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Investing in The Bahamas

Legislation makes it safe for foreigners

Investing in The Bahamas
Legislation makes it safe for foreigners


Investing in The Bahamas makes a lot of sense. It’s easier than you may think, and there is a long list of benefits.

First off, the Bahamian government collects no taxes on sales, profits, capital gains, personal income, inheritances, dividends or the earnings of resident partnerships, trusts or corporations.

Also, investors here operate in a country with a stable economy, despite turbulence in many other markets. The Bahamian dollar trades on par with the US dollar within the country.

The Bahamas is a peaceful and stable democracy with proximity to major North American and Latin American markets.

As well, the Bahamian government is investor friendly, with a body of legislation that protects and makes it easy for foreigners to establish a presence here.

Investment policy
In 1994, the government introduced a National Investment Policy to foster economic growth, further development and support an investment-friendly climate. The policy includes commitments to maintain:
• A politically and economically stable environment conducive to private investment;

• an atmosphere of safety where expropriation of investment capital is never considered;

• a legal environment based on constitutional and statute law, where security of life and personal property are protected;

• clear and transparent investment incentives;

• timely amendment and/or enactment of new legislation, as required;

• reliable public services, including modern utilities such as water, electricity and communications; and

• an educational system designed to meet the needs of foreign and domestic investors.

Legislated incentives
Various pieces of legislation offer relief from customs duties on many goods, as well as exemptions from real property taxes and business licenses. These incentives are written into several pieces of legislation, as follows:

• Export Manufacturing Industries Encouragement Act, Agricultural Manufacturers Act, and Spirits and Beer Manufacture Act–offers exemptions on building materials, equipment, and approved raw materials and real property taxes for up to 20 years.

• Tariff Act–allows customs duty exemptions on specified equipment, supplies and raw materials for agriculture, fisheries, floriculture, horticulture, forestry, commercial printing, and cottage and light industries.

• Industries Encouragement Act–provides duty-free concessions to import raw materials, machinery and building supplies for manufacturing, along with an exemption from real property tax for 15 years.

• Bahamas Vacation Plan and Time Sharing Act–provides duty-free concessions for building materials to construct timeshare facilities.

• Hotels Encouragement Act–approved construction materials, fixtures and furnishings from hotel development are duty free and exempt from real property tax for the first 20 years operating a hotel/resort.

• City of Nassau Revitalization Act–provides incentives and duty concessions in connection with repair, restoration and upgrade of commercial and residential buildings in the City of Nassau.

• Hawksbill Creek Agreement Act–allows the free trade zone (Port Area) of Freeport, Grand Bahama, tax freedom until 2015 and exemptions from stamp duties, excise taxes and most customs duties until 2054.

• Free Trade Zone Act– designates areas in The Bahamas as free commercial and industrial zones.

• Family Island Development Encouragement Act–concessions are provided on imports of equipment, building materials and supplies for commercial or residential developments on specified Family Islands.

Investors welcome
Certain investment areas are specifically targeted for foreign investors and joint ventures, although adding Bahamian partners is strongly encouraged. These areas include: agro-industries; aircraft services; assembly industries; banking and other financial services; captive insurance; food processing; high-tech services; information/data processing; light manufacturing for export; mariculture; marinas; offshore medical centres; pharmaceutical manufacture; ship registration, repair and other ship services; touristic resorts and upscale condominium, timeshare and second-home development.

International investors can also engage in wholesale distribution, provided the product is produced locally.

Areas for Bahamians
International investment is encouraged, but there are several areas reserved soley for domestic investors.

These include auto and appliance service operations; commission agencies engaged in the import/export trade; construction companies, except for structures in which specialized international expertise is required; cosmetic and beauty establishments; distribution of building supplies; domestic advertising and public relations firms; domestic newspapers and magazines; nightclubs and restaurants, except ethnic, gourmet and specialty restaurants, and restaurants operating in a hotel, resort or tourist attraction: public transportation; real estate and domestic property management agencies; security services; shallow-water scale fish, crustacea, mollusc and sponge-fishing operations; wholesale and retail operations.

For further information about investing in The Bahamas, contact the Bahamas Investment Authority, tel (242) 327-5826, e-mail bia@bahamas.gov.bs or visit www.bahamas.gov.bs/bia.

Another resource is The Bahamas Investor magazine, available online at www.thebahamasinvestor.com.

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