Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports
At its closest point, The Bahamas is less than 50 miles from the east coast of the United States and sits on major international shipping routes. There are competitive daily shipping options and regular freight services from Port St. Lucie, West Palm Beach, Jacksonville, Port Everglades, and the Port of Miami, and airfreight options from both Ft. Lauderdale and Miami. Most goods enter through the Nassau Container Port at Arawak Cay and are redistributed throughout the country via importers, distributors, and agents. Major resort hotels import materials and supplies directly.
Inter-island trade is supported by a government subsidized mailboat service. Both the government-owned national airline BahamasAir and privately owned airlines provide regular service to all major islands. The country has 27 ports of entry, numerous airstrips, and rural landing ramps to support inter-island trade.
Using an Agent or Distributor
Although the use of an agent or distributor is not required, it is highly recommended. A local representative can help navigate the complex import procedures and local business customs. Agents and distributors can also help position products in the market and provide effective and responsive after-sales service.
Local distributors purchase directly from U.S. businesses and resell in The Bahamas with the parties formulating their own terms and conditions of agreement. An attorney is recommended when negotiating contract terms. Given the small size of the market, local distributors may request exclusive distribution rights and expect to negotiate credit terms and marketing support.
The U.S. Embassy can help U.S. exporters find agents and distributors through the following fee-based services:
International Partner Search (IPS): This service helps U.S. companies find local partners and licensees abroad. The IPS provides a report on up to five agents, distributors, manufacturer’s representatives, or other strategic partners who have expressed an interest in a company’s products or services.
Gold Key Services (GKS): This service consists of a survey of potential representatives or customers based on the client’s requirements, as well as four to six pre-arranged appointments per day with potential prospects.
Establishing an Office
Under the Bahamian Companies Act, international businesses seeking to establish a physical presence in The Bahamas must incorporate within the jurisdiction or register as a foreign company with the Office of the Registrar General. Foreign investors must meet a minimum capital investment of $500,000 and the proposed investment must not be in an area reserved for Bahamian participation unless otherwise approved. The use of a local attorney is required.
All foreign investors seeking to do business in The Bahamas are required to submit a project proposal and application to the Bahamas Investment Authority (BIA). The BIA reviews the application and forwards its recommendation, to the National Economic Council (NEC) for final determination. Depending on the nature or type of business, the BIA may request that additional ministries or governmental departments review the application. Once the NEC is satisfied that all requirements have been met, the BIA will communicate with the investor in writing. The turnaround time for a decision on an investment proposal can take as long as 12 months. Domestic investors are not required to make an application to the BIA as a prerequisite to investing in The Bahamas.
Additional information is available on the BIA website. BIA can be contacted at:
Director, Bahamas Investment Authority
2nd Floor Cecil Wallace-Whitfield Centre
West Bay Street
P.O. Box CB-10980
Nassau, The Bahamas
Tel: (242) 327-5826/9
Fax: (242) 702-5500/3
There are many successful U.S. franchises in The Bahamas. The franchisee is expected to register a local company to assume the rights to operate in The Bahamas. There are no specific laws that regulate the operation of a franchise and there is a normal business relationship with the locally registered entity and the franchise headquarters. Most successful franchises benefit from brand name recognition. Consumption patterns in The Bahamas are similar to those of the United States, especially those of south Florida, a frequent travel destination of Bahamians.
Restaurant franchises are particularly successful, and include Pizza Hut, Burger King, McDonalds, Wendy’s, Subway, Sbarro, Cinnabon, Mr. Pretzel, Jamba Juice, Tortuga Rum Cake, Domino’s Pizza, Dunkin’ Donuts, Popeye’s Chicken, Dairy Queen, Pollo Tropical, KFC, Carmines, Marco’s Pizza, Lil Caesars, Starbucks, and more. Other businesses operating under franchise agreements include automotive aftermarket services, accounting services, movie theaters, aviation fixed base operations, electronics, cosmetics, dry cleaning, specialized tutoring, car rental, mailing, and business support services. Additionally, several major U.S. hotel chains or management companies are active in The Bahamas.
Bahamian government policy encourages local ownership of franchises with most sold to local operators under the terms and conditions of the international franchise agreements. There is no impediment to the repatriation of profits, franchise fees, or royalties to the United States.
With over 75 percent of the population having direct access to high-speed internet, internet and mobile device marketing is popular in The Bahamas. Social media plays an important role in direct marketing.
The government encourages international investors to establish joint ventures with local partners, with investors free to make that determination. Investors are advised to vet their potential partners.
Joint venture firms are eligible to access funding from The Bahamas Development Bank (BDB). Bahamians may borrow a percentage of their contribution from BDB or the domestic capital market. Once established, the joint venture is free to raise capital and access local financing sources.
There are several international express delivery services, including DHL, FedEx, UPS, Blue Postal, and Bahamas Express Couriers. Many companies have established independent shipping capacity and most goods purchased are delivered in The Bahamas within 48 hours. Bahamians routinely use the services of local direct mail operators to have purchases picked up in-store in the United States or from a Florida U.S. Postal Service mailbox. Operators deliver items to a central location in The Bahamas where customers can pick up them up and pay for applicable shipping costs, duties, and taxes. The cost for shipping services varies and there is a growing number of firms offering these services.
U.S. companies and investors are advised to vet their potential local partners carefully and conduct legal and financial due diligence before completing a commercial transaction or formalizing an agreement. This is important, as while the court system is fair, litigation can be expensive and relatively slow. Some U.S. companies doing business in The Bahamas have experienced problems collecting payments in a timely fashion.
There is no local equivalent of a Dunn and Bradstreet to check the bona fides of potential agents and customers, and due diligence can be time consuming. There are few sources of independently verifiable information about companies and individuals in the country. The national press is independent and major dailies maintain searchable web archives. Local attorneys, professional service providers, or other Bahamian contacts may also be able to assist. U.S. companies may request bank and trade references from potential partners.
The U.S. Commercial Service can assist in providing an International Company Profile (ICP) on the prospective local agent or importer, including commercial and financial reports. Please access information on the U.S. Commercial Service.
Companies may also obtain information from:
The Bahamas Chamber of Commerce and Employers Confederation
Shirley Street and Collins Avenue
P.O. Box N-665
Tel: (242) 322-2145
Information on mortgages, security interests in personal property, and corporate document filings may be obtained from:
The Registrar General Department
#50 Shirley Street
P.O. Box N-532
Tel: (242) 322-3316