Investment Incentives
The Bahamas encourages investors by allowing exemption from the payment of custom duties on certain construction materials, equipment and approved raw materials. Additionally, there is a waiver of real property taxes on certain investments for periods up to 20 years.
The Bahamas Government also gives accelerated consideration to applications for annual or permanent residency by major international investors and owners of residences valued in excess of $500,000.
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 abridged version of the policy is outlined below. This is by no means a complete outline of the policy nor of the many investment incentives in the Bahamas and Freeport (For additional information please contact our offices):
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
Name and address including telephone/fax.
Executive summary of project.
Type of Business – whether share company, partnership, individual or joint venture.
Principals – investors, major beneficial shareholders, including their dates and places of birth, as well as passport or social security numbers.
Proposed location.
Land requirements.
Start-up date.
Employment projections – number of Bahamian and non Bahamian employees.
Management/personnel requirement – years of experience, training and work permits* for key personnel.
Financial arrangements for project, including bank reference.
Environmental impact – toxic waste, disposal procedures, toxic input.
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 Centers.
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.
What’s involved in a real estate transaction?
Real estate transactions usually begin with all parties concerned: the purchaser, the vendor, their respective attorneys, and the realtor. The transaction includes an accepted purchase offer, with a subsequent deposit placed with the real estate professional as stakeholder. He/She will then provide an approved sales agreement, if not the vendor’s attorney will provide a draft, depending on the arrangement. Once the purchaser’s attorney has given approval, the contract will be executed first by the purchase then by the vendor. The vendor’s attorney will then issue a copy of the conveyance, which is held in escrow pending the completion of the sale. Upon approval of the conveyance, the sale wraps up with the conveyance executed and the balance of the agreed purchase amount paid to the vendor. The purchaser will receive the conveyance which is sent to the government registry to be recorded.
What do you need to know to purchase in The Bahamas?
Purchase Permit
As a non-Bahamian you will require a permit:
If the property is undeveloped land of five acres or more.
If the property is not a private residence, or not intended for development as such.
You would need a registration certificate or permit along with title documents to be recorded in the Registrar General’s office.
Application for registration – $25.00
Application for permit – $25.00
Certificate of registration
For property valued:
$50,000 or less $50.00 >$50,000 but under $101,000 – $75.00 >$101,000 and over – $100.00
For Home Owner resident card – $500.00
Stamp Duty
The government charges stamp duty on property transfers/conveyances as indicated in the following:
$0 – $20,000 4%
>$20,000-$50,000 6%
>$50,000-$100,000 8%
>$100,000-$250,000 10%
Over $250,000 12%
The seller and purchaser shares the stamp duty 50-50 unless otherwise agreed.
Legal fees charged by local lawyers run about 2.5% of the sale price.
For additional information:
Please Contact us at:
Office: 242.351.5263 (LAND)
Cell: 242.477.9573
For Our Canadian Clients: 416.628.9566
Email: [email protected]
Website: www.futurepropertiesbahamas.com