Generalizes on the best strategy to enter the market, e.g., visiting the country; importance of relationships to finding a good partner; use of agents.
Relationships are critical to doing business in The Bahamas. It is common that a first meeting will be solely focused on relationship building and it may take multiple encounters to build trust and establish a working rapport. Many Americans are familiar with The Bahamas, and most trade between the two countries is supported by longstanding business relationships. Many major retailers and wholesalers in The Bahamas have family and business relationships with their American partners that span decades.
Seek adequate information and resources:
For new entrants, a market visit is strongly recommended to fully assess the market and its potential and to interview prospective partners. Investors are advised to use the U.S. Embassy, the local American Chamber of Commerce (AmCham), and other U.S. or local resources for this purpose. Embassy Nassau represents the U.S Department of Commerce in The Bahamas and offers paid commercial services to U.S. firms.
Local agent/distributor or franchise:
The government encourages local ownership and/or local equity participation and gives this favorable consideration during the investment application process. A local partner can simplify business procedures and provide some level of protection to the investor. Exclusive arrangements, credit terms, and franchising agreements are common business practices.
American companies have historically experienced delays and a slow approvals process for foreign investment and related work permits. Larger foreign investment projects not only require approval by the National Economic Council (NEC), a sub-committee of the Cabinet, but usually also require environmental and economic impact assessments for review by multiple government agencies prior to NEC consideration. Bureaucratic impediments are not limited to the NEC approvals process, and the country continues to lag on international metrics related to the ease of doing business. The Bahamian government has recently strengthened efforts to shorten delays and improve doing business in the country, and the government has pledged to further improve these processes. The Embassy can be contracted for commercial services that may assist in drawing the government’s attention to outstanding approvals.
Bahamas Investment Authority – a “One-Stop Shop”:
The Bahamas Investment Authority (BIA) is the first point of contact for all investors in The Bahamas and serves as a secretariat for the National Economic Council (NEC). Foreign investors are required to submit project proposals for the consideration of the BIA, which then submits a recommendation to the NEC. All applications for foreign investment must be approved by the NEC, which meets regularly to review investment proposals. Domestic investors are not required to apply to the BIA to invest. To improve the application process, fast-track FDI, and mobilize local investments the new administration announced plans to establish the independent agency, Bahamas Invest. Although not fully operational, bureaucratic delays, application functionality, and transparency are expected to improve under this new agency.
Real Estate Investments:
The International Persons Landholding Act of 1993, provides for the sale of real property in The Bahamas to non-Bahamians. Non-Bahamians must register their property with the Foreign Investment Board (FIB). The Board registers the property at the conclusion of the legal process, certifying that their acquisition has been duly registered. Permits are required by non-Bahamians if the property being purchased is greater than two contiguous acres, the intention is to rent out all or a portion of the property, or the property being purchased is for commercial development. The approval to purchase land is within the FIB’s discretion. Investors are strongly encouraged to seek the services of a local attorney to prepare their application and to secure title insurance for any purchase of real estate. Apart from ensuring that the documents of title are properly prepared and in good order, the local attorney gives an Opinion on the title to the property. This Opinion places liability on the lawyer should the purchaser find there is a defect in the title. The Opinion is insured under the indemnity insurance of the law firm.
Proposals for investment that commit to creating jobs, economic diversification, community development, environmental regulations, and the transfer of skills and technology are more favorably viewed during the approvals process.