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Demographics

Starting 60 miles off the coast of South Florida and stretching as far south as Cuba, Haiti and the Dominican Republic, The Bahamas is a coral archipelago of 700 islands, 29 of which are inhabited, and over 2,000 rocks and cays. With a population estimated at 333,800 people in 2007, most of whom live on the major islands (New Providence, Grand Bahama, Eleuthera, Abaco, Exuma, Long Island, Inagua, Cat Island, Bimini and Andros), and with an adult literacy rate of 95%, The Bahamas, an English speaking country, has a capable work force.

When George Washington visited The Bahamas he coined the term, "Isles of Perpetual June" to describe the Bahamas because of its beautiful climate. Having a tropical maritime wet and dry climate, with slight incursions of mildly polar air, generally the Bahamas does not experience extremes of temperatures. The humidity is fairly high, especially in the summer months, but there is usually a pleasant breeze which lessens the humid effect. Rain showers can occur at any time of the year, but the rainy months are May through October. Rainfall is mainly in the form of heavy thundershowers, which clear quickly.

Infrastructure

The Bahamas has comprehensive and modern infrastructure, particularly on the two major islands, New Providence and Grand Bahama, where most of the population live. Electricity and water are in abundant supply. Telecommunications services and facilities in The Bahamas are state-of-the-art, with direct international links provided through a 100% digital switching system.

Government

The Bahamas declared independence from Great Britain on July 10, 1973, and a new Constitution became the supreme law of land for the Commonwealth of The Bahamas. The Constitution of the Bahamas proclaims the islands as a sovereign democratic state, sets forth requirements for citizenship, and guarantees fundamental human rights. The Bahamas retains its ties with the Commonwealth of Nations (formerly the British Commonwealth) and also retains the British monarch as its head of state. The Queen is represented in The Bahamas by a Governor General who is appointed and serves at Her Majesty's pleasure.

Currency

The legally acceptable currency of The Bahamas is the Bahamian dollar. Although all other currencies are foreign, the U.S. dollar is normally accepted throughout The Bahama Islands, and is on par with the Bahamian dollar. The Exchange Control is administered by The Central Bank of The Bahamas.

Economy

The Bahamas is a stable developing nation, according to a United States commerce report by the U.S. Embassy in Nassau. The economy is based mostly on tourism, offshore banking, and construction. Retail and wholesale distributive trade, manufacture, agriculture, and fisheries are the other major sectors of the economy.

The Gross Domestic Product (GDP) of The Bahamas was estimated at $6.24 billion in 2006. Tourism generates about 50% of the total GDP and directly or indirectly employs about 50,000 people, roughly half the total workforce.

National Investment Policy

In 1994, the government introduced a National Investment Policy to support an investment-friendly climate and foster economic growth and development of The Bahamas. An edited version of the policy follows:

The Investment Environment

To support 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 considered.
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, a well equipped police constabulary, modern health and education facilities and other social services.
7. Dependable public utilities.
8. Essential public infrastructure, such as roads, ports and airports.

International Financial Centre

The Government is also 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. 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.
3. Ensure the operation of a clean financial centre with specific rules and regulations to prevent the laundering of criminally derived assets.
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 30 years:

• Export Manufacturing Industries Encouragement Act
• Industries Encouragement Act
• Agricultural Manufacturers Act
• Tariff Act
• Hotels Encouragement Act
• Spirits and Beer Manufacturers Act
• Family Island Development Encouragement Act
• Free Trade Zone Act

*Customs duty exemptions do not apply to personal consumables

Preferential Trade Incentives

The following trade arrangements are also in effect:

• Cotonou Agreement
• CARIBCAN
• Caribbean Basin Initiative

Other incentives include investors acquiring public land for approved developments on concessionary terms.

Administration of Policy

The National Economic Council (NEC), headed by the Prime Minister, is responsible for executive management of the investment policy. Operational activities are the responsibility of the Bahamas Investment Authority (BIA).

