The National Investment Policy focuses on providing an investment friendly climate, guarantee an acceptable level of economic security and generally foster economic growth and development.

Areas of immediate priority are: the hotel and resort industry, residential and commercial real estate development, time share projects and the development of the family islands (islands in the archipelago other than New Providence and Grand Bahama, with the most popular being: Abaco, Eleuthra and Exuma.) In addition, the Government is seeking opportunities within new industries so that economic diversification can be achieved. This endeavour is supplemented by a progressive immigration policy emphasizing technology transfer.

International investors must submit a project proposal, including a business plan and an economic impact assessment to the Bahamas Investment Authority. If approved, the Secretary to the Investment Board will issue the permit. Certificate of registration or permit (together with acquisition documents upon pruchase or lease of property) must be recorded in the Registrar General’s Department. Capital investments must be at a minimum of $250,000.

National Investment Policy

The National Investment Policy is designed to support an investment friendly environment by outlining the Government's commitment to the operation of a free market economy.Several key conditions that support and fortify the Policy and allow the Government to achieve its stated mandates, include:

1. Political stability and maturity.
2. A safe investment environment, free from expropriation.
3. An independent judiciary and respected legal system based on common law principles.
4. A stable macroeconomic environment balanced with prudent fiscal policy.
5. Availablility of a highly skilled labour force.
6. Essential public services and modern infrastructure.
7. Freedom from capital gains, withholding, inheritance, corporate, personal income, dividend and interest taxes
8. Investment incentive legislation.

Legislation Providing Investment Incentives

Investment incentives such as exemptions from: custom duties on building materials, equipment and approved raw materials, business licensing fees, and real property taxes of periods ranging up to twenty years are provided in the following legislations:

1. The Hotels Encouragement Act;
2. The Industries Encouragement Act;
3. The Bahamas Vacation Plan and Time Sharing Act;
4. The Free Trade Zone Act;
5. The Hawksbill Creek Agreement;
6. The Tariff Act;
7. The Export Manufacturing Industries Encouragement Act;
8. The Agriculture Manufactories Act;
9. The Spirits and Beer Manufacturing Act;and
10. The Family Island Development Act (expired 2003, revised version in progress.)

While there are specific areas targeted for international investment and/or joint ventures with Bahamian participation, there are a number of areas reserved exclusively for Bahamians.

Industries Encouraged For Foreign Investors

Domestic Industries Reserved For Bahamian Nationals

International Treaties For Fostering Economic Growth

Foreign investors operating businesses in the Bahamas may take advantage of the agreements enacted to facilitate international trade between the Bahamas and the respective countries. These agreements eliminate the custom duties on items produced in the Bahamas and imported to the United States, Canada and Europe. The agreements currently in place are:

The Cotonou Agreement 2000: A twenty-year pact between the European Union and the African Caribbean Pacific States. The agreement is significant to the Bahamas because it supports the continued duty-free export of products from the Bahamas to the markets of the European Union.

CARIBCAN 1986: Established by Canada to encourage trade, investment and industrial cooperation with the Commonwealth Caribbean region. The main feature is duty-free access to the Canadian market for most exports from the Commonwealth Caribbean countries if 60% of the ex-factory price to Canada is made up of materials, parts or produce of the country. There are some exceptions such as textiles, clothing and footwear.

Generalized System of Preference (GSP): The GSP allows some 4,300 products into the U.S., duty free from the Bahamas. It requires that the 35% added value be from a single beneficiary country or specified associations of countries. It enables various beneficiary countries to augment their production with skills and material from other trading neighbors, so long as prescribed minimum values are added in the exporting country.

Caribbean Basin Initiative: Allows for the removal of U.S. tariffs on non-traditional industries products shipped from the Caribbean to the United States of America. Some products eligible for duty-free importation into the U.S. include: apparel and other made-up textile items; electronic and electromechanical assembly; data processing/keystroke operations; handicrafts, giftware, and decorative accessories; wood products, including furniture and building materials; recreational items, sporting goods, and toys; tourism; seafood; tropical fruit products; winter vegetables; ethnic and specialty foods--sauces, spices, liqueur, jams, confectionery items, etc.; ornamental horticulture; leather goods; medical and surgical supplies; footwear.

Tax Information Exchange Agreement 2002 (TIEA): The TIEA contains a provision that came into force on January 1, 2006, that allows a United States taxpayer to deduct the cost of conventions and conferences held in the Bahamas from taxable income.

External Sources Providing Investment Protection

The Bahamas is a signatory to the International Convention on the Settlement of Investment Disputes (ICSID) and adheres to their provisions. The Overseas Private Investment Corporation (OPIC) provides financing and insurance of American investments in the Bahamas. The Canadian Overseas Insurance Program provides insurance of Canadian investments in the Bahamas.