Economic Overview & Business Opportunities
What It’s Like to Run a Business in the Bahamas
Thinking of starting a business in the Bahamas? This guide will walk you through the economic overview and business opportunities available.
The Bahamas, a nation that relies heavily on its tourism sector, has a per capita GDP that is the second highest. That is, the second highest among the other English-speaking Caribbean nations. In the Western Hemisphere, it is the only country who isn’t a member of the World Trade Organisation.
Tourism contributes approximately 50% of the country’s GDP. As such, it is responsible for directly and indirectly employing about half of the country’s labour force. As one of the wealthiest countries in the region, the economic overview is optimistic. Since its independence, it has also become a strong, vibrant financial centre.
Why should you choose to do business in the Bahamas? Well, for several good reasons:
Friendly Investment Environment
The country’s Government is committed to encouraging foreign investment in the country. Business opportunities of both local and foreign investors are aplenty, and the laws of the country are now focused on facilitating economic development and growth.
Certain incentives in place means the Bahamas is the ideal spot for both multinational and international businesses. These incentives comprise of exemptions from customs duties if you’re importing raw materials and equipment for the construction of some types of buildings. Examples of these buildings include timeshares and hotels.
Eligible investors will also be able to gain exemption from excise, stamp duty and property taxes. Investors who are keen on utilising these incentives need to apply and obtain approval from the Government.
Popular Investment Industries
The Bahamas government encourages investment and business opportunities in the following sectors:
- Aircraft service
- Assembly industries
- Light manufacturing (export purposes)
- Off-shore medical centres
- Condominium development and timeshare development
- Financial and banking services
- Pharmaceutical manufacturing
Virtually No Tax
Since 1717, individuals and companies have enjoyed virtually no tax doing business in the Bahamas. Instead, a range of excise duties and fees is how the Government earns their revenue. Investors will also be pleased to know that they will not be required to pay the following taxes:
- No capital gains tax
- No inheritance tax
- No withholding tax
- No dividend taxes
- No payroll taxes
The one tax that you must pay is a business license tax. You will also be required to pay VAT taxes on certain goods and services. The rate of VAT paid is 7.5%.
A stable economic overview and environment, stable currency, and stable government make Bahamas an ideal investment destination.
Options of Business Entities
Domestic companies’ business entities in the Bahamas are incorporated under the country’s Companies Act 1992. Alternatively, if you wish to establish a domestic company, you could opt to incorporate under the country’s International Business Companies Act 2000.
Other than that, Bahamas recognises the standard business entity structures, including:
- Sole proprietorship
- Limited liability
- Company limited by guarantee
- Partnerships exempted limited partnerships
- Segregated account company
Ready to Incorporate in the Bahamas?
At 3E Accounting, your success is our priority. With a strong global presence in more than 80 countries, we’ve got the insight and the experience needed to help you navigate your business setup abroad. Give your business it’s best chance of success by working with the right team. For more information about our Bahamas company incorporation services, contact us today.
- The Bahamas Company Setup
- VAT Compliance
- Business Audit
- U.S. Expat Tax Help
- Forensic Accounting