Establishing a Business in The Bahamas

An international investor seeking to do business in The Bahamas should submit to BIA a project proposal providing the information indicated in the following Project Proposal Guideline.

Project Proposal Guideline

1. Name and address including telephone/fax.
2. Executive summary of project.
3. Type of Business - whether share company, partnership, individual or joint venture.
4. Principals - investors, major beneficial shareholders, including their dates and places of birth, as well as passport or social security numbers.
5. Proposed location.
6. Land requirements.
7. Start-up date.
8. Employment projections - number of Bahamian and non Bahamian employees.
9. Management/personnel requirement - years of experience, training and work permits* for key personnel.
10. Financial arrangements for project, including bank reference.
11. Environmental impact - toxic waste, disposal procedures, toxic input.
12. Total capital investment in project with a breakdown of items and start-up cost (minimum investment is $250,000.)

*Necessary work permits for key personnel will be granted. Businesses requiring permit for persons other than key personnel are encouraged to consult BIA in advance.

General

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

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 or residence valued at $500,000 or more.

Access to Credit Facilities of the Bahamas Development Bank

The Bahamas Development Bank (BDB) was created to help Bahamians establish new businesses or expanding existing ones through concessionary funding and technical assistance, for projects that generate jobs and which contribute to the economic growth and development of The Bahamas.

Areas Targeted For Overseas Investors

Following is a list of certain investment areas especially targeted for international investors. However, the list is not exhaustive, and investors interested in areas not included should consult BIA. Joint ventures with Bahamian partners are encouraged, with the choice of partner being at the discretion of the investor.

1. Touristic resorts.
2. Upscale condominium, timeshare and second home development.
3. Marinas.
4. Information/data processing.
5. Assembly industries.
6. High-tech services.
7. Ship registration, repair and other ship services.
8. Light manufacturing for export.
9. Agro-Industries.
10. Food Processing.
11. Mariculture.
12. Banking and other financial services.
13. Captive insurance.
14. Aircraft services.
15. Pharmaceutical manufacture.
16. Offshore medical centres.

Areas Reserved For Bahamians

1. Wholesale and Retail Operations*.
2. Commission agencies engaged in the import/export/trade.
3. Real estate and domestic property management agencies.
4. Domestic newspapers and magazines.
5. Domestic advertising and public relations firms.
6. Nightclubs and restaurants, except specialty, gourmet and ethnic restaurants, and restaurants operating in a hotel, resort complex or tourist attraction.
7. Security services.
8. Domestic distribution of building supplies.
9. Construction companies, except for special structures for which international expertise is required.
10. Cosmetic/beauty establishments.
11. Shallow water scale-fish, crustacea, mollusc and sponge-fishing operations.
12. Auto and appliance service operations.
13. Public transportation.

*International investors may engage in the wholesale distribution of any product they produce locally.

Property Transactions

In New Providence, real estate agents charge a 10% commission on the sale of undeveloped property. The commission for developed property, whether residential or commercial, is 6%. Agents charge a 10% commission for Out Island property, whether land, home or commercial.

Stamp Duty

The government stamp duty on property conveyances or realty transfers is graded as follows:

Up to & including	Stamp duty
$0-$20,000	2%
$20,000.01-$50,000	4%
$50,000.01-$100,000	6%
$100,000.01-$250,000	8%
Over $250,000	10%

In property sales, the vendor and purchaser each pay half the stamp duty unless otherwise agreed. The lawyer who prepares the conveyance typically charges a fee of 2.5% of the sale price.

Generally, payment of commission, stamp duty, and legal fees fall upon the seller. Sometimes property owners list a net sales figure, in which case the agent adds those charges to the price quoted to prospective buyers. Stamp duty on mortgages is payable at a rate of 1% on the amount borrowed.

International Persons Landholding Act, 1993

The International Persons Landholding Act made it easier for non-Bahamians and companies under their control to own property.

