Bahamas: Foreign Investment Origins

The Bahamas is an attractive prospect for investors due to its stable economy and politics, tax incentives, privacy laws, and convenient location.

The Bahamas is an independent country with a strong democratic tradition, respect for the rule of law, and a well-developed legal system. The country's economy is stable, with a high per capita GDP of $33,187 in 2021, the second-highest in the English-speaking Caribbean. The Bahamas also has a profitable financial services sector and a thriving tourism industry, which accounts for 70% of the country's GDP and employs over half of the workforce.

One of the biggest draws for investors is the country's attractive tax regime. The Bahamas does not collect personal income tax, corporate tax, wealth tax, inheritance tax, or capital gains tax. Instead, the government generates revenue through VAT, property taxes, stamp duties, and license fees. This light taxation benefits businesses by optimising cash flow and maximising profits.

The Bahamas also has strict privacy laws that protect the confidentiality of business information. The International Business Companies Act of 1990 prohibits the sharing of corporate information with other countries, creating a modern and flexible business environment.

Additionally, the Bahamas is conveniently located just 90 minutes by flight from Florida, with close proximity to major Latin American and North American financial centres. This makes it an ideal location for international businesses looking to expand, as it provides easy access to a skilled English-speaking workforce.

Finally, the Bahamas offers a high quality of life with its amazing climate and lifestyle. The country boasts beautiful beaches, great resorts, and a pleasant climate year-round, making it a popular tourist destination.

Overall, the Bahamas presents a lucrative investment opportunity, particularly for those looking to set up offshore companies or expand their business overseas.

Attractive tax regime

The Bahamas has an attractive tax regime, which has made it a favourite destination for expats, retirees, and high-net-worth individuals from across the globe. The absence of income tax, corporate tax, wealth tax, inheritance tax, and capital gains tax is a significant financial incentive for many. This taxation policy can lead to substantial savings for those with high incomes or large estates when compared to countries with high personal tax rates.

The Bahamian government does not levy taxes on personal investments or financial transactions, meaning that interest, dividends, royalties, and any other income from investments are all tax-free. This makes it an ideal location for international entrepreneurs and businesses. The country's stable economy and politics further add to its appeal as an investment destination.

Instead of direct taxation, the Bahamian government collects revenue through indirect taxes such as Value Added Tax (VAT), customs duties, stamp duties, and property taxes. VAT, implemented in 2015, is applied at a rate of 12% to most goods and services, with certain exemptions for essential items, financial services, residential rent, local transport, and healthcare services. Customs duties on imported goods can range from 10% to 65%, depending on the type of goods, and the government provides concessions under certain circumstances.

The Bahamas also levies a Real Property Tax on all properties, with rates depending on the type and value of the property. Owner-occupied properties valued under $250,000 are exempt, while those valued between $250,000 and $500,000 are taxed at 0.75%. Properties valued above $500,000 are taxed at 1%. Non-Bahamians who own vacant land may be subject to an 'Owner Absent' tax, which is higher than the standard rates.

The light taxation system in the Bahamas helps businesses optimise their cash flows and maximise profits, making it a very lucrative investment destination, especially for those looking to set up offshore companies or international business companies (IBCs).

High level of privacy

The Bahamas has strict privacy laws that protect the confidentiality of information for Bahamian businesses. The International Business Companies Act of 1990 prohibits the sharing of corporate information between the Bahamas and any other country, creating a modern business environment and offering a higher level of privacy for Bahamas International Business Companies than companies incorporated under traditional laws.

The Bahamas also has privacy laws that protect account information for account holders from around the world. This means that investors can rest assured that their assets are safe when they invest in the Bahamas.

The Bahamas is also an observer in the WTO and is not a party to the agreement on Trade-Related Investment Measures (TRIMS). It has signed the Economic Partnership Agreement (EPA) with the countries of the Caribbean Forum of African, Caribbean, and Pacific (ACP) States (CARIFORUM) and the European Union (EU).

Additionally, the Bahamas offers tax incentives for businesses, including the absence of personal income tax, corporate tax, wealth tax, inheritance tax, and capital gains tax.

Easy to open an offshore bank account

Opening an offshore bank account in the Bahamas is a relatively straightforward process, with several benefits for international investors. Here are some key points to consider:

Attractive Tax Regime

The Bahamas has a stable economy and political system, offering an attractive tax regime with various incentives. The country does not collect personal income tax, corporate tax, wealth tax, inheritance tax, or capital gains tax. Instead, the government generates revenue through other forms of taxation, such as VAT, property taxes, stamp duties, and license fees. This light taxation system helps businesses optimise their cash flow and maximise profits.

High Level of Privacy

The Bahamas has strict privacy laws that protect the confidentiality of information for businesses operating in the country. The International Business Companies Act of 1990 prohibits the sharing of corporate information between the Bahamas and any other country, creating a modern and flexible business environment. This provides a higher level of privacy for international businesses compared to companies incorporated under traditional laws.

Once you successfully register an offshore company in the Bahamas, it is straightforward to open a corporate bank account. The jurisdiction is known for its strict banking regulations, with privacy and security comparable to Swiss banks. The Bahamas has privacy laws in place to protect account information for account holders worldwide. Investors can rest assured that their assets are safe when investing in the Bahamas.

