A Primer for Starting a Business in The Bahamas
Foreign investors have good reason to consider The Bahamas the perfect place to start a business. The obvious reasons are its weather and beautiful natural flora and fauna; however, the economic reasons include our simple tax structure, no income tax, proximity to the USA making it an excellent trade hub and stable government.
If you intend to start a business in The Bahamas here are some considerations you should have:
1. The Bahamas Investment Board (BIA) gives approval to qualified foreign investors wishing to start a business in The Bahamas. There are areas targeted for direct foreign investment.
2. The business should have a business plan and there is a minimum investment amount that is stipulated by BIA.
3. Other approvals that may be required include Central Bank approvals, licenses of certain regulatory agencies (depending on the nature of the business) and or professional bodies, etc.
4. Some costs associated with operating a business in The Bahamas includes:
A. NIB Employer’s portion of premium:
this is similar to the USA’s social security benefits program which provides protection against the loss of earnings due to retirement, death, or disability,
B. Wages and Salaries: Employers are governed by the Minimum Wage Act and salaries must comply with the minimum rate.
C. Business Licence annual tax fees: which ranges from ½ to 3% of the company’s gross annual revenues;
D. Regulatory licencing fees: this depends on the type of business entity established;
E. VAT: Value added tax is payable on certain purchases made locally by the business;
F. Bank fees: Banks charge transaction fees on services rendered;
5. An IBC and or Domestic Company can be incorporated in at least 72 hours after all paper work is submitted;
6. IBCs need only have one director who may be an individual or a company.
7. IBCs need have only one shareholder.
8. The names of Shareholders are not filed at the Company Registry, however, the name is placed in a the Attorney General’s registry which is accessible only by designated/authorized individuals.
9. There is a substance requirements for certain commercial entities which conduct “relevant activity”, which means these entities must show they substantially operate and are located in a physical location in The Bahamas. Some examples of relevant activity are business engaged in:
A. banking business;
B. insurance business;
C. fund management business;
D. financing and leasing business;
E. headquarters business;
F. distribution and service centres business;
G. shipping business;
H. commercial use of intellectual property; or
I. a holding company, engaged, or one or more of its subsidiaries engaged in the previous stated business activities.
10. Some businesses directed for foreign investor are Touristic Resorts, Upscale Condominium, Time share and Second Home Development, Information and Data Processing Services, Assembly Industries, High-Tech Services, Food Processing, Mariculture, Banking and other Financial Services, Pharmaceutical manufacture, Off-shore Medical Centres.