deposit of funds in a Bahamian bank.|
|ENVIRONMENTAL IMPACT||Please indicate any possible harmful environmental effects and list the mitigating measures that would be employed to deal with them.|
|ECONOMIC IMPACT and BUSINESS PLAN||Please indicate potential benefit to the national economy, including NIB revenues, utilities, and possible entrepreneurial spin-offs.|
[Source: Bahamas Investment Authority]
The attractiveness of a low-tax environment and a stable currency are enhanced by a series of investment incentives that provide relief from customs duties on approved raw materials, equipment and building supplies, as well as allowing exemptions from real property taxes for up to 20 years.
The following incentives are open to any qualifying individual or firm:
The Hotels Encouragement Act — Provides duty free entry of approved construction materials, furnishings and fixtures for hotel development as well as provides for exemption/concession from real property tax for the first twenty years of operation of a hotel/resort.
Hotels with as few as four guest rooms on a Family Island and those with a minimum of ten rooms in New Providence qualify for concessions under the Hotels Encouragement Act.
The act has been amended to also include shops and restaurants, which have a touristic component, and entertainment facilities.
The Industries Encouragement Act — Provides duty-free concessions for the importation of machinery, raw materials and building supplies for manufacturing entities in addition to exemption from Real Property Tax for a 15 year period.
Duty free concessions for applicants is valid for the first five years of operation. Thereafter, applicants would be required to pay a reduced rate of duty (10%) on all approved materials and equipment imported.
The Bahamas Vacation Plan and Time Sharing Act — Provides duty-free concessions for building supplies for the construction of timeshare facilities.
The Free Trade Zones Act — Designates areas within The Bahamas as free industrial and commercial zones.
The Hawksbill Creek Agreement Act — Allows the Port Area that is the free trade zone of Freeport, Grand Bahama, freedom from all taxes until 2015 and from excise taxes, stamp duties and most customs duties until 2054.
The Tariff Act — Allows for customs duty exemption on specified raw materials, supplies and equipment for Agriculture, Floriculture, Horticulture, Fisheries, Forestry, Cottage and Light Industries, and Commercial Printing.
The Export Manufacturing Industries, Encouragement Act, The Agricultural Manufactories Act, The Spirits and Beer Manufacture Act — Investment incentives under these acts include exemption from the payment of customs duties on building materials, equipment and approved raw materials and real property taxes for periods up to 20 years.
The City of Nassau Revitalization Act — Provides incentives and duty concessions in connection with the restoration, repair and upgrade of buildings, commercial and residential, in the City of Nassau.
The Family Island Development Encouragement Act — Provides duty concessions on the importation of building materials, equipment and supplies for commercial and/or residential developments on specified Family Islands. [Source: Bahamas Investment Authority]
American Corporate Services offers experience and expertise for astute investors who wish to establish offshore businesses. Whether an investor wishes to immigrate or simply to establish a business entity, our network of professionals has the ability to advise, assist, direct and enable clients to understand and navigate the process for Bahamas company formation.
Our services include everything you need for starting a new business in the Bahamas. In addition to helping to establish a Bahamas business bank account, helping you set up your business to conform to Bahamas accounting standards and to comply with Bahamas taxes, we also offer boutique amenities such as Bahamas secretarial services. We can even help you to create a Bahamas virtual office that will appear to others as though you are actually in the Bahamas, even though you may be just about anywhere else on the globe at the time. Our business is making your investment a success.