Doing business in The Bahamas, especially for a foreigner, involves a structured process that starts with determining your business structure, securing necessary government approvals, and complying with local investment requirements.
The country actively welcomes foreign direct investment, particularly in sectors like financial services, tourism, and real estate development.
Key Steps for Doing Business in The Bahamas
The process for establishing a business usually follows these general steps:
1. Determine the Business Structure
You must decide on the legal form of your business, which could be a Sole Trader, Partnership, or an International Business Company (IBC), among others. For foreign investors, an IBC is often chosen due to its tax exemptions on income earned outside The Bahamas and relatively fast incorporation process. For a local presence, a limited company is more common.
2. Name Reservation and Registration
- Trade Name (Business Name): For individuals, sole traders, or partnerships, you must first apply for an approved Trade Name through the Department of Inland Revenue (DIR).
- Company Name: If you choose a Limited Company or IBC, the name must be reserved and approved by the Registrar General’s Department, adhering to specific naming conventions (e.g., must end with “Limited,” “Inc.,” or “Corp.” for an IBC).
3. Secure Agency Approvals
Once your business or company name is approved, you must apply for various agency approvals, which can often be done through a consolidated application process. These typically include approvals from:
- The National Insurance Board (NIB)
- The Royal Bahamas Police Force (RBPF) for business licensing and inspection
- Relevant agencies for physical planning and environmental health services
4. Obtain a Business Licence
After receiving your agency approvals, you can apply for a Business Licence via the Department of Inland Revenue’s online tax administration system (OTAS).
- You will register an account, complete the application form, upload supporting documents, and agree to the declaration.
- Once the application is approved, the required payment must be made online or at a local bank.
- The licence must be renewed annually.
5. Foreign Investment Requirements
Foreign investors must be aware of specific regulations, which often include:
- Minimum Investment: There is often a minimum investment requirement for foreign nationals (sometimes around $500,000 USD), although this can vary depending on the sector and size of the venture.
- Restricted Sectors: Certain business areas are reserved strictly for Bahamians, such as public transportation, domestic distribution of building supplies, domestic advertising and public relations, and certain types of restaurants and construction, except for specialized projects requiring international expertise.
- Investment Board Approval: Your business proposal must be approved by the Bahamas Investment Board.
- Registered Agent: An IBC must use a third-party registered filing agent for incorporation.
Real-Life Business Examples
The Bahamas is a hub for international business, particularly in the financial services and tourism sectors.
- Financial Services: Major international banks and financial institutions operate in The Bahamas, often leveraging its status as a financial center. Examples include Royal Bank of Canada Trust Company (Bahamas) Limited and Scotiabank (Bahamas) Ltd. These companies establish a presence to serve both local and international clients with banking, wealth management, and trust services.
- Tourism/Resort Development: Large-scale international developments are prominent. For example, the Kerzner International Bahamas Limited (developer of the Atlantis Resort) and the massive Baha Mar project (which features major hotel brands like Rosewood and Hyatt) showcase significant foreign direct investment in the hospitality sector.
- Energy and Trading: Companies involved in the energy sector also have operations in the country. Shell Western Supply & Trading Limited and Esso Holding Company Singapore Limited are examples of major global trading firms with a presence in Nassau.
These examples highlight that foreign investment is substantial, often focusing on large-scale operations or international financial activities.