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Where Investments Meet Incentives

INVESTING IN THE BAHAMAS

The Bahamas are rich in opportunities. It is known throughout the world that The Bahamas are respected for their strong banking and financial systems, stable government and economy, deep pool of skilled labor, and easy access to the key markets of the United States, Canada, and its bilateral relationship with the United Kingdom. Additionally, The Bahamas have sound and sustainable investment incentives, giving it a safe and well-regarded business climate.

English is the official language of the Bahamas.

The Government and legal system are based upon a parliamentary democracy. The government has remained stable because of its support of both domestic and private foreign investment and a business-friendly legal and regulatory environment. The National Investment Policy, enacted in 1994, eased the requirements and regulations for starting and operating a business. The fiscal policies have remained prudent, where foreign investors are free from onerous capital gains, inheritance, withholding, corporate,  sales, income, dividends, and other taxes. To enhance this strong financial base, The Bahamas periodically amends their laws and regulations to preserve their international financial competitiveness. 

To support this, The Bahamas has successfully built out dependable public utilities, roads, international and regional airports and ports, information technology and telecommunications, well-manned and equipped police and fire departments, health system, education facilities, social services. It maintains a modern and flexible work permit and immigration system.

The Bahamas are members of many international bodies and organizations:

  • The United Nations
  • World Bank
  • International Monetary Fund
  • Privacy Policy
  • International Maritime Organization
  • World Trade Organization

The Bahamas works diligently to ensure that it remains a leader in the financial markets by bank supervision and promoting ethical banking practices, preventing money-laundering, and supporting the self-regulatory frameworks of the Association of International Bank and Trust Companies, and supporting bank secrecy laws.

Simply put, The Bahamas are one of the safest places to invest in all of the Americas.

TYPES OF BAHAMAS INVESTMENTS

The Investment Funds Act of 2003 put The Bahamas at the forefront of investment fund administration. The Act recognises four classes of Funds:

  • Standard Fund—offerings to the general public. A highly regulated, modern investment vehicle. A traditional collective investment scheme.
  • Professional Fund—Designed for sophisticated investors and licensed by authorised administrators enabling faster launch time.
  • SMART Fund—Alternative regulatory test fund for innovatively structured investments.
  • Recognised Foreign Fund—Funds incorporated in a prescribed jurisdiction.

The Act allows local fund administrators to license professional and SMART investment funds independently of the regulator. New funds can be launched based on the review of an authorised administrator. It’s a great advantage for The Bahamas.

THE SMART® FUND
In 2003, The Bahamas created a new type of collective investment through the Investment Funds Act. The SMART© (Specific Mandate Alternative Regulatory Test) Fund provides a non-traditional private wealth management tool with flexibility. Its open-architecture allows professionals to design innovative structures without standard regulatory criteria. The SMART Fund is an innovative, progressive and flexible product designed to attract new business and re-organise existing business to better suit the needs of clients.

ICON
The new Bahamas Investment Condominium, for instance, is a structuring vehicle that can be licensed as a SMART Fund, Professional Fund or Standard Fund. Unlike a company, partnership, or trust, it’s a pooling mechanism and operating instrument —and The structure is licensed and regulated as an investment fund.

The Investment Funds Guide (below) provides details on the regulatory and business regime for the funds sector.

MORE INFORMATION ON THE BAHAMAS INVESTING ENVIRONMENT

The Bahamas Chamber of Commerce

The BCCEC is the pre-eminent business and employer organization in The Bahamas. As such they are involved in Government policy, regulations, and promoting a fair and competitive business environment.

2017 Bahamas Investor’s Resource Guide

This document by The Bahamas Investor offers an essential overview for setting up trusts, international business companies and other wealth management structures, plus information on working and living in The Bahamas.

The Bahamas Financial Services Board (BFSB)

The Bahamas Financial Services Board (BFSB) is an innovative commitment by the financial services industry and the Government of The Bahamas to promote a greater awareness of The Bahamas’ strengths as an international financial centre.

Bahamas Investment Fund Guide

The Bahamas Investment Fund

The Bahamas Investment Fund guide can give you the information you need to invest in The Bahamas. The Bahamas’ evolving investment funds sector is attracting the attention of fund managers and investors around the world. It has added a new dimension to the jurisdiction’s wealth management and advisory capability.

IMPORTANT BAHAMAS INVESTMENT ASSOCIATIONS

INVESTMENT INCENTIVES

As a nation dedicated to domestic and foreign investment opportunity, The Bahamas has created a number of incentives that are available to qualifying firms or individuals. These incentives were developed to promote investment opportunities and increase benefits to The Bahamas through a stable and growing business environment.

