The Financial Industry » The Bahamas Advantage
It is not by chance that The Bahamas is the most successful international financial centre in the Caribbean today. More than 80 years of thought, effort and co-operation have produced ideal conditions for High and, indeed, Ultra High Net Worth individuals, families and businesses to manage their wealth efficiently in comfort and style.
The country’s mature financial services industry, established infrastructure, progressive government, tax neutral environment and luxury lifestyle all have been cultivated very carefully to satisfy the specific needs of this most exclusive clientele.
The Top12 advantages of doing business in The Bahamas are as clear as the crystal waters surrounding the 700 islands of the archipelago:
1 Strategic Location
The Bahamas is situated at the Crossroads of the Americas, just 65 miles off the east coast of Florida
- It is an ideal hub for regional investment and business in the Eastern United States and Canada, and much of Central and South America;
- It is in the same time zone as New York and Toronto, with office hours that align with most of the major business centres in the Americas;
- It offers a favourable location for ownership of intangible assets, and the operation of corporate offices and businesses involved in international trade.
2 Wealth and Asset Management Options
The Bahamas offer owners of capital a broad choice of financial institutions that deliver myriad services including banking, private banking and trust services, investment fund administration, capital markets, investment advisory services, accounting and legal services, e-commerce, insurance, and corporate and shipping registries.
- The Bahamas is home to over 270 licensed banks and trust companies including seven of the world’s top eight private banks and 35 of the top 100 global banks. North American banks have been doing business in The Bahamas for more than a century and European and Swiss banks have deep roots established over more than 70 years;
- Financial institutions from other regions with growing economies are recognising the advantages of operating in The Bahamas and will be an important part of the country’s financial services landscape in the years ahead;
- The range of professional investment management services available in The Bahamas is similar to that found in the world’s leading financial centres such as New York, London or Hong Kong;
- There are over 120 broker dealers and investment advisory firms that offer investment management services, custodial services, corporate services and registrar and transfer agent services. More than 60 fund administrators provide fund administration, corporate services and registrar and transfer agent services. In excess of 700 Funds are licensed in The Bahamas, with assets under management totaling over $200 billion;
- The Bahamas’ insurance industry is aided by a modern and compliant regulatory environment and market responsive insurance legislation to offer the right ingredients and ideal environment to provide the fundamental benefits of international wealth management; namely asset protection, tax efficiency and investment flexibility;
- The Bahamas is a favourable jurisdiction for the establishment of family offices, which help wealthy families achieve their goals while dealing with increased regulations, and complex issues of taxation, distribution planning and charitable giving.
3 Physical Resources
The Bahamas has developed its land, premises and fit-for-purpose infrastructure with the singular focus of facilitating international business
- Modern office facilities are connected globally through three separate, fully redundant, self-healing, fibre optic cable networks, with data protection at the OECD Standard;
- The Bahamas is easy to access , with some 21 international airports and 40 other airports situated throughout the archipelago, as well as countless ports of entry and marinas that can accommodate the largest yachts;
- More than 10,000 acres on Grand Bahama have been earmarked for industrial and commercial development;
- The Freeport industrial zone has one of the most efficient and deepest harbours in the region as well as an international airport capable of handling the largest aircraft in service, and an international business and logistics park for value-added and cargo handling activities.
4 Human Capital
The Bahamas has a highly educated local workforce and a long tenure in financial services excellence, creating a deep pool of skill and experience that is recognised and trusted worldwide
- Most students who aspire to careers in wealth management attain their degrees from universities in the United States, Canada and the United Kingdom. Professional development and training remain high priorities for the industry, which confers degrees and certifications locally through its professional associations;
- With an estimated 9000+ experienced financial professionals committed to the local community, clients can expect to build deeper and more lasting relationships and receive more consistent service in The Bahamas than in locations largely dependent upon imported skills;
- The top four global accounting firms and eight mid-tier firms all have operations in The Bahamas, and a robust legal community numbers close to 1000 lawyers trained in English common law.
The Bahamas remains committed to a tax neutral platform upon which international persons receive the same tax benefits as Bahamians.
- No income, capital gains and inheritance taxes for all who conduct business or reside in The Bahamas.
- A modest business licence tax for companies carrying on business in The Bahamas;
- A 10 per cent Government stamp tax at the purchase of a new home;
- Real property taxes of 1.5 per cent of the property value;
- A modest monthly national insurance payment for employees.
- VAT of 7.5% payable on most goods and services imported into The Bahamas or purchased locally.
Companies, meanwhile, operate tax-free within the Freeport and Lucaya areas on Grand Bahama Island (areas designated as the Port area), under the terms of the The Hawksbill Creek, Grand Bahama (Deep Water Harbour and Industrial Area) Act. VAT does not apply to transactions taking place within the Port area where (a) a supply of goods within the Port Area is made by a taxable person who is a Port licensee to another Port licensee and the goods are of a kind and for a use within the customs duties exemptions in clause 2 of the Hawksbill Creek Act; and (b) An importation of goods from outside The Bahamas is made into the Port by a Port licensee and the goods are of a kind and for a use within the customs duties exemptions in clause 2 of Hawksbill Creek Act. Click here for an explanatory guide.
The Bahamas adheres to the principle that persons have a right to privacy with respect to the conduct of their affairs. As such, it will share information only on agreed and transparent protocols agreed to under a Tax Information Exchange Agreement (TIEA) reflecting the Organization for Economic Cooperation and Development (OECD) standard for tax information exchange.
6 Investment Policy and Incentives
The Bahamas’ government is committed to building an economic environment in which free enterprise can flourish.
