Martina Reichardt - Broker

The Bahamas Investor Information

Property Transactions

Real estate agents charge a 10% commission on the sale of an undeveloped property. The commission for developed property, whether residential or commercial, is 6%.

Stamp Duty

As of July 1, 2018 stamp duty rate is 10% of all Property transactions over $100,000. The Vendor and Purchaser each pay half of the stamp duty unless otherwise agreed.

In property sales, sellers generally pay commission and legal fees. Sometimes property owners list a net sales figure, in which case the agent adds those charges to the price quoted to prospective buyers.

Stamp duty on mortgages is payable at a rate of 1% on the amount borrowed. The Bahamas Bar Assoc. follows a minimum scale fee for conveyances and mortgage transactions at 2.5% of the sale price plus out-of-pocket expenses.

Value Added Tax (VAT)

As of January 1, 2015, VAT charges of 7.5% will be levied on commissions, legal fees, appraisals, property transactions over $100,000, as well as rentals and Common Area Maintenance (CAM).

First-Time Homeowners

International Persons Landholding Act, 1993

Amended in 2007, The International Persons Landholding Act, 1993, made it easier for non-Bahamians and companies under their control to own property.

A non-Bahamian or permanent resident who purchases or acquires an interest in a condominium or property to be used by him as an owner-occupied property, or for construction of premises to be used as an owner-occupied property, must apply to the Secretary to the Investments Board (IB) to register the purchase. Application for Certificate of Registration Form1 must be filed with the Bahamas Investment Authority (BIA), Office of the Prime Minister. Contact BIA for a complete list of the required documentation that must accompany the application along with the original receipt from the Public Treasury showing payment of the requisite fee of $250.

Upon receipt of the above, the acquisition is registered and a certificate of registration issued.

A permit to acquire property is required if the property is undeveloped land and the purchaser would become the owner of two or more contiguous acres. A permit is also required if the non-Bahamian intends to acquire land or an interest therein by way of freehold or leasehold when the acquisition is not in accordance with item 1.

Non-Bahamians who own homes in The Bahamas may apply to the Director of Immigration for an annual homeowner’s card that entitles the owner, spouse and dependent children to enter and remain in The Bahamas for the duration of the validity of the card (one year). This facilitates entry - it does not confer resident status in The Bahamas.

All applications for permits, Form 3, are to be submitted to BIA for consideration by the IB. If approved, a letter is issued and payment of the requisite fee of $500 is paid at the Public Treasury and the original receipt returned to BIA. The permit is then issued by the Secretary to the Board. Certificate of registration or permit (with acquisition documents) must be recorded in the Registrar General’s Dept.

Fee Schedule

  • Certificate of registration - $250
  • Permit - $500
  • Annual homeowner’s residence card – $250

Real Property Tax

Bahamians and non-Bahamians owning real property in The Bahamas must pay property tax. Returns are due on or before December 31 each year, and are filed with the Chief Valuation Officer. Taxes are paid to the Public Treasury and can be paid at the property tax office or online at www.bahamasgov.bs. Rates are as follows:

Property Tax Rates

Owner-occupied residential property as of July 1, 2015.

  • The first $250,000 of market value - Exempt
  • On market value over $250,000 and up to $500,000* - 0.625%
  • Over $500,000 - 1% (subject to a maximum of $50,000) %

Vacant/Unimproved Land (non-Bahamians)

  • First $7,000 of market value - $100
  • Portion over $7,000 - 1.5%

All other properties/commercial

  • First $500,000 of market value - 0.75%
  • Market value over $500,000 - 2%

Residential Property (property not owner-occupied, comprising not more than four units (exclusive of outbuildings), used solely as a dwelling, beneficially owned by Bahamians and from which no commercial enterprise is conducted.

  • Property valued under $75,000 - $300
  • Property valued over $75,000 - 0.625%

*First-time homewoners exempt for 5 years from date of occupancy or conveyance.

Persons owning real property in the Bahamas are entitled to make application to the Real Property Tax office for reassessment once every 5 years. Property owners can have a law firm act on their behalf or undertake the application themselves. Requirements for reassessment include presenting a copy of the most recent tax bill, a current appraisal from a licensed reputable appraiser, completion of the Property Tax Application Assessment Form (available at the property tax office or online at www.bahamas.gov.bs), along with the submission of a signed letter from the owner of record (or their attorney) requesting the reassessment of annual real property tax liability. A 10% discount is applicable on accounts that are current and paid in full by March 31 in any year.

At the time of closing a sale transaction, the attorney for the new owner of the real property registers the sale with the property tax office. A current appraisal is often requested and presented along with the registration.

