FDI flows over the past three years are at a lower level than at the beginning of the decade. Nonetheless, the Bahamas is the largest host economy among SIDS (small island developing States) in terms of FDI. According to UNCTAD’s World Investment Report 2022, FDI inflows decreased by 60% to USD 360 million in 2021. However, there was an overall rise in greenfield projects (which totalled USD 43 million) and international project finance deals. The stock of FDI increased slightly in 2021 to USD 26,3 billion. Major investments in recent years include a collaboration between US giant MasterCard and the Central Bank of The Bahamas to launch the Bahamas Sand Dollar, the first digital currency of its kind, and the investment of USD 262 million made by the American company CGrowth Capital in the construction of a refinery in 2022.
The Government aims to keep a stable and attractive investment climate to facilitate the ease and effectiveness of doing business in the Bahamas, so in recent years, registering a new business has been easier and taxes have decreased. The country can offer investors a stable and democratic political environment, attractive tax laws, well-developed infrastructure, a qualified workforce and a geographical proximity to the United States. On the other hand, the main weaknesses of the islands are the lack of economic diversification and the small scale of its domestic market. Despite the strenuous will of the government to ensure the country's economic sovereignty, the dependence of the archipelago on foreign investment remains significant. The Bahamas has an investment promotion strategy that includes multiple government agencies working to attract foreign direct investment. Foreign investments are subject to governmental approval, with the Bahamas Investment Authority (BIA) being responsible for approving all FDI in every sector of the Bahamian economy. The BIA functions as the investment facilitation agency and acts as a ‘one stop shop’ to assist investors in navigating a potentially cumbersome approvals process. The tourism sector attracts the majority of FDI inflows, which primarily comes from the United States, Canada, and China. The latter, in particular, has become a major player and is planning to finance new infrastructure projects in the country. Investments range from services to billion-dollar resort developments to million-dollar homes on the major islands of the archipelago.
Bahamas | Latin America & Caribbean | United States | Germany | |
---|---|---|---|---|
Index of Transaction Transparency* | 3.0 | 4.1 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 5.2 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 8.0 | 6.7 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
FDI Inward Flow (million USD) | 897 | 1,185 | 1,255 |
FDI Stock (million USD) | 26,072.5 | 27,257.6 | 28,512.4 |
Number of Greenfield Investments* | 1.0 | 4.0 | 2.0 |
Value of Greenfield Investments (million USD) | 5 | 81 | 38 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Income tax | The Bahamas does not levy personal income tax |
Bahamas | Latin America & Caribbean | United States | Germany | |
---|---|---|---|---|
Number of Payments of Taxes per Year | 20.0 | 28.2 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 155.0 | 327.5 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 33.8 | 33.8 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
Setting Up a Company | Bahamas | Latin America & Caribbean |
---|---|---|
Procedures (number) | 7.00 | 8.00 |
Time (days) | 11.50 | 25.22 |
Source: Doing Business.
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Latest Update: September 2023