Infrastructure challenges: 

Challenges include electricity rates four times higher than in the U.S., deficiencies in public sector medical infrastructure, and limited internet connectivity on smaller islands.  Several of the 29 inhabited islands and cays lack basic infrastructure.  Recent hurricanes severely damaged the well-developed infrastructure of the country’s second and third economic centers of Grand Bahama and Abaco, although some of this infrastructure has been restored.

Cumbersome approval process for foreign investment: 

Decision-making is highly centralized and the approval process for FDI is sometimes opaque, often protracted, and provides opportunity for political interference.  American companies have cited delays in investment proposal approval.  Government plans to establish an independent investment facilitation agency, Bahamas Invest, have yet to be realized. 

High shipping costs: 

The cost of shipping to the less populated Family Islands is generally higher due to lower volumes of trade and transportation costs.  However, many of these islands benefit from incentives and legislation that waive certain government taxes on business inputs.

High crime rate: 

Crimes against the person increased by 23 percent from 2021 to 2022.  Murders increased by eight percent, armed robberies 34 percent, and reported rapes 15 percent.  Property crimes decreased by nine percent.  U.S. Embassy Nassau has issued several security messages in recent years regarding safety in Nassau and surrounding areas on New Providence Island, as well as on Grand Bahama.  Most incidents involving U.S. citizens residing in The Bahamas are robberies or property crimes.  Armed robbery, property crime, purse snatching, theft, fraud, and to a lesser extent sexual assault remain the most common crimes perpetrated against tourists.  Murders rarely involve visitors to the country.  Drug trafficking continues to be a major concern. 

Relatively high customs tariffs: 

The Bahamas has the highest average duty rate in the Western Hemisphere at roughly 30 percent.  Tariffs on some consumer goods run as high as 65 percent and reach 100 percent on imported items that compete directly with locally produced goods.  Value-Added-Tax on both domestically produced and imported goods and services generates 45 percent of government revenue.   The government has lowered or eliminated some duties to spur economic activity in the construction, agriculture, fisheries, and renewable energy sectors.  Despite the high customs duties, U.S. goods remain in high demand.

Non-tariff barriers: 

The government employs non-tariff barriers to trade including reserving investment in 15 sectors for Bahamians.  Governmental approval is required for foreign investment in these areas, including wholesale and retail operations, real estate and property management services, small-scale construction projects, commercial fishing, and many small business activities.  The government also implements seasonal prohibitions on the import of certain agricultural items that compete directly with domestically produced items.  Market access for U.S. products has not been adversely impacted by the ongoing implementation of health, safety, and quality standards.