Bahamas: Investing
The Bahamas is the second-largest host economy among SIDS (small island developing States) in terms of FDI. According to UNCTAD’s World Investment Report 2023, FDI inflows stood at USD 1.25 billion in 2022, up by 5.9% year-on-year, mainly due to intracompany loans. At the end of the same period, the total stock of FDI stood at USD 28.51 billion, equivalent to around 218.7% of the country’s GDP. The tourism sector attracts the majority of FDI inflows, which primarily comes from the United States, Canada, and China. The nation enforces a stringent USD 500,000 minimum requirement for foreign capital investments and it attracted FDI particularly from companies affiliated with or supported by the People's Republic of China. Over the past decade, the tourism sector has notably benefited from substantial investments from PRC-based entities. In 2022, The Bahamas emerged as a fintech hub, championing its central bank-backed digital currency and favorable regulatory landscape under the Digital Assets and Registered Exchanges (DARE) Act. Although Bahamas-based FTX faced closure in December 2022, interest from fintech and blockchain firms remains strong. The government aims to broaden the economy by encouraging investment in niche tourism, renewable energy, manufacturing, digital assets, technology, agriculture, fisheries, and extractive industries.
The Bahamas offers several favorable aspects for investment, including political stability, a parliamentary democracy, an English-speaking workforce, a robust financial services sector, well-established rule of law, contract enforcement, an independent judiciary, and strong consumer buying power. However, challenges include limited transparency in government procurement, labor shortages in specific industries, elevated labor expenses, bureaucratic and inefficient investment approval procedures, protracted legal dispute resolution, internet connectivity issues on smaller islands, and high energy prices. The government maintains a non-discriminatory approach to investors, granting equal access to incentives such as land grants, tax concessions, and direct marketing and budgetary support, regardless of nationality. Foreign investments are subject to governmental approval, with the Bahamas Investment Authority (BIA) being responsible for approving all FDI in every sector of the Bahamian economy. The BIA functions as the investment facilitation agency and acts as a ‘one stop shop’ to assist investors in navigating a potentially cumbersome approvals process. Several sectors have been reserved for Bahamian Nationals only. The Bahamas ranks 30th among 180 economies on the Corruption Perception Index 2023 and 61st out of 184 countries on the latest Index of Economic Freedom.
| Bahamas | Latin America & Caribbean | United States | Germany | |
|---|---|---|---|---|
| Index of Transaction Transparency* | 3.0 | 4.1 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 5.0 | 5.2 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 8.0 | 6.7 | 9.0 | 5.0 |
Source: Doing Business - Latest 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.
| Foreign Direct Investment | 2020 | 2021 | 2022 |
|---|---|---|---|
| FDI Inward Flow (million USD) | 897 | 1,185 | 1,255 |
| FDI Stock (million USD) | 26,072.5 | 27,257.6 | 28,512.4 |
| Number of Greenfield Investments* | 1.0 | 4.0 | 2.0 |
| Value of Greenfield Investments (million USD) | 5 | 81 | 38 |
Source: UNCTAD - Latest available data
Note: * Greenfield 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.
| Income tax | The Bahamas does not levy personal income tax |
| Bahamas | Latin America & Caribbean | United States | Germany | |
|---|---|---|---|---|
| Number of Payments of Taxes per Year | 20.0 | 28.2 | 10.6 | 9.0 |
| Time Taken For Administrative Formalities (Hours) | 155.0 | 327.5 | 175.0 | 218.0 |
| Total Share of Taxes (% of Profit) | 33.8 | 33.8 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
| Setting Up a Company | Bahamas | Latin America & Caribbean |
|---|---|---|
| Procedures (number) | 7.00 | 8.00 |
| Time (days) | 11.50 | 25.22 |
Source: Doing Business.
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: May 2024
