Foreign Direct Investment (FDI) plays a critical role in economic growth and development, therefore The Bahamas Government encourages an investor friendly environment. It is confident that the country offers a very good climate for business and investment because of the unique characteristics for business investment, growth and evolution. Some of the more compelling reasons to invest in The Bahamas are as follows:

• It is a tax neutral jurisdiction. The country’s tax free status on income affords a significant advantage. Capital gains, corporate earnings, personal income, sales, inheritance or dividends are tax exempt – a freedom that extends to all resident corporations, partnerships, individuals and trusts.

• The country has a stable currency. The Bahamian currency, is on par with the U.S. dollar, and is recognized for its steady performance and unwavering value. This stability anchors the Bahamian economy and creates a viable investment foundation.

• The Government promotes and implements proactive policies. There are initiatives in place to ensure The Bahamas retains its existing investment advantages and harvests its growing investment potential. For example, a flexible immigration policy enables a seamless and effective process for granting work permits to key personnel.

• There is ‘pro-business’ legislation also in place to provide incentives for investors which extend the benefits of tax freedom to provide relief from customs duties on approved raw materials, equipment and building supplies, as well as exemptions from real property taxes for up to 20 years.

• The Bahamas has always been a very good market for second- homes and villa ownership (including time-share and fractional ownership), and the government continues to promote the destination and encourage investors in this market.

The Gross Domestic Product (GDP) is driven by tourism accounting for 50 per cent, and financial services which is approximately 20 percent, and the balance is spread among retail and wholesale trade, fishing, light manufacturing and agriculture.

As a tax neutral country on income, The Bahamas derives its revenue from customs duties, departure tax, excise taxes, gaming taxes, property taxes and stamp duties and Valued Added Tax (VAT). While tourism and financial services provide the country with a strong economic backbone, new investment opportunities are now unfolding in several areas such as e-business, manufacturing, light industry, land development and transshipment.

Other advantages contributing to The Bahamas as an attractive destination for investment:

• The Bahamas is one of the oldest democracies in the Western Hemisphere, with a parliamentary system dating back to 1829.

• It has a bicameral legislature that enacts laws under a Constitution which was adopted when The Bahamas became an independent country in 1973. The national government is stable and mature, with an international reputation for sound governance, transparency and accountability. The House of Assembly performs most legislative functions, with members elected by the population to five-year terms.

• The legal system is based on English common law. The judiciary is an independent branch of government. The Bahamas is governed by Rule of Law, and has a stable police and defense force to ensure enforcement of law.

• The Central Bank of The Bahamas is an independent body responsible for monetary policy. The Bahamian dollar is fixed at a 1:1 parity with the United States dollar. The Bank manages the country’s external reserves, issues legal tender, and regulates and supervises the country significant banking sector.

• The Bahamas has a highly educated populace with an adult literacy rate of 95% and provides an excellent pool of skilled labour, particularly in service sectors such as banking, accounting and legal and professional services.

• The Bahamas has strong international relationships with the United Kingdom, the United States, Canada, as well as neighbouring countries in Latin America, the Caribbean and China. It is a member of all leading multilateral institutions, and it is working towards full membership in the World Trade Organisation.

Competitive Advantages

• Tax incentives are available for foreign investors in key economic sectors and may include relief from import customs duties on raw materials, building supplies and equipment, and property tax holidays for selected foreign investments.

• There are no restrictions on the repatriation of profits or on current account transactions.

• An immigration policy that facilitates the granting of work permits for foreign personnel.

• The Bahamas Investment Authority (BIA) is a “one-stop” support to simplify the establishment of businesses for foreign investors.

• A world-class maritime and shipping hub, with state-of-the-art port and transshipment facilities to accommodate New Panamax cargo vessels in Freeport, and hosting mega cruise ships in Nassau.

• The Bahamas has significant incentives for new investments in agribusiness and alternative energy (wind and solar).

Sectors for Foreign Investors

The Government has under the Commercial Enterprise Act (2017) identified several priority business sectors for foreign investors:

• Tourism resorts and amenities, including sports tourism, faith- based tourism, ecotourism, education tourism, medical tourism and niche market development.

• Upscale villas, condominiums and second home development.

• International business centers.

• Aircraft and maritime services.

• Information and data processing centres.

• Information technology services.

• Light industry manufacturing and assembly.

• Agro-industries.

• Food and beverage processing.

• Banking, insurance and financial services.

• Offshore medical centres and services.

• Alternative energy, including wind and solar-generated energy development.

• E-commerce.

Investment Incentives

To promote economic diversification and growth, several laws have been enacted to encourage foreign investment:

• The Hotels Encouragement Act;

• The Industries Encouragement Act;

• The Export Manufacturing Industries Encouragement Act;

• The Agricultural Manufacturers Act;

• The Hawksbill Creek Agreement Act;

• The Spirits and Beer Manufacture Act;

• The Bahamas Vacation Plan and Time- sharing Act.

Major Chinese investments with The Bahamas to date include The Pointe Hotel, BahaMar Resort, Thomas A. Robinson National Stadium, and many other infrastructural and technical cooperation projects such as the completion and handover of two projects to build a port and a bridge in the island of Abaco in The Bahamas ($40 million USD).

Industry Sector

The advantage of manufacturing in The Bahamas includes the country’s proximity and easy access to North American consumer and business markets. Industry in The Bahamas includes oil storage, food and beverage processing, pharmaceuticals, limestone mining, and wet and dry dock ship maintenance and repair. The industrial sector is centred in the city of Freeport, a 200-square mile free trade and free tax zone. The industrial sector is ideally suited for light manufactured goods such as electronics, pharmaceuticals, jewelry, cosmetics, food processing, tools, plastics and furniture.

Agriculture Sector

Agriculture and industry combine to provide an additional 12% of GDP. The government continues to pursue food security through the expansion of the agri-business sector. Most agricultural products grown are consumed domestically and include citrus, vegetables, industrial salt, poultry and seafood.

Financial Services Sector

Financial services constitute the second largest sector of the economy and accounts for about 15% of GDP. More than 250 banks, financial institutions and trusts are licensed to do business in The Bahamas. The financial system is committed to evolving global standards to preserve its integrity and competitiveness. As an example, The Bahamas has signed more than 25 bilateral Tax Information Exchange Agreements (TIEAs) with OECD and G20 member states.

Establishing a Business in The Bahamas

International investors seeking to do business in The Bahamas should submit a proposal to the Bahamas Investment Authority (BIA).

Guidelines for proposals can be found on the BIA website, or contact The Bahamas Embassy, China.