Bahamas: Investing

FDI in Figures

The economic crisis had a great impact on the FDI flows into the Bahamas, which have strongly declined in these last years. Considering the economic situation of its neighboring countries, Canada and the United States, the inflows of FDI should continue to fall during the next following years. Despite the strenuous will of the government to insure the economic sovereignty of the Bahamas, the dependence of the archipelago on foreign investments remains very important.

China has taken an inevitable role. The construction of the future largest tourist complex of the archipelago is being financed in its majority by a Chinese bank. The complex will have 2,300 hotel rooms, deluxe boutiques, business centers and casinos. In addition, during the visit of the First Minister of China to the islands in the Autumn of 2011, he announced new financing plans aiming to construct new infrastructure projects.

The country offers investors a stable and democratic political environment, attractive tax laws, well-developed infrastructures, qualified workforce and a geographical proximity to the United States. On the other hand, the main weaknesses of the island are the lack of economic diversification and the small scale of its domestic market. The tourism sector attracts most of FDI, coming from the United States and Canada.

Country Comparison For the Protection of Investors

	Bahamas	Latin America & Caribbean	United States	Germany
Index of Transaction Transparency*	2.0	4.1	7.0	5.0
Index of Manager’s Responsibility**	5.0	5.3	9.0	5.0
Index of Shareholders’ Power***	7.0	6.0	9.0	5.0
Index of Investor Protection****	4.7	5.1	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	839	657	977
FDI Stock (million USD)	7,732.1	8,385.8	9,062.3
Number of Greenfield Investments***	3.0	2.0	-
FDI Inwards (in % of GFCF****)	35.6	15.7	-
FDI Stock (in % of GDP)	103.6	115.9	-

Source: UNCTAD - Last Available Data

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Tax Rates

No consumption tax
Company Tax: None
Withholding Taxes: No taxes are levied on corporate income or gains. As the Bahamian government does not levy any direct taxes, there are no taxation conventions between the Bahamas and other countries.
Bilateral Agreement: The Bahamas and Lebanon are not bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers: 5.4%

Country Comparison For Corporate Taxation

	Bahamas	Latin America & Caribbean	United States	Germany
Number of Payments of Taxes per Year	18.0	33.2	11.0	16.0
Time Taken For Administrative Formalities (Hours)	58.0	384.7	187.0	215.0
Total Share of Taxes (% of Profit)	46.1	35.4	46.8	48.2

Source: Doing Business - Last Available Data.

Investment Opportunities

Tenders, Projects and Public Procurement: Inter-American Development Bank, Tenders in South America
DgMarket, Tenders Worldwide
Setting Up a Company: Consult Doing Business Website, to know about procedures to start a Business in Bahamas.
Useful Resources: Bahamas Investment Authority

Business Setup Procedures

Setting Up a Company	Bahamas	Latin America & Caribbean
Procedures (number)	7.00	9.30
Time (days)	31.00	56.70

Source: Doing Business.

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