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The
Bahamas is an archipelago of 700 islands 78 kilometres off the east
coast of Florida, USA with a population of just over 300,000. The two
largest islands are New Providence (where Nassau, the capital city, is
located) and Grand Bahama (where Freeport is located). In July 1973,
the Bahamas became an independent country within the British
Commonwealth.
Online News Sources
The Nassau Guardian - www.thenassauguardian.com
The Bahama Journal - www.jonesbahamas.com
Business Environment
The new Bahamian government in 2002 emphasised its determination to
maintain the Bahamas as a fully compliant international financial
centre. In terms of business and communications infrastructure the
Bahamas are very well developed. The jurisdiction has a comprehensive
regulatory structure and there is a wide range of professional services
in the Bahamas, particularly for banking, mutual fund administration
and trust management.
The legal framework allows for the incorporation of banks, trusts,
insurance and reinsurance entities, mutual funds, international
business companies, limited duration companies and exempted limited
liability partnerships. The Bahamas is a member of the Caribbean
Community (Caricom).
The government has worked hard to avoid use of the Bahamas for money
laundering since being named as one of the original 15 jurisdictions
blacklisted in June 2000 by the Financial Action Task Force ("FATF") as
'non-cooperative' in preventing money laundering. The FATF removed the
jurisdiction from the list in June 2001 after the Bahamas made a series
of wide ranging amendments to its legislation. The Bahamas also was
blacklisted by the Organisation for Economic Co-operation and
Development as one of the 35 jurisdictions considered to be a tax
haven. The jurisdiction was removed from the blacklist in March 2002
after signing a letter of commitment with the OECD agreeing to exchange
information with overseas authorities in criminal tax matters by 31
December 2003 and in civil tax matters by 31 December 2005.
The legislative and administrative changes brought about by the FATF
blacklisting were designed to bring the financial services sector into
compliance with international standards. Nine new laws passed at the
end of 2000 provide for more comprehensive supervision of financial
institutions, corporate service providers and international business
companies. The key changes include giving the Central Bank of the
Bahamas operational independence and the power to issue and revoke bank
and trust licences. The legislation allowed for increased information
sharing with overseas regulators, the upgrading and broadening of
client identification requirements and suspicious transactions
reporting, the establishment of a financial intelligence unit, the
introduction of licensing of financial and corporate service providers
and the abolishment of bearer shares. The legislation also required all
banks to have a physical presence in the jurisdiction. Since the
passage of this new legislation, the total number of banks and trust
companies declined from 415 in 1999 to 284 in 2003 and, as at the end
of March 2005 the number of licenses had decreased further to 262. The
number of registered international business companies fell below 80,000
by the end of 2001 from about 110,000 in 2000, reflecting a reduced
rate of new incorporations and significant unwinding of existing
companies. However this number has since rebounded to 135,043 at the
end of 2004. The number of licensed mutual funds operating from or
within the Bahamas stood at about 700 in December 2001, with managed
assets at about US$90 billion compared to a total of 716 active funds
in 2000, with a slightly higher value of managed assets. However, as at
the end of 2004 the number of active investment funds has increased to
838 with the corresponding value of assets rising to an estimated
$163.4 billion.
The Central Bank of the Bahamas is responsible for regulating banks
and trust companies under the Banks and Trust Companies Regulation Act.
The Securities Commission of the Bahamas (SCB) is responsible for
regulating the securities market under the Securities Industry Act and
the Mutual Funds Act. The Registrar of Insurance regulates the
insurance sector under the Insurance Act and the External Insurance
Act. The Inspector of Financial and Corporate Service Providers is
responsible for activities licensed or registered under the Financial
and Corporate Service Providers Act. The Gaming Board is responsible
for gambling activities. The Compliance Commission is responsible for
enforcing compliance with anti-money laundering rules and regulations
found in the Financial Transactions Reporting Act, 2000, the Financial
Transactions Reporting Regulations, 2000, and the Financial
Intelligence (Transactions Reporting) Regulations 2001.
Announced at the time of the 2005/2006 budget presentation to
Parliament, in June 2005, was the establishment of a Committee
representative of all the financial services regulatory institutions -
the Ministry of Finance, the Central Bank, the Registrar of Insurance,
the Securities Commission and the Registrar General- to consider
options for consolidating these agencies into one or more regulatory
entity.