Our Appraisal Team can provide services to address property tax assessment concerns.

 

Outstanding Property Taxes

The Treasurer now has the power to sell the unimproved/vacant land where real property taxes are in arrears and unpaid for at least 6 months after the expiration of 30 days from becoming due.

New surcharge of 5% on all outstanding real property taxes owing after 31st December 2009.

Planning & Subdivision Act, 2010

As of 1st January, 2011, homeowners occupying single-family homes must obtain proper business licenses and home renovation permits to alter their homes for commercial purposes. Land to be used for commercial purposes must dedicate a portion of the parcel for a park, recreation, and open space.

Approval Authority

No development of a land can be commenced or carried on unless the developer obtains (i) Land Use Plan Approval (ii) Zoning Bye-law Approval (iii) Site Plan Approval (iv) Zoning Compliance (v) Architectural Design Approval (vi) Subdivision Approval and (vii) Severance Approval.

Subdivision Approval

No lots can be sold, agreed to be sold, or conveyed in a subdivision that has not received prior approval. In order to obtain approval the following must be in place (i) every road must be in accordance with the Land Use Plan; (ii) all lots must conform to the Zoning Bye-Law; (iii) submitted plans must indicate grading and contours of the land and the provision for the adequate disposal of surface and wastewater, installing of all utilities, location of sidewalks and street lighting; and (iv) every lot must be surveyed with all markers in place on the ground.

All subdivision roads other than private roads must be completed and conveyed to the Government within one (1) year from the date of approval. All approved roads must be constructed to the satisfaction of the Minister who may also enter into agreements with respect to the construction, maintenance, and operation of private roads including private water and sewerage works or other private road services.

Any person who breaches the subdivision requirements may on summary conviction be fined twenty thousand (B$20,000.00) dollars or sentenced to one (1) year in prison.

Property owners are permitted to divide a suitable parcel of land up to four (4) times without requiring subdivision and land use plan approval by making application for severance to the Town Planning Dept.

The Investment Environment

To support an investment-friendly climate and foster the economic growth and development of The Bahamas, the Government will provide:

A politically stable environment conducive to private investment.

An atmosphere where investments are safe and the expropriation of investment capital is not considered.

A legal environment based on a long tradition of parliamentary democracy, the rule of constitutional and statute laws and where security of life and personal property are guaranteed.

A stable macroeconomic environment bolstered by a prudent fiscal policy, a stable exchange rate, flexible exchange control rules and free trade.

An environment in which freedom from Capital Gains, Inheritance, Withholding, Profit Remittance, Corporate, Royalties, Sales, Personal Income, Dividends, Payroll and Interest taxes is ensured.

Essential public services, a well-equipped police constabulary, modern health and education facilities and other social services.

Dependable public utilities.

Essential public infrastructure, such as roads, ports, and airports.

The Government is also committed to enhancing the image of The Bahamas as an international financial center. To this end the Government will:

Maintain The Bahamas as a leading financial services centre.

Monitor all developments in the international financial markets and amend any rules, regulations or legislation that would preserve and enhance the competitiveness of the financial services sector of the Bahamian economy.

Ensure the operation of a clean financial centre with specific rules and regulations to prevent the laundering of criminally derived assets.

Support The Central Bank of The Bahamas in its commitment to bank supervision and promoting high standards of conduct and sound banking practices.

Support the self-regulatory measures of the Association of International Bank and Trust Companies (AIBT), particularly, the established code of conduct for bank and trust companies.

Continue enforcement of our bank secrecy laws.

Investment Incentives

Investment incentives under the following Acts include exemption from the payment of customs duties* on building materials, equipment and approved raw materials and real property taxes for periods up to 30 years:

  • Export Manufacturing Industries Encouragement Act
  • Industries Encouragement Act
  • Agricultural Manufacturers Act
  • Tariff Act
  • Hotels Encouragement Act
  • Spirits and Beer Manufacturers Act
  • Family Island Development Encouragement Act
  • Free Trade Zone Act
  • *Customs duty exemptions do not apply to personal consumables The following trade arrangements are also in effect:
  • Cotonou Agreement
  • CARIBCAN
  • Carribean Basin Initiative
  • Administration of Policy
  • The National Economic Council (NEC), headed by the Prime Minister, is responsible for executive management of the investment policy. Operational activities are the responsibility of the Bahamas Investment Authority (BIA).
  • Establishing a Business in The Bahamas
  • An international investor seeking to do business in The Bahamas should submit to BIA a project proposal providing the information indicated in the following Project Proposal Guideline.

