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 New Providence | Grand Bahama | Abaco | The Out Islands WHAT-TO-DO - NASSAU, CABLE BEACH & PARADISE ISLAND - JAN 2004  Investing in paradise Why you should do it now Originally published WHAT-TO-DO - NASSAU, CABLE BEACH & PARADISE ISLAND - JAN 2004 © Etienne Dupuch Jr Publications Ltd With its close proximity to the US, a strong economy and a well-regulated and growing financial services industry, The Bahamas is more than sun, sea and sand. It's a great investment destination, offering innovative vehicles in an offshore environment as well as more traditional products. Why should I invest in The Bahamas? The absence of taxes, including capital gains, withholding, sales, inheritance and personal income taxes, makes this a great place to make money. There's also an investment-friendly government, stable political environment, mature legal and judiciary system based on a long tradition of democracy and constitutional rule, well-established public services, good schools and medical facilities. Best of all, the warm, sunny climate, crystal clear waters and friendly people ensure visiting your investment, or running your business from here, is a pleasant experience. What offshore investment vehicles are available? The Bahamas offers a full range of offshore investment vehicles including mutual funds, trusts and foundations, IBCs, insurance products, hedge funds and more. A new vehicle called the SMART - Specific Mandate Alternative Regulatory Test - fund has been adopted as part of the new Investment Funds Act. The legislation provides an innovative way for investors to quickly obtain licences for new mutual funds. Once a fund is recognized by the Securities Commission of The Bahamas, the commission will issue a SMART fund template outlining the parameters under which the fund will operate and that template will then be available to future applicants for fund licences. Unrestricted investment fund administrators in The Bahamas will be able to issue licences to applicants applying for existing SMART fund templates, saving time and paperwork. SMART funds that follow a published template could be licensed in a few days. What businesses can foreigners invest in? Among the areas are tourism resorts, banking and other financial services, timeshare, condo and second home developments, hi-tech services, light manufacturing for export, food processing, captive insurance, mariculture and agricultural industries, aircraft services, pharmaceutical manufacture, assembly industries, marinas and offshore medical centres. The foregoing is not a complete list and investors should consult the Bahamas Investment Authority (BIA) for additional information. The BIA is a one-stop investment coordinator, responsible for policy formation, promotion of opportunities and assessing foreign investment proposals. What types of business are reserved for Bahamians? Generally the fields of real estate, publishing, nightclubs and restaurants, construction, building supply, security, wholesale and retail operations, import and export trade, fishing, auto and appliance repair, public transportation and cosmetic and beauty establishments are reserved for Bahamians. There are some exceptions, however. What business incentives apply? There are several government initiatives, including legislation that provides exemptions on customs duty on building materials, equipment, manufacturing supplies, some raw materials and deferral of property taxes. More specifically, the Hotels Encouragement Act, Export Manufacturing Industries Encouragement Act, Agricultural Manufactories Act, Spirits and Beer Manufacture Act, Family Island Development Encouragement Act and Industries Encouragement Act, are designed to help foreign investors. Additionally, several international preferential trade agreements are in place to aid investors. These include the Caribbean Basin Initiative (CBI), Caribbean Community and Common Market (CARICOM), CARIBCAN, and the Cotonou Agreement, which succeeded the Lom? IV convention. Is it expensive to live in The Bahamas? The cost of living in Nassau is tempered by two major factors: No income tax and year-round summer weather. Bahamian money is on a par with the US dollar. Generally, because 90 per cent of all consumer goods are imported from the US, the cost of living is higher than in North America. Freight and customs duty make cars, appliances, furniture, food and clothing and most consumer goods comparatively more expensive. But then, you don't need winter clothing or snow tires. Most rental homes and apartments are basically furnished. Rentals vary according to season and location. On average, an efficiency apartment in Nassau rents for $500-$1,000; a one bedroom for $500-$1,800; and a two bedroom for $700-$6,000. A two-bedroom home runs from $1,200- $5,000 a month, and a three-bed detached house or condo rents for $2,500-$8,000 monthly. Building costs for a three-bedroom home start at $110 per sq ft - about $165,000 for a 1,500 sq ft home. Costs vary according to location, materials and the builder. For instance, building a home in the exclusive private community of Lyford Cay could range from $250 to $450 per sq ft. Medical and dental care can cost a little less than in the US. Wages vary, but tend to be higher in the hospitality and financial industries. Can I buy real estate in The Bahamas? Yes. Non-Bahamians may buy real estate in The Bahamas. In fact, the International Persons Landholding Act, 1993, made it easier for non-Bahamians and companies under their control to own property. You must register your home purchase with the Investments Board and pay stamp duty and property tax on the purchase. Certain land purchases require a permit, such as the purchase of more than five acres of undeveloped land. As a non-Bahamian homeowner, you may apply for a homeowner's residence card, which allows you to enter and remain in The Bahamas for the duration of the card. Even better - if your home is worth more than $500,000, you receive accelerated consideration for permanent residency. Where can I learn more about investment and business opportunities in The Bahamas? The Bahamas Chamber of Commerce is an active, non-political agency of professional business people whose role is to promote, foster and protect Bahamian business interests. The office is on Shirley St at Collins Ave, PO Box N-665, tel (242) 322-2145. Other information sources include: - Bahamas Financial Services Board, tel (242) 326-7001. - Bahamas Investment Authority (BIA), tel (242) 327-5970. - Central Bank of The Bahamas, tel (242) 322-2193. - Securities Commission of The Bahamas, tel (242) 356-6291/2. For detailed information, pick up the 2004 edition of the Bahamas Handbook and Businessman's Annual, a comprehensive and authoritative guide to living and doing business in The Bahamas. It's available at most bookstores, or for ordering information, e-mail handbook@dupuch.com |
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