1. A non-Bahamian or permanent resident who purchases or acquires an interest in a condominium or property to be used by him as a single family dwelling, or for construction of such a dwelling, must apply to the secretary to the Investments Board to register the purchase. Application for Registration Form 1 must be filed with the Bahamas Investment Authority, Office of the Prime Minister, along with proof ownership and payment of stamp duty and real property tax, and a banker's draft/postal money order for $25 made payable to the Public Treasury.
2. Upon receipt of the above, the acquisition is registered and a certificate of registration issued.
3. A permit to acquire property is required if the property is undeveloped land and the purchaser would become the owner of five or more contiguous acres. A permit is also required if the non-Bahamian intends to acquire land or an interest therein by way of freehold or leasehold, when the acquisition is not in accordance with (1).
4. Non-Bahamians who own homes in The Bahamas may apply to the Director of Immigration for an annual homeowner's residence card. This card entitles the owner, spouse and any dependent children to enter and remain in The Bahamas for the duration of the validity of the card. This is intended to facilitate entry, but it does not confer resident status in The Bahamas.

All applications for permits, along with fees made payable to the Public Treasury, should be submitted to the Bahamas Investment Authority for consideration by the Investments Board.

Fee Schedule

The schedule of fees for a certificate of registration and permit are:

Application for registration............$25
Application for permit...................$25

Upon issue of certificate of registration or issue of permit where:

1. The property value* is $50,000 and under......................................$50
2. The property value is more than $50,000 but less than $101,000.....$75
3. The property value is $101,000 and over........................................$100

Annual homeowner's residence card.........................................................$500

*Value in relation to a lease is the annual rent reserved times the number of years.

Property Tax

Bahamians and non-Bahamians owning real property in The Bahamas must pay property tax. Returns are due on or before December 31 each year, and are filed with the Chief Valuation Officer. Taxes are paid to the Public Treasury and are as follows:

Rates of Taxes

1. Owner-occupied property (residential)
   1. The first $250,000 of market value*.....................................................exempt
   2. More than $250,000 and not exceeding $500,000 of market value.....3/4%
   3. More than $500,000 of market value....................................................1%
2. Vacant land owned by non-Bahamians
   1. First $3,000 of market value..................................................................$30
   2. More than $3,000 and not exceeding $100,000 of market value............1%
   3. More than $100,000 of market value....................................................1.5%
3. All other properties/commercial
   1. First $500,000 of market value.............................................................1%
   2. More than $500,000 of market value....................................................2%

*Market value is defined as the amount the property would realize if sold on the open market without any encumbrances or restrictions.

Immigration, Residency & Employment

Immigration

The government's immigration policy is aimed at ensuring the reasonable security, well-being and economic progress of The Bahamas and its people.

The government gives consideration to citizenship, permanent residency and work permits for non-Bahamians provided there is compliance with the immigration laws of The Bahamas and policies of the government. Accelerated consideration is given to applications for annual or permanent residence by major international investors and to "fit and proper owners of residences valued in excess of $500,000.

As The Bahamas is a major tourist destination, every effort is made to keep visitors' immigration formalities to a minimum. Non-Commonwealth citizens should inquire at the Ministry of Tourism for entry requirements, as they vary from country to country.

Visitors must have a return ticket to their homeland or to some other country where they would be accepted.

Visitors may visit The Bahamas for up to eight months, provided they can indicate means of financial support for this period. Visitors are not allowed to engage in any form of gainful occupation while in The Bahamas.

Passports

Passports are required by all persons except citizens of the UK and colonies, and Canadian citizens on visits not exceeding three weeks. However, passports are required for re-entry into the UK. British visitors' passports are accepted.

New Passport Requirements for US Citizens:

From travel.state.gov (the Department of State Travel Website)

All Americans traveling by air outside of the United States are required to present a passport or other valid travel document to enter or re-enter the United States. This requirement will be extended to sea travel (except closed loop cruises), including ferry service, by the summer of 2009. Until then, U.S. citizens traveling by sea must have government-issued photo identification and a document showing their U.S. citizenship (for example, a birth certificate or certificate of nationalization), or other WHTI compliant document such as a passport card for entry or re-entry to the U.S. Sea travellers should also check with their cruise line and countries of destination for any foreign entry requirements.