Project Proposal Guideline

  • Name and address including telephone/fax.
  • Executive summary of the project.
  • Type of Business – whether share company, partnership, individual or joint venture.
  • Principals – investors, major beneficial shareholders, including their dates and places of birth, as well as passport or social security numbers.
  • Proposed location.
  • Land requirements.
  • Start-up date.
  • Employment projections – number of Bahamian and non-Bahamian employees.
  • Management/personnel requirement – years of experience, training and work permits* for key personnel.
  • Financial arrangements for project, including bank reference.
  • Environmental impact – toxic input.
  • Total capital investment in project with a breakdown of items and start-up cost. Minimum investment is $500,000.

*Necessary work permits for key personnel will be granted. Businesses requiring permit for persons other than key personnel are encouraged to consult BIA in advance.

General

To ensure the maximum benefit to The Bahamas from the National Investment Policy, certain immigration provisions will apply:

Permanent Residence

Accelerated consideration of applications for permanent residence is now provided to purchases of homes valued at $1.5 million or more.

Access to Credit Facilities of the Bahamas Development Bank

The Bahamas Development Bank was created to assist Bahamians in establishing new businesses or expanding existing concerns through the provision of concessionary funding and technical assistance, for projects which generate jobs and which contribute to the economic growth and development of The Bahamas.

Areas Targeted For Overseas Investors

  • Touristic resorts.
  • Upscale condominium, timeshare and second home development.
  • Marinas.
  • Information/data processing.
  • Assembly industries.
  • High-tech services.
  • Ship registration, repair and other ship services.
  • Light manufacturing for export.
  • Agro-Industries.
  • Food Processing.
  • Mariculture.
  • Banking and other financial services.
  • Captive insurance.
  • Aircraft services.
  • Pharmaceutical manufacture.
  • Offshore medical centres.

Areas Reserved For Bahamians

  • Wholesale and Retail Operations*.
  • Commission agencies engaged in the import/export/trade.
  • Real estate and domestic property management agencies.
  • Domestic newspapers and magazines.
  • Domestic advertising and public relations firms.
  • Security services.
  • Distribution of building supplies.
  • Construction companies, except for special structures for which international expertise is required.
  • Cosmetic/beauty establishments.
  • Shallow water scale-fish, crustacea, mollusc and sponge-fishing operations.
  • Auto and appliance service operations.
  • Public transportation.

*International investors may engage in the wholesale distribution of any product they produce locally.

Immigration, Residency & Employment

Immigration

The government’s immigration policy is aimed at ensuring the reasonable security, well-being and economic progress of The Bahamas and its people. The government gives consideration to citizenship, permanent residence and work permits for non-Bahamians provided there is compliance with the immigration laws of The Bahamas and policies of the government. Accelerated consideration is given to applications for permanent residence by major international investors with minimum investment of $750,000 and to owners of residences valued at $1.5 million or more.

As The Bahamas is a major tourist destination, every effort is made to keep visitors’ immigration formalities to a minimum. Non-Commonwealth citizens should inquire at the Ministry of Tourism for entry requirements, as they vary from country to country. Visitors must have a return ticket to their homeland or to some other country where they would be accepted. Visitors may visit The Bahamas for up to eight months, provided they can indicate means of financial support for this period. Visitors are not allowed to engage in any form of gainful occupation while in The Bahamas.

Passports

Passports are required by all persons except citizens of the UK and colonies, and Canadian citizens on visits not exceeding three weeks. However, passports are required for re-entry into the UK. British visitors’ passports are accepted.

Passport Requirements For US Citizens

All Americans travelling by air outside of the United States are required to present a passbook/card, or other valid travel documents to enter or re-enter the United States. Effective June 1, 2009, all U.S. citizens are now required to present a passport book, passport card, or WHTI-compliant document when entering the United States.

Please Note: Children under age 16 will be able to continue crossing land and sea borders using only a U.S. birth certificate (or other form of U.S. citizenship such as a naturalization certificate). The original birth certificate or a copy may be used.

