Investment Incentives – Bahamas Business Guide

Business Guide

The Bahamas has become a particularly favorable target for
international investment. It has established generous legal incentives
to attract foreign investors and has streamlined government bureaucracy
for expeditious project approval. The Bahamas possesses an outstanding
infrastructure for commercial and industrial activity, and offers a
highly-skilled workforce.

The professional community of accountants,
international bankers, trustees, and investment specialists is large,
diverse and highly skilled. There is also a full complement of
respected and experienced law firms. The climate for foreign investment
is particularly favourable to the finance industry, insurance,
manufacturing, shipping, import & export trade, and of course,
tourism development.


Freedom from Taxation

One of the most attractive elements of investing in The Bahamas is
the tax-free status accorded to income. There are no taxes levied on
capital gains, corporate earnings, personal income, sales, inheritance,
or dividends. This tax freedom is available to all resident
corporations, partnerships, individuals and trusts.



Economic and Monetary Stability

Investors are also attracted to the stability of the economy, which
is steadied by the solid value of the Bahamian dollar. This currency is
pegged to the US dollar on a 1:1 ratio. US dollars and Bahamian dollars
are used interchangeably throughout the island chain.



A Wealth of Investment Incentives

The inducement of a tax-free 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 business licenses and
real property taxes for up to 20 years.

The Hotels Encouragement Act exempts hotel developers from customs
duties on raw materials and equipment. Exemptions from real property
tax and licensing fees are also available.

The Industries Encouragement Act exempts exporters from import
duties on raw materials and equipment and business license fees. This
act is of particular benefit for manufacturers.

The Export Manufacturing Industries Encouragement Act provides an
approved manufacturer who intends to export or annually exports at
least 95% of the total approved products produced by the manufacturer
is afforded duty-free import of raw materials, equipment and building
supplies used in the manufacture of the product or facilities for the
same and duty-free export of those products.

The Bahamas Free Trade Zone Act

The Agricultural Manufactories Act provides subsidies to
agricultural businesses in the form of interest-free loans for the
purchase of supplies and exemption from duties on a wide range of
products, including building suppliers, processing materials and farm
trucks. It also provides exemption from export taxes.

Freeport on Grand Bahama Island gives businesses in the free
trade zone exemption from taxes on profits, capital gains, inheritance,
income, earnings, distributions, gifts, or on imported and exported
goods. In addition, import duties and taxes on real estate have been
waived through August 3, 2015.

The Tariff Act provides exemptions to approved manufacturers for
the import of capital equipment and raw material for garment
manufacturing, food processing, the production of handicraft and
souvenir items, and cottage industries.

The Spirit and Beer Manufacture Act provides duty-free import of raw material and equipment for spirits and beer manufacturers.



No Exchange Controls/Free Repatriation of Profits

In accordance with terms of the International Monetary Fund
Agreement, The Bahamas has no restriction on current account
transactions. Additionally, there are no restrictions on the free
repatriation of profits. Exchange control is administered by The
Central Bank. The Bank, however, delegates to its authorized dealers
the power to approve allocations of foreign exchange for certain



Accessible International Financing

The Bahamas is associated with several organizations that ease
access to financing and provide important safeguards for investors. The
US Government’s Overseas Private Investment Corporation (OPIC), for
example, makes direct financing and loan guarantees available to
foreign investors. The Multilateral Investment Guarantee Agency is a
World Bank unit and parent of the Multilateral Investment Guarantee
Convention, which provides protections similar to those of OPIC. The
Bahamas also recently agreed to become a party to the convention on the
settlement of investment disputes.



Facilitated Incorporation and Registration

The International Business Companies Act of 1989 and the Companies
Act of 1992 have made it easier than ever before to establish a
commercial presence in The Bahamas.



Flexible Immigration Policy

Necessary work permits for key personnel are readily granted.
Businesses requiring work permits for other than key personnel are
encouraged to advise The Bahamas Investment Authority of their needs at
an early stage in their discussions.

Accelerated consideration for annual or permanent residence is
given to major investors and to owners of residences valued in excess
of $500,000. All international persons owning residences in The Bahamas
are eligible to receive, upon application to the Director of
Immigration, a “Home Owners Card.” The card does not provide residency
status for tax purposes; however, it facilitates entry into The Bahamas
and entitled the owner, his/her spouse and minor children to enter and
remain in The Bahamas for the duration of the validity of the card.