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Financial and tourist
WELCOME BAHAMAS - NASSAU, CABLE BEACH & PARADISE ISLAND - 2004
Financial and tourist industries place Bahamas in enviable position
New Prime Minister forms special ministry to spur financial sector
Much of the recent legislation that benefits investors in The Bahamas can be traced to 2002. When newly elected Prime Minister Perry Christie took office that year, one of his first acts was to establish a new Cabinet post ? the Ministry of Financial Services and Investments.
The move indicated that, as far as the government giving full support to the financial sector and repositioning the industry for growth went, the prime minister meant business. The Ministry of Financial Services and Investments, headed by Allyson Maynard Gibson, would devote full-time to working with and promoting the nation?s financial services sector.
As Maynard Gibson says, ?The Bahamas is in the enviable position of having an economy based on two of the fastest growing industries in the world ? tourism and financial services.?
Bahamas advantages
Most government and business executives today are able to recite the advantages of The Bahamas for potential investors. It goes something like this:
The Bahamas is a mature financial centre, having commenced business in the 1930s. The country offers a stable democratic environment, relief from personal and corporate income taxes, timely reparation of corporate profits, proximity to the US with extensive air and communication links and a pool of skilled financial professionals.
In addition, The Bahamas has an outstanding infrastructure for commercial and industrial activity and has a highly skilled workforce. The professional community of accountants and investment specialists is large, diverse and highly skilled. There is also a full complement of experienced law firms.
Perhaps the nation?s pro-investment attitude was best captured by Maynard Gibson, who proclaimed that, ?We are replacing red tape with a welcoming red carpet. The Bahamas is open for business.?
The following pages provide a sampling of the red carpet treatment in terms of new products and less bureaucracy. For example, the new Investment Funds Act spawned an innovative new style of investment fund, the SMART Fund, with such features as a highly streamlined licensing process. Other legislation includes amendments in the International Business Companies Act, which gives captive insurers an added marketing tool: applicants no longer have to go through exchange control or deal with the Central Bank. Instead, captive companies being formed deal only with the Registrar of Insurance, eliminating some of the frustration of bureaucracy.
You will also find brief accounts of legislative priorities that impact e-business, perpetuities law, segregated accounts companies and purpose trusts.
QJ status maintained
Of signal importance to the financial services industry was the signing of a Tax Information Exchange Agreement (TIEA) with Washington in January 2002. By signing this agreement The Bahamas retained its prized Qualified Jurisdiction (QJ) status, which allows Bahamian-based companies to earn income from US investments without having to pay a 30 per cent withholding tax. The TIEA, which came into force on Jan 1, 2004, applies only to criminal tax matters so it holds no terrors for US citizens investing legitimately in The Bahamas. As an added bonus for signing the TIEA, the US now provides tax concessions to American firms holding conventions here ? a move that is expected to help fill rooms in Bahamian hotels.
Newsworthy events served as a backdrop to all this activity. For instance, on the tourism side, despite the after affects of the 9/11 terrorism that affected travel worldwide, The Bahamas ended 2003 with 4.6 million arrivals, or a 4.3 per cent increase over 2002 levels.
$3 billion in investment
Prime Minister Christie has announced that his government has signed Heads of Agreements for new direct investment or expanded projects representing $3 billion in new resorts and second home communities throughout the islands. The Atlantis resort on Paradise Island continues to grow. Sol Kerzner, the South African hotelier, has announced a US$600-million expansion programme which will bring his total investment in the country to US$1.7 billion. The newest five-star resort in the Out Islands opened its doors in November 2003 ? the Four Seasons located at Emerald Bay, the spectacular 465-acre enclave in Great Exuma. And at Abaco?s exclusive Winding Bay Resort, developer Peter de Savary, who caters to the super-rich, tells of a virtual land rush on the island, with some building sites doubling in price and going for more than $2.5 million since the summer of 2003.
Meanwhile, investment is pouring into Grand Bahama where the Port Authority cites major developments in marine services, real estate, tourism, business services, light industry and in the Grand Bahama Shipyard with two huge floating dry docks and the possibility of another one, capable of handling the world?s biggest ships. The brand new Isle of Capri Casino is now open for business at the Our Lucaya complex and a $30-million project to upgrade the Island?s airport is proceeding on schedule, according to Willie Moss, president of the Grand Bahama Port Authority.
In an overview of The Bahamas economy, James Smith, Minister of State for Finance, said, ?We believe firmly that we have the appropriate mix of policies and programmes to place The Bahamas on a sustainable path of development well into the future.?
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