Visas

Visas are required by all persons entering The Bahamas except:

  • British Commonwealth citizens and landed immigrants of Canada, for visits not exceeding 30 days if in possession of Form 100.
  • US citizens entering as visitors for a stay not exceeding eight months.
  • Alien residents of the US who, upon arrival, are in possession of their national passports and US alien registration cards and work or residence permits for visits not exceeding 30 days.
  • Nationals of the following countries for visits not exceeding 14 days: Argentina, Boliva, Brazil, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Uruguay and Venezuela.
  • Nationals of the following countries for visits not exceeding three months: Austria, Denmark, Finland, Germany, Israel, Japan, Republic of Ireland, South Africa and Sweden.
  • Nationals of the following countries: Belgium, Greece, Iceland, Italy, Liechtenstein, Luxembourg, The Netherlands, Norway, San Marino, Spain, Switzerland and Turkey.
  • Persons in possession of a valid residence or work permit issued by the Director of Immigration.
  • Persons in transit, including stateless persons in possession of a valid refugee or stateless person’s travel document, provided they are in possession of valid passports and tickets to some destination outside The Bahamas and that their stay, while awaiting onward passage on the first available ship or aircraft, does not exceed three days. This exemption does not apply to nationals of Haiti and the Dominican Republic who must always possess visas even in direct transit by air.
  • Applications for visas from nationals of the Dominican Republic, Haiti, and Colombia, or of Asian countries such as China, including those residing in Hong Kong, North and South Korea, Vietnam, Thailand, and Myanmar (Burma) must be referred to the nearest Bahamian consular office.
  • Visas for persons in the following categories may be granted without prior reference:
  • Nationals of countries not mentioned in the previous paragraph provided that the visit is intended for a period not exceeding three months.
  • Stateless persons who must be in possession of a document permitting re-entry into their country of residence and whose visit is intended for a period not to exceed three months.

Annual Residence Permit

People who wish to reside in The Bahamas on an annual basis may qualify under one of the four categories, subject to formal application and approval process.

Spouse or dependent of a citizen of the Bahamas:

If an applicant is married to a Bahamian citizen, a resident spouse permit may be issued, provided the marriage has existed for less than five years. The resident spouse permit is issued for up to five years. An application can be made for permanent residence or citizenship after five years or more of marriage.

Spouse or dependent of a permit holder:

In addition to the usual application process, a copy of the sponsor’s work permit, permit to reside, certificate of permanent residence or other lawful authority to reside in The Bahamas must be included.

Independent economic resident:

As part of the application process, a financial reference is required from a reputable bank verifying economic worth, and two written character references are required. For an annual residence permit, a head-of-household pays $1,000 and each dependent, $25.

Resident homeowner or seasonal resident homeowner:

Under this category, non-Bahamians who own second homes in The Bahamas may apply to the Director of Immigration for an annual homeowner’s residence card. This card is renewable annually and entitles the owner, spouse and any minor child/children endorsed on the owner’s card when traveling with the owner, to enter and remain in The Bahamas for the validity of the card. The fee is $500 per year and is intended to facilitate entry in The Bahamas with minimal formalities, entitling the holder to visit for a stay of up to one year.

Successful applicants in any of the above categories are not permitted to engage in employment.

Work Permit

An inflexible principle of The Bahamas government is that no expatriate may be offered a position that a suitably qualified Bahamian is available to fill. Employers with vacant posts are required to advertise locally and consult the Bahamas Employment Exchange. If unsuccessful in fulfilling their requirements by these methods, they may apply to the Department of Immigration for permission to recruit outside The Bahamas, following a formal application process. Normally an application will not be processed if the prospective employee is already in The Bahamas having entered as a visitor.

Work permit fees range from $350 to $10,000 per year depending on the category. The Bahamas Immigration Bahamianization Policy, which is critical to the granting of work permits, provides that:

A Bahamian who is qualified to fill a position should be given the position in preference to anyone else.

The Bahamian must be given that job on the same terms and conditions as any expatriate counterpart.

Where the company has a career structure, whether here or abroad, the Bahamian employee must be given the same opportunities for advancement as would be afforded other employees.

The Bahamian employee must be helped whenever possible to broaden skills in a chosen field of endeavour by constant exposure to further training at home and abroad.

Where work permits have been granted, each employer will be required to identify a suitable Bahamian to understudy the expatriate’s position within a reasonable time frame. Genuine investors usually have little difficulty in complying with these requirements.

Employers may obtain permits for longer periods than the standard one-year period in respect to certain key personnel on contract. Such contracts should indicate their renewal would be subject to obtaining the necessary immigration permission, and they may be endorsed to the effect that the employee is expected to train or be replaced by a suitable Bahamian within a stipulated period. Each permit issued by the Immigration Board relates to a specific post. Permits are not altered by the Director of Immigration Board relates to a specific post. However, a person holding a work permit may make application for a new one (his new employer having been unsuccessful in recruiting a qualified Bahamian to fill the post) without having to leave the islands.

