Your Business In The Bahamas
The country’s mature financial services industry, established infrastructure, progressive government, tax neutral environment and luxury lifestyle all have been cultivated very carefully to position it as a centre for international business.
The Commonwealth of The Bahamas is an archipelago spanning 100,000 square-miles extending southeast from Florida in the United States of America to northern Hispaniola. The Bahamas has an estimated land area of 5,400 square miles made up of some 700 islands and 2,400 cays.
The climate of The Bahamas is generally mild which has given rise to The Bahamas being sometimes referred to as the Isles of June. Winter temperatures are rarely below 60°. Summer night temperatures may fall to 78° and summer daytime temperatures seldom climb beyond 90°. Humidity in the summer months may be considered fairly high with rainy months being May-October when records show an average of 6 ins. a month.
Physical Development – Infrastructure
The Bahamas has a relatively extensive network of modern roads allowing ease of travel through the major population centres and linking residential and business centres on the less developed islands. The island of New Providence has a privately operated bus system to meet tourist and residential transportation needs. Private and public business as well as residential building projects having mushroomed during the past decade, are constructed in accordance with high quality stringent building controls that in many instances surpass North American building code requirements. More than 60 airports of various dimensions are located throughout the archipelago; the largest being the Lynden Pindling International Airport in the Island of New Providence and Grand Bahama International on the Island of Grand Bahama.
Public Services and Utilities
The Bahamas Electricity Corporation, a government owned corporation, generates electricity in New Providence and the Family of Islands. Potable water is supplied by the Water and Sewerage Corporation, another government owned corporation. Private corporations supply electricity and water to the residents of Freeport/Lucaya on the Island of Grand Bahama. Telecommunications services are provided by the privatised Bahamas Telecommunications Company (BTC).
Structures For Doing Business
A wide range of options is available when selecting a structure for doing business in The Bahamas. Certain types of investment may require the use of a particular vehicle as in the case of bank formation or insurance business, which require a corporate structure. In the case of corporate structures company names must be approved by the Registrar of Companies. Other business names must be registered with the Registrar General’s Department under the Business Names Act. This process involves submitting the prescribed form with the required fee of $50.00 and securing a certificate from the office of the Registrar General. A business name may be approved within 24 hours. Government will not seek to participate in the ownership or operation of an investor’s company and the investor’s potential liability to third parties or other investors will be determined by agreement between the parties. There are no restrictions on capitalization and there are no investor tax consequences.
Structures for doing business include Sole Proprietorships Limited Liability Companies, Companies Under The Companies Act 1992, Companies Under The International Business Companies Act, Unlimited Liability Companies Unlimited liability, Segregated Account Companies, Joint Ventures, General Partnership, Limited Liability Partnership, Undisclosed Partnerships, and Subsidiaries/Branches /Representative Offices.
Bahamas Investment Authority
The government’s proactive economic growth and development policies are guided by the Bahamas Investment Authority (BIA), which was established to reduce bureaucratic delays for domestic and international investors. Operating from the Office of the Prime Minister, the BIA has been designated a “one-stop shop” designed to simplify investing in The Bahamas. The BIA serves as the administrative arm of the National Economic Council (NEC) and the Investments Board.
Foreign Investors seeking to establish a business in The Bahamas must submit to the BIA a project proposal with supporting documents. The proposal ultimately will be considered by NEC, an agency headed by The Prime Minister and that is responsible for the executive management of the National Investment Policy. The NEC effectively is the decision making body in respect of all commercial projects undertaken by foreign direct investors.
After approval by the NEC of a proposed investment project, and following on the establishment of the desired structure for conduct of the intended business, the investor must make application to the Ministry of Finance [Business Licence Unit] for a business licence.
Areas Reserved for Bahamians
The following business areas/sectors have been reserved for Bahamian Nationals only:
- 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.
- Shallow water scale-fish, crustacean, mollusks and sponge-fishing operations.
- Auto and appliance service operations.
- Public transportation inclusive of locally solicited charter boat tours.
**International Investors may engage in the wholesale distribution of any product they produce locally.
Areas Targeted for International Investors
- Touristic Resorts.
- Upscale Condominium, Time share and Second Home Development.
- Information and Data Processing Services.
- Assembly Industries.
- High-Tech Services.
- Ship Repair and other services.
- Light Manufacturing for export.
- Food Processing.
- Banking and other Financial Services.
- Captive Insurance.
- Aircraft Services.
- Pharmaceutical manufacture.
- Off-shore Medical Centres.
NB. This list is not exhaustive and investors interested in areas not included here are encouraged to bring their interest to the attention of the BIA.
Click here for a list of the Industry Regulators relevant to the financial services industry, and from whom relevant approvals are necessary for all regulated businesses – banks and insurance companies, securities and investment funds, insurance, etc.
Freeport, Grand Bahama Island
The Island of Grand Bahama, one of the Islands of The Bahamas, comprises a land area of 530 square miles. Freeport is the capital city of the Island of Grand Bahama and it is approximately 150 miles off the coast of Florida. Under the Hawksbill Creek, Grand Bahama (Deep Water Harbour and Industrial Area) Act of 1955 and the amendments thereto (the Hawksbill Creek Agreement) the Grand Bahama Port Authority Limited (the Port Authority), a private company, acquired from the government of The Bahamas and private owners some 149,000 acres in Freeport (the Port Area). In order to encourage the development of this land, the government granted to the Port Authority and its licencees certain concessions which included exemption from customs duties on manufacturing supplies and other consumable stores as defined in the Hawksbill Creek Agreement, personal income taxes, corporate profit taxes, capital gains taxes or levies on capital appreciation, real property and inventory taxes. The customs duty exemption expires in 2054 and in 1993 the other exemptions were extended until August 2015. Goods for personal use or consumption are dutiable.
Investors wishing to conduct business in the Port Area are required to become licencees of the Port Authority. The licensing procedure is straightforward and transparent. An annual licence fee is payable to the Port Authority by all licencees.
Establishing a Business
Most investors find it prudent to engage local counsel to assist in the process of establishing the structure of an intended business and making the applications to the relevant government departments for necessary permits and approvals. Fees for services rendered may vary depending on the complexity of the proposal. Certain applications may require the services of a single attorney. Other applications may require a team of attorneys each with a particular professional emphasis.