Visas

Visas are required by all persons entering The Bahamas except:

1. British Commonwealth citizens and landed immigrants of Canada, for visits not exceeding 30 days if in possession of Form 100.
2. US citizens entering as visitors for a stay not exceeding eight months.
3. Alien residents of the US who, upon arrival, are in possession of their national passports and US alien registration cards and work or residence permits for visits not exceeding 30 days.
4. Nationals of the following countries for visits not exceeding 14 days: Argentina, Bolivia, Brazil, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Uruguay and Venezuela.
5. Nationals of the following countries for visits not exceeding three months: Austria, Denmark, Finland, Germany, Israel, Japan, Republic of Ireland, South Africa and Sweden.
6. Nationals of the following countries:  Belgium, Greece, Iceland, Italy, Liechtenstein, Luxemborg, The Netherlands, Norway, San Marino, Spain, Switzerland and Turkey.
   
7. Persons in possession of a valid residence or work permit issued by the Director of Immigration.
8. Persons in transit, including stateless persons in possession of a valid refugee or stateless person's travel document, provided they are in possession of valid passports and tickets to some destination outside The Bahamas and that their stay, while awaiting onward passage on the first available ship or aircraft, does not exceed three days. This exemption does not apply to nationals of Haiti and the Dominican Republic who must always possess visas even in direct transit by air.

Applications for visas from nationals of the Dominican Republic, Haiti, and Colombia, or of Asian countries such as China, including those residing in Hong Kong, North and South Korea, Vietnam, Thailand, and Myanmar (Burma) must be referred to the nearest Bahamian consular office.

Visas for persons in the following categories may be granted without prior reference:

1. Nationals of countries not mentioned in the previous paragraph provided that the visit is intended for a period not exceeding three months.
2. Stateless persons who must be in possession of a document permitting re-entry into their country of residence and whose visit is intended for a period not to exceed three months.

Annual residence permit

People who wish to reside in The Bahamas on an annual basis may qualify under one of the four categories, subject to formal application and approval process.

1. Spouse or dependent of a citizen of the Bahamas:
   If an applicant is married to a Bahamian citizen, a resident spouse permit may be issued, provided the marriage has existed for less than five years. The resident spouse permit is issued for up to five years. An application can be made for permanent residence or citizenship after five years or more of marriage.
2. Spouse or dependent of a permit holder:
   In addition to the usual application process, a copy of the sponsor's work permit, permit to reside, certificate of permanent residence or other lawful authority to reside in The Bahamas must be included.
3. Independent economic resident.
   As part of the application process, a financial reference is required from a reputable bank verifying economic worth, and two written character references are required. For an annual residence permit, a head-of-household pays $1,000 and each dependent, $25.
4. Resident homeowner or seasonal resident homeowner.
   Under this category, non-Bahamians who own second homes in the Bahamas may apply to the director of immigration for an annual homeowner's residence card. This card is renewable annually and entitles the owner, spouse and any minor child/children endorsed on the owner's card when travelling with the owner, to enter and remain in The Bahamas for the validity of the card. The fee is $500 per year and is intended to facilitate entry in The Bahamas with minimal formalities, entitling the holder to visit for a stay of up to one year.

Successful applicants in any of above categories are not permitted to engage in employment.

Work permit

An inflexible principle of The Bahamas government is that no expatriate may be offered a position that a suitably qualified Bahamian is available to fill. Employers with vacant posts are required to advertise locally and consult the Bahamas Employment Exchange. If unsuccessful in fulfilling their requirements by these methods, they may apply to the Department of Immigration for permission to recruit outside The Bahamas, following a formal application process. Normally an application will not be processed if the prospective employee is already in the Bahamas having entered as a visitor.