Benefits:

  • offer relief from customs duties on a wide array of raw material, building supplies and equipment
  • Create exemptions from real estate property taxes for up to twenty years.

Requirements:

All non-Bahamians, permanent residents or citizens seeking an investment incentive concession must submit a project proposal to the Bahamas Investment Authority.

Non-Bahamians must meet a minimum capital investment of BSD 500,000, and the proposed investment must not be in an area reserved for 100% Bahamian participation:

  • Wholesale and Retail Operations.
  • Commission agencies engaged in the import/export trade.
  • Real estate and domestic property management agencies.
  • Domestic newspapers and magazine publications.
  • Domestic advertising and public relations firms.
  • Security services.
  • Domestic distribution of building supplies.
  • Construction companies, except for special structures for which international expertise is required.
  • Personal cosmetic/beauty establishments.
  • Commercial fishing within the exclusive economic zone of The Bahamas.
  • Auto and appliance service operations.
  • Public transportation inclusive of locally solicited charter boat tours.
  • Landscaping.

Agricultural Manufactories Act

Benefits of this self-explanatory act include interest-free loans for supply purchases, exemptions from export taxes, and exemptions on duties on machinery, tools, fixtures and supplies used in processing agricultural, marine, floricultural and horticultural products, as well as materials for facility construction and equipment.

Bahamas Free Trade Zones Act

The Bahamas Free Trade Zones Act allows for free trade zones (both industrial and commercial) in The Bahamas.

Bahamas Vacation Plan and Time-Sharing Act

Provide for creation, regulation and management of timesharing and vacation projects for the protection of purchasers of such properties. It Includes customs duties exemptions on imports for construction.

Commercial Enterprises Bill

This bill went into effect in 2017 to ease doing business in The Bahamas, therefore increasing investment and job opportunities by simplifying and expediting work permit applications by foreign persons in specific industries:

  • Captive insurance
  • Reinsurance
  • Mutual fund administration
  • Arbitration
  • Wealth management
  • International trade
  • International arbitrage
  • Computer programming
  • Software design and writing
  • Bioinformatics and analytics
  • Maritime trade
  • Nanotechnology
  • Biomedical industries
  • Boutique health facilities
  • Data storage or warehousing
  • Aviation maintenance
  • Aviation registration
  • Call centers
  • Manufacturing or assembly of manufactures

City of Nassau Revitalization Act

Grants exemptions and financial incentives to those engaged in restoration, repair and upgrade of commercial and residential buildings in the City of Nassau.

The Act lapsed in June 2018, but has been amended in the past and may be amended in the future to extend its benefits.

Export Manufacturing Industries
Encouragement Act

Encourages and promotes establishing and developing export manufacturing industries. It includes exemptions to duties on import of machinery and raw materials and exemption from real property tax for twenty-five years.

Family Islands Development
Encouragement Act

Grants import concessions to encourage development on certain family islands. It Includes customs duties exemptions on imports for construction only and on imports of land clearing equipment.

The Act lapsed in June 2018, but has been amended in the past and may be amended in the future to extend its benefits.

Hawksbill Creek Agreement Act

To promote Grand Bahama Island as an international business and shipping hub, a deep-water harbor and economic zone was established. This economic zone is 230 miles with Freeport at its economic center. The Act created a trade and tourism powerhouse through its infrastructure, tax concessions, and accessibility by large ships and aircraft.

Hotels Encouragement Act

The Hotels Encouragement Act promotes construction of hotels and resorts through the refund of duties and emergency taxes and duty free import of  construction supplies and raw materials. Hotels are exempt from real property tax for ten years and a reduced rate for 30 years.

Industries Encouragement Act

The Industries Encouragement Act promotes manufacturing and construction via duty free import of  building supplies, raw materials, and machinery. The benefit is for five years and they pay reduced duties afterwards. Certain companies are exempt from real property tax for fifteen years.

International Persons Landholding Act

Facilitates the holding of land by non-Bahamians and companies. This act created the issuance of a annual residence card and eliminated the need for a permit to purchase certain properties.

Investment Incentives Act

The Bahamas’ Investment Authority (BIA) duties are defined in the Investment Incentives Act. They approve development applications.

Spirits and Beer Manufacture Act

Going against their pirate past, the Spirits and Beer Manufacture Act made illegal the distilling of spirits or brewing of beer without a license. It also allows the duty free import of raw materials and equipment used in the manufacture of such products.

Tariff Act

The Tariff Act exempts specific industries from duties on certain  supplies, raw materials, and equipment. They include agriculture, fishing, garment manufacturing, production of handicrafts, cottage industries and printing. Some businesses are exempt from property tax for twenty years.