The Bahamas also offer The Bahamas' Shipping Registry which has been
very successful for larger vessels. The Registry is regulated by the
Bahamas Maritime Authority. Ships are registered under the Merchant
Shipping Act of 1976. A vessel must be engaged in 'foreign going
trade', weigh 1,600 tons or more, and be under 12 years of age to be
registered in the Bahamas. Vessels more than 12 years old may also be
approved for registration, subject to a condition survey. The
operations and income associated with Bahamas flag vessels are
tax-free, as are capital gains on the sale of vessels.
The Freeport Harbour free trade zone is operated by the Grand Bahama
Port Authority. Under the Hawksbill Creek Agreement, businesses in the
free trade zone pay no taxes on profits, capital gains, inheritance,
income, earnings, distributions, gifts, or on imported and exported
goods. In addition, import duties and taxes on real estate have been
waived until 3 August 2015.
The Bahamas Investment Authority was established in 1993 as a
"one-stop-shop" to help investors with projects and grants approvals
through co-ordination with other government agencies.
Taxes
The Bahamas levies no taxes on capital gains, corporate earnings,
personal income, sales, inheritance, or dividends. Annual government
fees are imposed on businesses and there are national insurance, stamp
duties and property taxes. Offshore operations take place through
International Business Companies or other tax-exempt forms.
Stock Exchange
The Bahamas International Securities Exchange Limited (BISX) was
launched in May 2000. The BISX is incorporated as a private company and
is owned by 45 shareholders, including stockbrokers, banks, investment
companies, pension funds, mutual fund administrators, corporations, and
individuals. In November 2003, the BISX gained affliate membership of
the International Organsiation of Securities Commissions(IOSCO). By the
end of 2004 there were 19 domestic public companies listed on the BISX
with a market capitalisation of just over $1.9 billion. In January
2005, the BISX reported that the BISX All Share Price Index appreciated
by 19.7% points to 1,039.4 points, a marked rebound from the narrowed
decline of 2.0% in 2003. The volume of shares traded on the BISX in
2004 were also significantly higher, doubling to 8 million shares in
2004 with the value higher at $24.3million from $7.5million in 2003.
In response to the BISX's mid-2003 lowpoint, the Minister of State
for Finance, James Smith, appointed an ad hoc special committee of
financial experts to make recommendations on the future operations of
the exchange. The report is to be presented to the government in 2005
and it is expected that amongst the recommendations most likely to be
enacted are greater participation in BISX listed stocks by the Bahamas'
National Insurance Board, whose reserve fund amounts to more than $1.23
billion.
A listing facility for mutual funds was launched in April 2001.
Key Contacts
The Bahamas Investment Authority
P.O. Box N-7770
West Bay Street
Nassau, The Bahamas
Tel: (242) 327-5970/4
Fax: (242) 327-5907
Internet: www.opm.gob.bs/bia.php
Bahamas Financial Services Board
Mail: P.O. Box N-1764, Nassau, Bahamas
Location: British American Insurance House, 4th Floor
Marlborough Street and Navy Lion Road
Nassau, Bahamas
Tel: (242) 326-7001 or 4
Fax: (242) 326-7007
E-mail: info@bfsb-bahamas.com
Bahamas International Securities Exchange
#8 Village Gardens
Village Road & Village Gardens
P.o. Box EE-15672
Nassau, Bahamas
Email: info@bisxbahamas.com
Tel: (242) 394-2503
Fax: (242) 323-2320
Internet: www.bisxbahamas.com
Registry of Companies
Rodney E. Bain Building
Shirley & Parliament Streets
P.O. Box N532
Nassau, N.P., The Bahamas
Tel: (242) 322-7147, (242) 322-7160
Fax: (242) 322-5553
Securities Commission of the Bahamas
3rd floor, Charlotte House
Shirley & Charlotte Streets
P.O.Box N-8347, Nassau, The Bahamas
Tel: (242) 356-6291/2
Fax: (242) 356-7530
email: secbd@batelnet.bs
Internet: www.seb.gov.bs
The Bahamas Maritime Authority
Post Office Building
P.O.Box N4679
Nassau, The Bahamas
Tel: (242) 394 3024
Fax: (242) 394 3014
email: nassau@bahamasmaritime.com
Internet: www.bahamasmaritime.com
Key Stats
Country Name: The Bahamas
Population: 301,790 (July 2005 estimate) mostly concentrated in Nassau
Capital: Nassau
Currency: US$1 = Bahamian $1 (US$ is also legal tender)
Legal system: Based on English common law. The Bahamas has a
magistrates court, a Supreme Court and a Court of Appeal. Final appeals
go to the Privy Council in London.
