Baamas: Investir

FDI in Figures

The Bahamas is the second-largest host economy among SIDS (small island developing States) in terms of FDI. According to UNCTAD’s World Investment Report 2023, FDI inflows stood at USD 1.25 billion in 2022, up by 5.9% year-on-year, mainly due to intracompany loans. At the end of the same period, the total stock of FDI stood at USD 28.51 billion, equivalent to around 218.7% of the country’s GDP. The tourism sector attracts the majority of FDI inflows, which primarily comes from the United States, Canada, and China. The nation enforces a stringent USD 500,000 minimum requirement for foreign capital investments and it attracted FDI particularly from companies affiliated with or supported by the People's Republic of China. Over the past decade, the tourism sector has notably benefited from substantial investments from PRC-based entities. In 2022, The Bahamas emerged as a fintech hub, championing its central bank-backed digital currency and favorable regulatory landscape under the Digital Assets and Registered Exchanges (DARE) Act. Although Bahamas-based FTX faced closure in December 2022, interest from fintech and blockchain firms remains strong. The government aims to broaden the economy by encouraging investment in niche tourism, renewable energy, manufacturing, digital assets, technology, agriculture, fisheries, and extractive industries.

The Bahamas offers several favorable aspects for investment, including political stability, a parliamentary democracy, an English-speaking workforce, a robust financial services sector, well-established rule of law, contract enforcement, an independent judiciary, and strong consumer buying power. However, challenges include limited transparency in government procurement, labor shortages in specific industries, elevated labor expenses, bureaucratic and inefficient investment approval procedures, protracted legal dispute resolution, internet connectivity issues on smaller islands, and high energy prices. The government maintains a non-discriminatory approach to investors, granting equal access to incentives such as land grants, tax concessions, and direct marketing and budgetary support, regardless of nationality. 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. Several sectors have been reserved for Bahamian Nationals only. The Bahamas ranks 30th among 180 economies on the Corruption Perception Index 2023 and 61st out of 184 countries on the latest Index of Economic Freedom.

Country Comparison For the Protection of Investors

	Bahamas	Latin America & Caribbean	Estados Unidos	Alemanha
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	2020	2021	2022
FDI Inward Flow (million USD)	897	1,185	1,255
FDI Stock (million USD)	26,072.5	27,257.6	28,512.4
Number of Greenfield Investments*	1.0	4.0	2.0
Value of Greenfield Investments (million USD)	5	81	38

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.

Tax Rates

VAT: 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.

	Bahamas	Latin America & Caribbean	Estados Unidos	Alemanha
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

Setting Up a Company	Bahamas	Latin America & Caribbean
Procedures (number)	7.00	8.00
Time (days)	11.50	25.22

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Baamas: Investir

FDI in Figures

Country Comparison For the Protection of Investors

Tax Rates

Individual Taxes

Country Comparison For Corporate Taxation

Investment Opportunities

Business Setup Procedures