9 Pros and Cons of Doing Business in the Bahamas
A range of islands, a mere 50 miles off the Florida coast, make up The Bahamas. While the Bahamas is known for its blue oceans and sandy seashores, the region also has several other benefits and drawbacks to establishing a business there which we will be discussing here.
Pros of Doing Business in the Bahamas:
1) Business Facilitation:
According to the World Bank’s 2018 Doing Business Index, it takes only 46 days on average to initiate or start a business within The Bahamas. Moreover, a business can be initiated using seven distinct techniques and does not cost much either. Every organization with an annual revenue turnover of at least 100,000 USD must enroll through the legislature and get a duty ID.
2) Focus on economic growth:
The Bahaman government is dedicated to working towards establishing an investment-friendly atmosphere that is ripe with opportunities for both local and overseas investors (we will discuss the investment incentives in The Bahamas later in greater detail). The country has laws that focus on encouraging economic development and growth.
3) Outward Investment:
The government in The Bahamas does not boost or advance outward speculation. Furthermore, there are no restrictions to universal contributions on the Bahaman residents.
4) Judicial Independence and a Legitimate System:
The legal framework in The Bahamas is based upon Great Britain’s common law, and every national not familiar with the details is given full rights through the lawful procedures of the region. Moreover, the courts ensure that every agreement is upheld.
5) Receptive to Foreign Investment:
The Bahamian laws empower and promote Foreign Direct Investment (FDI), particularly in the monetary administrative department and travel industry. The nation provides impetus to the possession of a second home, and currently, has over 400 trust organizations and banks operating inside the wards.
6) Investment incentives:
Every qualifying investor is subject to investment incentives. These incentives include custom duty exemption on construction material that is used for certain types of buildings such as timeshares and hotels; exemption from stamp duty, excise taxes, and property taxes. In general, the government in the Bahamas promotes FDI in the following industries:
- Tourist resorts.
- Condominium and timeshares development.
- Financial and banking services.
- Data processing, technology, and information services.
- Ship repair services.
- Captive insurance.
- Aircraft service.
- Assembly industries.
7) Choice regarding business entity:
Businesses in The Bahamas have a range of options at their disposal while picking a specific kind of business entity for their particular organization. Any company wishing to get itself incorporated in the country can do so under one of the following:
- Domestic Companies (According to the Companies’ Act of 1992).
- IBC (According to the International Business Companies Act of 2000).
In addition, the country also recognizes sole proprietorships, foreign companies, LLCs (Limited Liability Companies), Limited by Guarantee companies, partnerships, limited exempted partnerships, companies with segregated accounts, and more.
8) Tax benefits and robust economic environment:
Those residing in or conducting business in The Bahamas do not need to pay any taxes on income, inheritance, capital gains, or even withholding, payroll, or dividend tax. In addition, the stable and strong business environment and exchange rate, as well as the flexibility in exchange control regulations further benefit businesses and encourage profit repatriation.
Cons of Doing Business in The Bahamas:
1) Language issues:
Over 75% of the Bahamian population is unable to converse in English. So, if you plan to initiate a business in one of the regions that do not use English, you need to make sure that you have sufficient command over the language that is used in the region. For a lot of entrepreneurs, this is an additional burden on top of the many errands and complications associated with starting a business in a foreign land.
2) Logistics issues:
Going for universal business growth might lead to poor strategic productivity. Delivery that commences with a certain nation and then shifts towards others can be time-consuming in itself – not to mention the increased likelihood of postponements.
All nations do not have identical frameworks and assets; sometimes, this makes it tough for an entrepreneur to operate in an unfamiliar country.
To conclude, there are a lot of reasons for you to consider starting a business in The Bahamas. Having said that, there are obviously certain risks and threats associated with starting any venture in a foreign country. The positive aspects include a larger client base, diversification of business risks, improvement in the value of your brand, and the chance to attain new abilities. The risks, meanwhile, include unfamiliar guidelines, strategic problems, and communication difficulties.
To learn more about the business opportunities in The Bahamas – and how you can mitigate the risks – please feel free to contact us.