flag Bahamas Bahamas: Investing

FDI in Figures

FDI flows over the past three years are at a lower level than at the beginning of the decade. Nonetheless, the Bahamas is the largest host economy among SIDS (small island developing States) in terms of FDI.  According to UNCTAD’s World Investment Report 2021, FDI inflows increased by 47% to USD 897 million in 2020, despite the contraction of the domestic economy and tourism following the COVID-19 pandemic. Reconstruction work after the devastation of Hurricane Dorian in 2019 and investment in ICT services continued in 2020. The stock of FDI increased slightly in 2020 to USD 26 billion. Major investments in recent years include a collaboration between US giant MasterCard and the Central Bank of The Bahamas to launch the Bahamas Sand Dollar, the first digital currency of its kind. In addition, a USD 300 million expansion of the archipelago's largest resort complex, Baha Mar, was completed in 2021.

The quality of the business environment could benefit from further improvement, as the country ranked 119th out of 190 economies in the last Doing Business report, published by the World Bank in 2020, which indicated a one-spot drop compared to the previous year. Still, the Bahamas was among the economies that improved the most across three or more Doing Business topics. The Government aims to keep a stable and attractive investment climate to facilitate the ease and effectiveness of doing business in the Bahamas, so registering a new business has been easier and taxes are cheaper. The country can offer investors a stable and democratic political environment, attractive tax laws, well-developed infrastructure, a qualified workforce and a geographical proximity to the United States. On the other hand, the main weaknesses of the islands are the lack of economic diversification and the small scale of its domestic market. Despite the strenuous will of the government to ensure the country's economic sovereignty, the dependence of the archipelago on foreign investment remains significant. The Bahamas has an investment promotion strategy that includes multiple government agencies working to attract foreign direct investment. 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. The tourism sector attracts the majority of FDI inflows, which primarily comes from the United States, Canada, and China. The latter, in particular, has become a major player and is planning to finance new infrastructure projects in the country. Investments range from services to billion-dollar resort developments to million-dollar homes on the major islands of the archipelago. Although the Bahamas saw a significant decrease in FDI in 2020 and 2021, due to the COVID-19 pandemic, there have been some significant investments made in the country during that period. Most notably, the launch of the Bahamas Sand Dollar through a partnership between MasterCard and the Central Bank of The Bahamas.


Country Comparison For the Protection of Investors

  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 201920202021
FDI Inward Flow (million USD) 611897360
FDI Stock (million USD) 25,175.726,072.526,351.8
Number of Greenfield Investments*
Value of Greenfield Investments (million USD) 0543

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.


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Tax Rates

12% (standard rate).
Transactions that include the disposition of a business’ assets other than cash, deposit accounts, and real property are chargeable at a rate of 6%.
Certain transactions like conveyances, mortgages, long-term leases and other real property transactions are subject to VAT at 2.5% or 10% (according to the value of the transaction).
Some items are zero-rated (services that relate to land and property situated outside of the Bahamas; goods physically removed from the Bahamas or outside the Bahamas at the time of supply; certain professional, financial and insurance services where the benefit is obtained outside the Bahamas; the transfer of a business by one registrant to another where certain conditions are met; prescription medication and most over-the-counter medication.; breadbasket items, including baby cereal, baby food, baby formula, bread, broths, soups, butter, canned fish, cheese, condensed milk, cooking oil, corned beef, evaporated milk, flour, fresh milk, grits, margarine, mayonnaise, mustard, powdered detergent, rice, soap and tomato paste), others are exempt (domestic financial services, other than those provided for an explicit fee; certain insurance services; medical services where provided by a public health care facility to a public patient; rental of a residential building).
Company Tax
There is no corporate income tax in the Bahamas
Withholding Taxes
No withholding taxes are levied in the Bahamas.
Social Security Contributions Paid By Employers
5.9% (capped at BSD 2,903 monthly or BSD 670 weekly).
Other Domestic Resources
Department of Inland Revenue
Overview of the Bahamas' tax measures in response to Covid-19
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Individual Taxes

Income tax The Bahamas does not levy personal income tax

Country Comparison For Corporate Taxation

  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.

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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 8.00
Time (days) 11.50 25.22

Source: Doing Business.


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Latest Update: February 2023