This information is derived from the State Department's Office of Investment Affairs' Investment Climate Statement . Any questions on the ICS can be directed to EB-ICS-DL@state.gov
Last Published: 8/12/2016

Attitude toward Foreign Direct Investment

The government encourages foreign direct investment (FDI), particularly in the tourism sector, but reserves certain sectors of the economy for Bahamian investors.  With the exception of those sectors reserved exclusively for Bahamian investment (which are listed at www.bahamas.gov.bs/bia), the GCOB does not give preferential treatment to investors based on nationality, and investors have equal access to incentives which include land grants, tax concessions, and direct marketing and budgetary support.  The government provides guidelines for investments through its National Investment Policy (NIP), which is administered by The Bahamas Investment Authority (BIA) in the Office of the Prime Minister.  Large foreign investment projects, particularly those that do fit within the NIP, require approval by the National Economic Council (NEC) or Cabinet.  This process allows for environmental and socio-political input into the review and approval of applications for investment.  GCOB officials have informed the Embassy that the Government is considering proposals to codify the National Investment Policy into law.
 

Other Investment Policy Reviews

The Bahamas is ranked 106th in terms of the ease of doing business in the 2016 World Bank Doing Business Report. (http://doingbusiness.org/rankings.)  The report reflects a significant decline in the ease of starting a business and underscored historically problematic issues related to property registration, electricity, access to credit, and protecting minority investors.  On the positive side, it highlighted improvements in the areas of tax collection and trading across borders.  The Government is making efforts to improve its ranking and asserts that the recent drop is because of perceived improvements in the ease of doing business in other countries, rather than any increased difficulty in doing business in The Bahamas.  To address the decline in ranking, the Government has undertaken a full review of business and investment processes in conjunction with development of its National Development Plan.
 
According to the 2016 Heritage Foundation Index of Economic Freedom, The Bahamas ranks 31st in the world in economic freedom. (http://www.heritage.org/index/ranking.)  Its overall score increased by 2.2 points, with declines in labor freedom and monetary freedom offsetting improvements in government spending, fiscal freedom, business freedom, trade freedom, and investment freedom.  The report asserts that corruption remains a problem and that, while the overall regulatory system is conducive to entrepreneurial activity, protectionism, bureaucracy, and limited access to credit continue to hold back the emergence of a more dynamic private sector.
 

Laws/Regulations on Foreign Direct Investment

The Bahamas’ legal system is based on English common law with the highest court being the Privy Council in London.  Contracts are legally enforced through the courts; there is no written contract or commercial law.  Foreign nationals are afforded full rights in Bahamian legal proceedings. 
 
Foreign direct investment is encouraged through industry-specific legislation, which often provides exemptions for Customs duties or other incentives to investment.  Examples of such incentives include the Hotels Encouragement Act, the Export Manufacturing Industries Encouragement Act, and the Industries Encouragement Act.  In 2015, the Government enacted new and amended laws to provide enhanced protection of intellectual property rights; however, these laws are not yet in full force pending adoption of implementing regulations.  Registration of securities is regulated by the Securities Commission of The Bahamas (www.scb.gov.bs) and the Bahamas maintains an international securities exchange (BISX) (www.bisxbahamas.com).
 
American investors should be aware that they may not be able to rely on the provisions of U.S. Chapter 11 bankruptcy law to protect assets in The Bahamas.  In September 2015, a U.S. Bankruptcy Court judge dismissed a bankruptcy case in the United States involving the owner and developer of the stalled $3.5 billion Baha Mar resort complex in Nassau, citing a finding by a Bahamian Supreme Court judge that the project’s stakeholders would expect that insolvency proceedings would take place in The Bahamas.
 

Business Registration

The Bahamas Investment Authority (BIA) is the first point of contact for foreign investors and operates as the principal investment promotion agency for The Bahamas.  The BIA serves as a “one-stop shop” to assist investors in navigating the approvals process through various departments and agencies of the Government to ensure that requirements are met before the investment application is submitted to the National Economic Council or Cabinet for approval. (www.bahamas.gov.bs/bia.)  The services of the BIA are available to all investors that meet the minimum requirement of an investment exceeding $500,000. 
 
The BIA's Project Proposal Guidelines list the type of information and documentation that investors should provide when submitting proposals, consistent with the National Investment Policy.  The government generally views more favorably proposals that prove adequate financing, demonstrate investment experience, create local employment and support overall economic development. 
 
The BIA, with the support of the Ministry of Tourism, engages in regional and international conferences and trade shows to promote investment in the country.  It also maintains functional cooperation arrangements with the Caribbean Association of Investment Promotion Agencies (CAIPA) and benefits from grant funding from the EU Development Fund. 
 

Industrial Promotion

The National Investment Policy encourages and, for certain industries, provides incentives for foreign direct investment in the following priority sectors: tourist resorts, amenities and attractions; condominiums; time share and second home developments; marinas; information and data processing services; assembly industries; high-tech services; shipping; ship repair and other services; light manufacturing for export; agro-industries; food processing; aquaculture; banking and other financial services; captive insurance; aircraft and yachting services; pharmaceuticals; petro-chemicals; mining; and medical tourism centers.  These opportunities are widely advertised in the marketing material supported by the Government, promotional material developed by the BIA, and on a range of internet resources.  
 
The GCOB has indicated strong interest in attracting FDI to non-traditional sectors, including renewable energy and agriculture.

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