The Bahamas is a centre for banking and mutual fund administration. The legislation 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 Bahamas was one of the original 15 jurisdictions blacklisted in June 2000 by the Financial Action Task Force as 'non-cooperative' in preventing money laundering. After the Bahamas made a series of wide ranging amendments to its legislation the FATF removed the jurisdiction from the list in June 2001. 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. After a total of 99 licences were revoked by the Central Bank, the total number of bank and trust companies licensees registered in the Bahamas stood at 321 by mid-May 2002. 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. 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.
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.
The Bahamas' Shipping 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 helps investors with projects and grants approvals through co-ordination with other government agencies.
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. Currently, there are seventeen domestic public companies listed on BISX. A listing facility for mutual funds was launched in April 2001.
The Bahamas levies no taxes on capital gains, corporate earnings, personal income, sales, inheritance, or dividends.
The Bahamas Investment Authority
P.O. Box CB-10980
West Bay Street
Nassau, The Bahamas
Phone: (242) 327-5970/4
Fax: (242) 327-5907
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
Tel: (242) 326-7001 or 4
Fax: (242) 326-7007
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
Bahamas Maritime Authority
10 Chesterfield Street
London W1X 8AH
Tel: (171) 290-1500
Fax: (171) 290-1540
Population (2000 estimate)
Nassau (population 171,502)
US$1 = Bahamian $1 (US$ is also legal tender)
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.
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.
Governor-general: Ivy Dumont
Prime minister: Perry Christie
Deputy prime minister, national security: Cynthia Pratt
Attorney general, education: Alfred Sears
Finance minister: James Smith.
Financial services and investments: Allyson Maynard Gibson
Labour and immigration: Vincent Peet
Foreign affairs and public service: Fred Mitchell
Housing and national insurance: Shane Gibson
Tourism: Obie Wilchcombe
Trade and industry: Leslie Miller
Youth, sports and culture: Neville Wisdom
Health and environmental services: Marcus Bethel
Social services and community development: Melanie Griffin
Works and utilities: Bradley Roberts
Transport and aviation: Glenys Hanna-Martin
Agriculture, fisheries and local government: V. Alfred Gray
Free National Movement (leader Tommy Turnquest)
Progressive Liberal Party (leader Perry Christie)
Coalition for Democratic Reform (no seats).
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.
Tourism accounts for 60% of gross domestic product, finance 15%, government 12%, unclassified 7%, manufacturing 3%, and agriculture/fisheries 3%. The Bahamas recorded 4.2 million visitor arrivals (of which three million came by cruise ship) in 2002 and US$1.7 billion in tourist expenditures. The banking sector’s contribution to the economy rose by about 7% to an estimated US$432 million in 2001. The offshore sector spent US$50.9 million in the local economy in 2001 compared to US$115.5 million in 2000.
Gross Domestic Product (2000 est.)
US$4.9 billion (current prices). GDP real growth: 5%
Trade (2002 est.)
Current account deficit: US$188.1 million compared to US$274.0 million in 2001. Merchandise trade deficit: US$1,035.6 million compared to US$1,111.3 million in 2001. Net tourism inflows led a 4.8% increase in the estimated services account surplus to US$1,017.7 million in 2002. Net investment income outflows on the balance of payment accounts were up by 21.2% to US$212.4 million, mainly because of increased profit repatriation by the banking sector. Net transfer receipts were US$42.4 million. On the capital and financial account, the estimated surplus rose to US$417.1 million from US$260.2 million in 2001 –– reflecting a boost in private foreign direct investment and higher short-term inflows through the banking system.
Inflation rate (CPI) (2002)
About 5% of the labour force works in agriculture, 10% in industry, and 85% in services, of which tourism provides 50% of all jobs. The total workforce was estimated at 160,000. Unemployment was estimated at 7% in first quarter 2000.
External reserves (end-2002)
Government accounts (2003-2004)
Revenues: US$1,005 million. Total expenditures: US$1.1 billion made up of recurrent expenditure of US$1,062 million, capital spending of US$145 million. Financial year: July 1 to June 30.
National debt (end 2002)
Government debt: US$1,805 million. Government guaranteed debt: US$401.8 million.
Public holidays (2004)
1 January (New Year’s Day), 9 April (Good Friday), 12 April (Easter Monday), 31 May (Whit Monday), 4 June (Labour Day), 10 July (Independence Day), 2 August (Emancipation or Kadooment Day), 12 October (Discovery day), 25 December (Christmas Day), 26 December (Boxing Day).
GMT minus 5 hours (GMT minus 4 hours in summer)
Government of The Bahamas
Central Bank of the Bahamas
Inter-American Development Bank
International Monetary Fund
US Commercial Service: Bahamas Commercial Guide FY2002.