Government: An independent parliamentary democracy. The British
monarch is the formal head of state and is represented by a
governor-general. The bicameral parliament is made up of a lower House
of Assembly of 40 representatives elected directly every five years,
and a 16-member Senate appointed by the governor-general in
consultation with elected political parties. The prime minister is the
head of the executive branch and heads a cabinet with a minimum of
eight other ministers, one being the attorney general.
Executive
Governor-general: Ivy Dumont
Prime Minister: Perry Christie
Cabinet: appointed by the governor general on the prime minister's recommendation.
Political parties:
Free National Movement (leader Tommy Turnquest)
Progressive Liberal Party (leader Perry Christie)
Coalition for Democratic Reform (no seats).
Elections:
In the 2 May 2002 general elections the opposition Progressive
Liberal Party won 29 out of 40 seats, defeating the government of the
Free National Movement. The PLP won 50.8% of the vote, while the FNM
received 41.1% of the vote and seven seats. Four independents were
elected to the House of Assembly.
Time
GMT minus 5 hours (GMT minus 4 hours in summer)
Public holidays (2005)
1 January (New Year’s Day), 3 January (New Year's Holiday), 25 March
(Good Friday), 28 March (Easter Monday), 16 May (Whit Monday), 3 June
(Labour Day), 10 July (Independence Day), 1 August (Emancipation or
Kadooment Day), 10 October (Discovery day), 25 December (Christmas
Day), 26 December (Christmas Holiday) 27 December (Boxing Day).
Participation in International Organisations: ACP, C, Caricom,
CDB,FAO, G-77, IADB, IBRD, ICAO, ICC? (signatory), ICFTU, ICRM, IFC,
IFRCS, ILO IMF, IMO, Interpol, IOM, IOC, ITU, LAES, MIGA, NAM, OAS,
OPANAL, OPCW (signatory), UN, UNCTAD, UNESCO, UNIDO, UPU, WCO, WHO,
WIPO, WMO, WTO (observer)
Economic Overview
The Bahamas is a stable, developing nation with an economy heavily
dependent on tourism and offshore banking. Tourism accounts for more
than 60% of GDP. The Bahamas recorded 5 million visitor arrivals (of
which 3.6 million came by cruise ship) in 2004 and US$1.8 billion in
tourist expenditures. Financial services constitute the second most
important sector of the Bahamian economy, accounting for about 15% of
GDP. Manufacturing and agriculture together contribute approximately
10% of GDP and show little growth despite government incentives aimed
at those sectors. Overall growth prospects in the short term rest
heavily on the fortunes of the tourism sector. In addition to tourism
and banking the government supports the development of e-commerce.
Gross Domestic Product: purchasing power parity - $5.295 billion (2004 est.). 3% real growth (2004 est.)
US$4.9 billion (current prices). GDP real growth: 5%
Budget: revenues: $1 billion
expenditures: $1 billion, including capital expenditures of $106.7 million (FY03/04)
Inflation rate: 1.2% (year ending September 2004)
Labour Force: About 5% of the labour force works in agriculture, 5%
in industry, and 90% in services, of which tourism provides 50% of all
jobs. The total workforce was estimated at 156,000. Unemployment was
estimated at 10.2% in 2004.
Financial Year: April - March
Restaurant Guides
We recommend:
Graycliff Restaurant- Phone 242-322-2796. 8-12 West Hill Street, Nassau. www.graycliff.com
Chez Willie - Phone 242 -322- 5364 West Bay St Nassau. www.chezwillierestaurant.com
Cafe Matisse -Phone 242- 356-7012 Bank Lane at Bay st, just north of Parliament Square, Nassau.
Ferry House - Phone 242- 373-1591. Port Lucaya, Lucaya, Grand Bahama Island.
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