Work permit fees range from $350 to $10,000 per year depending on the category. The Bahamas Immigration Bahamianization Policy, which is critical to the granting of work permits, provides that:

1. A Bahamian who is qualified to fill a position should be given the position in preference to anyone else.
2. The Bahamian must be given that job on the same terms and conditions as any expatriate counterpart.
3. Where the company has a career structure, whether here or abroad, the Bahamian employee must be given the same opportunities for advancement as would be afforded other employees.
4. The Bahamian employee must be helped whenever possible to broaden skills in a chosen field of endeavour by constant exposure to further training at home and abroad.

Where work permits have been granted, each employer will be required to identify a suitable Bahamian to understudy the expatriate's so that the Bahamian trainee will fill the expatriate's position within a reasonable time frame. Genuine investors usually have little difficultly in complying with these requirements.

Employers may obtain permits for longer periods than the standard one-year period in respect to certain key personnel on contract. Such contracts should indicate their renewal would be subject to obtaining the necessary immigration permission, and they may be endorsed to the effect that the employee is expected to train or be replaced by a suitable Bahamian within a stipulated period.

Each permit issued by the Immigration Board relates to a specific post. Permits are not altered by the Director of Immigration to reflect change of employment or residence. However, a person holding a work permit may make application for a new one (his new employer having been unsuccessful in recruiting a qualified Bahamian to fill the post) without having to leave the islands.

The renewal of a permit on expiration is not automatic. Generally, no expatriate may be continually employed in the country in any capacity for more than five years. However, there are likely to be cases of hardship will be caused by rigid implementation of this policy; according to government, this factor will be kept in mind in applying the regulations.

Bonding

A bond is required for each person granted a work permit, if necessary, to repatriate the employee and his dependents and to pay public charges, including medical expenses, incurred by the employee.

Sales representative permit

Traveling sales representatives planning to do business in The Bahamas must obtain work permits from the Department of Immigration, and a licence from the Licensing Authority.

Permanent residence

Applicants for this status of residency must be of good character and prepared to show evidence of financial support. Such an applicant must also state that he intends to reside permanently in The Bahamas.

Persons may apply for permanent residence in any of the following categories provided they satisfy statutory requirements of the Bahamas:

1. As the spouse of a citizen of The Bahamas, and in the case of a male, he must have been married for not less than five years. Women married to Bahamians may apply at any time after marriage.
2. As an economic applicant; that is, one who seeks to permanently reside in The Bahamas because of:
   1. Investment business or home.
   2. Established roots through family ties.

Persons who have held valid certificates of permanent residence prior to the Immigration Act, 1975, continue to hold such status automatically.

Business Investors

A business-sensitive legal framework and investor-friendly climate encourages non-Bahamian Investments, supported by the Bahamas Investment Authority (BIA), Ministry of Finance.

Although an investor is granted a licence by the Licencing Authority, a work permit must still be sought to be resident and an employee of/or operating business.

Business Licence fee

The Business Licence Act, 1980, made it mandatory for anyone operating a business aimed at obtaining a turnover to apply for and obtain a licence.

Annual licence renewal applications and payments are due every Jan-Apr, and expire on Dec 31. Fees are based, for most business, on their annual gross receipts less the direct cost of producing the turnover. They range from zero for a petty business to 1.5% of turnover or $500,000 (whichever is greater) for a very large business with a high profit. Companies designated non- resident under the Exchange Control Regulations Act pay an annual fee of $300.

Companies licensed under the Banks and Trust Companies Regulations Act, 2000(which imposes separate fees), do not pay for a business licence. Gas stations pay a fixed fee of 0.5% of turnover (a business with a turnover of $250,000 per year or more).

The Act's definition of "business" includes all types of manufacturing and commercial undertakings, and covers professions such as law, accounting and medicine. Where a business consists of separate and distinct undertakings, a separate licence must be obtained for each.

A non-Bahamian or a company not 100% Bahamian-owned must first obtain approval from National Economic Council and then wait for the licence application to be approved before commencing operations. Renewal of a non-Bahamian business licence is at the discretion of the Minister of Finance.