English-Speaking Workforce

The Bahamas is an English-speaking country, making it easier for businesses to recruit employees and communicate with potential candidates. Setting up international businesses in the Bahamas will also create more job opportunities for local workers. The Bahamian government prioritises training its people to meet international standards.

Stable Economy and Investment Opportunities

The Bahamas has one of the highest GNPs in the region, owing to its stable political and economic environment. The country's financial sector is the second-largest contributor to its GNP, with over 200 licensed banks from countries like the UK, US, Canada, and Switzerland. The Bahamas also has one of the largest financial sectors globally, boasting an asset base of over $200 billion and a capital-to-asset ratio of 11%.

How to Open a Bank Account in the Bahamas

• Determine your financial goals and choose the type of bank account you need (e.g., investment account, local checking account).
• Locate several banks that meet your needs, including large multinational banks like HSBC, Barclays, Citibank, and Scotiabank, or local banks like First Caribbean International Bank.
• Contact the banks to inquire about their specific requirements, account types, minimum deposit amounts, fees, and whether you need to be present to open an account.
• Choose your preferred bank based on their services, reputation, and requirements.
• Gather the required documents, typically including government-issued identification (e.g., passport, driver's license), proof of residence (e.g., utility bill), and occupation details.
• Open your account remotely or meet with a banker in person to finalise the process and provide your initial deposit.

English-speaking workforce

The Bahamas is an English-speaking country with a stable economy and politics. Bahamians' use of English and frequent travel to the U.S. contribute to their preference for U.S. goods and services.

English is the official language of the Bahamas and is spoken by a majority of the population. Bahamians use British English in their communication, publication of government and official records, mass media production, education, and business or other commercial transactions.

The Bahamas is a popular destination for international investors, and the country's English-speaking workforce is one of the positive aspects of its investment climate. The country's proximity to the United States, common English language, and exposure to U.S. media and culture contribute to Bahamian consumers' familiarity with and positive attitudes towards U.S. goods and services.

For businesses looking to expand globally, an English-speaking workforce in the host country can be advantageous for ease of communication and recruitment. The Bahamas' English-speaking workforce, along with its stable democracy, respect for the rule of law, profitable financial services, and high per-capita GDP, make it an attractive destination for foreign investment.

The Bahamas has a well-educated labour force by international literacy and numeracy standards, and both skilled and unskilled labour is readily available. The minimum wage is $5.25 per hour ($210 per week), and wage rates are slightly lower than in the United States but higher than in most countries in the region.

The Bahamian government has granted special permission to resort developments to bring in foreign construction workers, with numbers ranging from a few hundred to several thousand during the construction of large resorts. These concessions were negotiated as part of the Heads of Agreement for specific, large-scale investments. In most other cases, the employment of foreigners requires applying for individual work permits.

The Bahamas' labour laws grant unions the right to free assembly and association and to bargain collectively. These rights are extensively exercised, particularly in state-owned industries. The Fair Labour Standards Act requires at least one 24-hour rest period per week, paid annual vacations, and employer contributions to National Insurance (Social Security). It also mandates overtime pay for working more than 40 hours a week or on public holidays.

The Bahamas' English-speaking workforce, combined with its favourable investment climate, makes it a desirable location for businesses seeking expansion opportunities.

Amazing climate and lifestyle

The Bahamas is a beautiful country with turquoise beaches and great resorts. It has a pleasant climate all year round, which attracts many tourists looking to relax. It is a great place to review your business and investment plans while enjoying the lavish, relaxing lifestyle that the Bahamas offers.

The Bahamas has a tropical climate with a hot and wet season, and a warm and dry season. The temperature varies from the low 70s Fahrenheit during the winter to the low 80s Fahrenheit during the summer, and extremes seldom fall below the low 60s Fahrenheit or rise above the low 90s Fahrenheit. The average annual rainfall is about 44 inches, occurring mostly during the summer months. Prevailing winds lend a cooling influence to a generally humid atmosphere.

The Bahamian climate is mild throughout the year, with the average temperature varying from the low 70s Fahrenheit during the winter to the low 80s Fahrenheit during the summer. The hottest months are July and August, with an average temperature of 84 Fahrenheit, and the coldest month is January, with an average temperature of 72 Fahrenheit. The wettest month is August, with an average rainfall of 6.2 inches.

The Bahamas is an ideal place to enjoy the sun and sea, with more than 3,000 islands, cays, and islets offering a range of turquoise beaches and great resorts. The pleasant climate and beautiful natural scenery make it a perfect destination for those seeking a relaxing vacation.

The Bahamas has a stable economy and politics, with an attractive tax regime that offers various incentives for businesses. The country does not collect personal income tax, corporate tax, wealth tax, inheritance tax, or capital gains tax, which helps businesses optimize their cash flow and maximize profits. The privacy laws in the Bahamas also provide a high level of confidentiality for businesses.

The Bahamas has a lot to offer in terms of climate and lifestyle, making it a desirable destination for investors and tourists alike. The mild weather, beautiful beaches, and relaxing atmosphere create an ideal environment for those seeking a pleasant and enjoyable experience.

Frequently asked questions