The renewal of a permit on expiration is not automatic. Generally, no expatriate may be continually employed in the country in any capacity for more than five years. However, there are likely to be cases of hardship that will be caused by the rigid implementation of this policy; according to the government, this factor will be kept in mind in applying the regulations.

Bonding

A bond is required for each person granted a work permit, if necessary, to repatriate the employee and his dependents and to pay public charges, including medical expenses, incurred by the employee.

Sales Representative Permit

Traveling sales representatives planning to do business in The Bahamas must obtain work permits from the Department of Immigration, and a license from the Licensing Authority.

Permanent Residence

Applicants for this status of residency must be of good character and prepared to show evidence of financial support. Such an applicant must also state that he intends to reside permanently in The Bahamas.

Persons may apply for permanent residence in any of the following categories:

As the spouse of a citizen of The Bahamas, and in the case of a male, he must have been married for not less than five years. Women married to Bahamians may apply at any time after marriage.

As an economic applicant; that is, one who seeks to permanently reside in The Bahamas because of:

Investment – business or home.

Established roots through family ties.

Persons who held valid certificates of permanent residence prior to the Immigration Act, 1975, continue to hold such status automatically.

Business Investors

A business-sensitive legal framework and investor-friendly climate encourages non-Bahamian Investments, supported by the Bahamas Investment Authority (BIA), Ministry of Finance. Although an investor is granted a licence by the Licensing Authority, a work permit must still be sought to be resident and an employee of/or operating business.

Business Licence Fee

The Business Licence Act, 1980, made it mandatory for anyone operating a business aimed at obtaining a turnover to apply for and obtain a licence. Annual licence renewal applications and payments are due every Jan-Apr, and expire on Dec 31. Fees are based, for most business, on their annual gross receipts less the direct cost of producing the turnover. They range from zero for a petty business to 1.5% of turnover or $500,000 (whichever is greater) for a very large business with a high profit. Companies designated non-resident under the Exchange Control Regulations Act pay an annual fee of $300.

Companies licensed under the Banks and Trust Companies Regulations Act, 2000 (which imposes separate fees), do not pay for a business licence. Gas stations pay a fixed fee of .5% of turnover (a business with a turnover of $250,000 per year or more). The Act’s definition of “business” includes all types of manufacturing and commercial undertakings, and covers professions such as law, accounting and medicine. Where a business consists of separate and distinct undertakings, a separate licence must be obtained for each.

A non-Bahamian or a company not 100% Bahamian-owned must first obtain approval from National Economic Council and then wait for the licence application to be approved before commencing operations. Renewal of a non-Bahamian business licence is at the discretion of the Minister of Finance.

Currency

The legally acceptable currency of The Bahamas is the Bahamian dollar. Although all other currencies are foreign, the U.S. dollar is normally accepted throughout The Bahama islands and is on par with the Bahamian dollar. The Exchange Control is administered by The Central Bank of The Bahamas.

Economy

The Bahamas is a stable developing nation, according to a United States of commerce report by the U.S. Embassy in Nassau. The economy is based mostly on tourism and offshore banking and construction. Retail and wholesale distributive trade, manufacture, agriculture and fisheries are the other major sectors of the economy. The Gross Domestic Product (GDP) of The Bahamas was estimated at $7.23 billion in 2007. Tourism generates about 48% of the total GDP and employs about half the Bahamian workforce.

Infrastructure

The Bahamas has a comprehensive and modern infrastructure, particularly on the two major islands, New Providence and Grand Bahama, where most of the population live. Electricity and water are in abundant supply. Telecommunications services and facilities in The Bahamas are state-of-the-art, with direct international links provided through a 100% digital switching system.

Demographics

Starting 60 miles off the coast of South Florida and stretching as far south as Cuba, Haiti and the Dominican Republic, The Bahamas is a coral archipelago of 700 islands, 29 of which are inhabited, and over 2,000 rocks and smaller islands known as “Cays.”

With a population estimated at 371,960 people in 2012, most of whom live on the major islands of New Providence, Grand Bahama, Eleuthera, Abaco, Exuma, Long Island, Inagua, Cat Island, Bimini and Andros as the Bahamas is an English speaking country with a robust workforce.

The term, “Isles of June” has often aptly been used to describe the Bahamas due to its mild climate. Having a tropical maritime wet and dry climate, with slight incursions of mildly polar air, generally the Bahamas does not experience extremes of temperatures. The humidity is fairly high, especially in the summer months, but there is usually a pleasant breeze which lessens the humid effect. Rain showers can occur at any time of the year, but the rainy months are May to October. Rainfall is mainly in the form of heavy thundershowers, which clear quickly.

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