- The National Investment Policy is designed to support an investment-friendly climate and facilitates Bahamian and overseas investments;
- Investment incentives include exemption from the payment of customs duties on building materials, equipment and approved raw materials, and real property taxes for periods up to 20 years;
- Investors may acquire publicly-owned lands for approved developments on concessionary terms; and also can lease low-cost industrial space;
- The government will provide special training and retraining for Bahamian workers to ensure the continuing availability of a highly-skilled labour force.
7 Political and Economic Stability
The Bahamas has an outstanding record of political and economic stability, progress and stewardship.
- More than 280 years of uninterrupted parliamentary democracy;
- It has been an independent nation since 1973, and retains a Westminster-based system of Government and an English-based legal system;
- Currency on par with US;
- Member of United Nations, Commonwealth of Nations, Organization of American States and Caribbean Community;
- Highest ranking nation for civil liberties & political rights by the World Bank and recognised as a sound environment for foreign direct investment with an Investment Grade Government Debt rating (Standard & Poor’s and Moody’s).
The Bahamas encourages the growth of its financial sector through adherence to internationally accepted regulatory principles, and efficiency in their administration.
- Regulatory independence is maintained through the separation of roles of policy makers and regulators;
- Regulation and regulators are subject to independent assessments by the Caribbean Financial Action Task Force, the Caribbean sub-group of the Financial Action Task Force, and the International Monetary Fund;
- The Bahamas also is an active participant in multilateral organisations established to set and monitor standards for regulation and Anti-Money Laundering and Countering of Terrorist Financing (AML/CFT);
- A regulatory consolidation is in progress to increase efficiencies and minimise administrative requirements on the private sector.
9 Public-Private Sector Partnership
Government and business interests in The Bahamas act in close partnership to respond to market needs and at the same time adhere to international standards.
- Since 1998, The Bahamas Financial Services Board (BFSB) has promoted a greater awareness of The Bahamas' strengths as an international financial centre;
- With a long history of positive contribution to the financial service industry’s development, the country’s professional associations also offer the government a window to the industry to better identify and respond to change.
10 Permanent Residency Opportunities
The Bahamas has a liberal process for granting Economic Permanent Residency (EPR) that makes it easier for individuals to “follow their money” with respect to where they live and work
- Persons with permanent residence are for all intents and purposes treated like Bahamians, except for the right to vote;
- Acceleration of the permanent residence application is available for persons who spend a minimum of $500,000 on a residence. For more substantive investments of $1.5 million or greater, applications will be reviewed within 21 days;
- Permanent Residence allows the holder to pass freely through Immigration. There is no requirement to be in the Bahamas a minimum or maximum number of days. Spouses and children are endorsed on the permit for a one-time government fee of $10,000.
- Additional categories include “annual residence” which may be renewed each year, and the “homeowner’s resident card” which does not confer permanent residency privileges, but does permit the holder to move freely through Immigration at any port of entry.
- Individuals can also bring in their own personal assistants or household staff subject to the clearance of the Director of Immigration and the issuance of work permits.
- Under new legislation a business license can be secured in 7 days, providing it meets the legal and regulatory requirements.
11 Work Permits and Immigration
The Bahamas has a flexible immigration policy which encourages companies to develop Bahamian talent but recognises the needs of international firms, individuals and families to recruit additional human resources abroad
- The country welcomes non-Bahamians with specialised skills and expertise that are not otherwise locally available. Normally, such persons will be involved in business enterprises which create employment opportunities for Bahamians, such as banking, hotels or agribusiness.
- The cost of a Work Permit varies from $350 for a farm worker to $12,500 for a senior professional. Work Permits usually are granted for one year in the first instance but occasionally for periods up to three years for senior personnel.
- It is possible to obtain Permanent Residence with the right to work in one’s own business.
The Bahamas is located in one of the most idyllic tropical settings in the world and has many attractive features for those who may wish to relocate permanently or establish a second home
- To meet the diverse and sophisticated tastes of travelers and residents alike, The Bahamas offers something to suit every taste: rest and relaxation, family fun and entertainment, or adventure and exploration. With miles of natural sand beaches, out-door attractions, luxury resorts, golf, casinos, restaurants and shopping, there is no shortage of exciting things to do.
- Gated waterfront communities packed with lifestyle amenities from golf and tennis to spas and marinas are attracting more second and third-home buyers from North and South America, Europe and the Far East;
- A popular investment vehicle is the condotel, a condominium or single family residence that converts into fully-furnished, upscale accommodations, managed by a resort company and rented when not owner occupied;
- Private islands also are available for purchase.
- The Bahamas is a service economy accustomed to providing concierge residential management services for homeowners who are not in residence.
- Direct flights are available to The Bahamas from all major U.S. cities, Canada, the UK, Europe and Panama; and the country has numerous ports of entry and marinas.
- Commercial passengers, private jets and goods shipped from Freeport enjoy pre-clearance to the United States. U.S. pre-clearance for commercial passengers also exists from Nassau;
- The Bahamas has a number of excellent private schools in New Providence and Freeport, several of which have been internationally accredited by ECIS and NAIS, the two bodies that accredit the leading European and North American schools;
- There are two major hospitals in New Providence and one in Grand Bahama, staffed by internationally-trained doctors capable of handling all major procedures. Medical facilities in the United States also are accessible easily from The Bahamas.
All of these advantages may be summed up very simply: The Bahamas is committed to growth and to developing its natural resources and cultivated assets to create an environment that supports business and the enjoyment of life in equal measure. Individuals, companies and family offices all will find a warm welcome when they come to The Bahamas.