Economic Policy

The Government of the Commonwealth of The Bahamas is committed to building an economic environment in which free enterprise can flourish; where the Government assumes its proper role as regulator and facilitator of economic development; where the ideals of transparency, fair play and equality of treatment are paramount; and a policy that maintains a stable society in which all people are afforded the opportunity realize their maximum potential.

In this regard, the National Investment Policy is designed to support an investment friendly climate; guarantees the complementarity of Bahamian and overseas investments; fosters appropriate linkages with all sectors of the economy, in particular, the tourism and financial services sectors; encourages the exploitation of our natural resources in an environmentally sound and sustainable manner; provides for the maximum level of employment; guarantees an acceptable level of economic security and generally fosters the economic growth and development of The Bahamas.

The Investment Environment

To undergird the National Investment Policy the Government will provide:

1) A politically stable environment conducive to private investment

2) An atmosphere where investments are safe and the expropriation of investment capital is not a considered option

3) A legal environment based on a long tradition of parliamentary democracy, the rule of constitutional and statute laws and where security of life and personal property are guaranteed.

4) A stable macroeconomic environment bolstered by a prudent fiscal policy, a stable exchange rate, flexible exchange control rules and free trade

5) An environment in which freedom from Capital Gains, Inheritance, Withholding, Profit Remittance, Corporate, Royalties, Sales, Personal Income, Dividends, Payroll and Interest Taxes is ensured

6) Essential public services, an adequately equipped police constabulary, modern health and education facilities and other social services

7) Dependable public utilities; and

8) Essential public infrastructure such as roads, ports and airports.

International Financial Centre

The Government is committed to enhancing the image of The Bahamas as an international financial centre. To this end the Government will:

1) Maintain The Bahamas as a leading financial services centre

2) Ensure the operation of a clean financial centre with specific rules and regulation to prevent the laundering of criminally derived assets

3) Monitor all developments in the international financial markets and amend any rules, regulations or legislation that would preserve and enhance the competitiveness of the financial services sector of the Bahamian economy.

4) Support The Central Bank of The Bahamas in its commitment to bank supervision and promoting high standards of conduct and sound banking practices

5) Support the self regulatory measures of the Association of International Bank and Trust Companies (AIBT), particularly, the established code of conduct for bank and trust companies

6) Continue enforcement of our bank secrecy laws

Investment Incentives

Investment incentives under the following 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 twenty years:

The Hotels Encouragement Ac
The Industries Encouragement Act
The Export Manufacturing Industries Encouragement Act
The Bahamas Free Trade Zone Act
The Agricultural Manufactories Act
The Spirits and Beer Manufacture Act

Note: Custom duty exemptions do not apply to personal consumables.

Investors may acquire publicly owned lands for approved developments on concessionary terms; and
Acquire low cost space for lease for industrial enterprises. Government will provide special training and retraining for Bahamian workers to ensure the continuing availability of a highly skilled labour force.

Preferential Trade Incentives

Businesses located in The Bahamas may benefit from the following preferential trade arrangements:

1) The Lome Convention

2) General System of Preference (GSP)

3) Caribcan

4) Caribbean Basin Initiative.

Administration Of The Investment Policy

Executive Management of the Investment Policy is resident in the National Economic Council (NEC), headed by the Prime Minister and operational activities will be the responsibility of the Bahamas Investment Authority (BIA) or the Investor's "One-Stop-Shop."

Establishing A Business In The Bahamas

An international investor seeking to do business in The Bahamas should submit to BIA a project proposal, along with supporting documents. The proposal should provide the information indicated in BIA's Project Proposal Guidelines.

General

To ensure the maximum benefit to The Bahamas from the National Investment Policy, certain immigration provisions will apply:

1. Work Permits

Necessary work permits for key personnel will be granted. Businesses requiring permits for persons other than key personnel are encouraged to discuss these requests with the Bahamas Investment Authority in advance.

2. International Owners Of Second Homes

Overseas Investors may acquire residential properties in The Bahamas of up to five acres without prior Government approval. Such acquisitions are required to be registered in accordance with the International Persons Landholding Act. Second Home Owners are eligible for a Home Owners Residence Card, renewable annually. This card will:

facilitate entry into The Bahamas, and entitle the owner, his spouse and minor children to enter and remain in The Bahamas for the duration of the validity of the card. Application may be made to the Director of Immigration.

3. Annual Or Permanent Residence

Accelerated consideration of applications for annual or permanent residence will be given to:

major international investors; and
fit and proper owners of residences valued at $500,000 or more.

4. Areas Especially Targeted For Overseas Investors

Touristic Resorts
Upscale Condominium, Time Share and Second Home Development
International Business Centre
Marinas
Information and Data Processing Services
Assembly Industries
High-Tech Services
Ship Repair and other services
Light Manufacturing for export
Agro-Industries
Food Processing
Mariculture
Banking and other Financial Services
Captive Insurance
Aircraft Services
Pharmaceutical manufacture
Off-shore Medical Centres


N.B. This list is not exhaustive and investors interested in areas not included are encouraged to bring their interest to the attention of BIA. Please note that investments of less than $250,000 will not be considered.

5. Local Partners In Joint Ventures

International investors are encouraged to establish joint ventures with Bahamian partners. The choice of such Bahamian partners is in the absolute discretion of the investor.

6. Areas Reserved For Bahamians

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
Nightclubs and restaurants, except specialty, gourmet and ethnic restaurants, restaurants operating in a hotel, resort complex or tourist attraction
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, crustacea, mollusks and sponge-fishing operations
Auto and appliance service operations; and
Public transportation
International Investors may engage in the wholesale distribution of any product they produce locally.