The Bahamas offers attractive features to the potential investor: a stable democratic environment, relief from personal and corporate income taxes, timely repatriation of corporate profits, proximity to the U.S. with extensive air and telecommunications links, and a good pool of skilled professional workers. The Government of The Bahamas welcomes foreign investment in tourism and banking and has declared an interest in agricultural and industrial investments to generate local employment, particularly in white-collar or skilled jobs. Despite its interest in foreign investment to diversify the economy, the Bahamian Government responds to local concerns about foreign competition and tends to protect Bahamian business and labor interests. As a result of domestic resistance to foreign investment and high labor costs, growth can stagnate in sectors which the government wishes to diversify.
The Bahamas has no income tax, corporate tax, capital gains tax, value-added tax (VAT), or wealth tax. Payroll taxes fund social insurance benefits and amount to 3.9% paid by the employee and 5.9% paid by the employer. In 2010, overall tax revenue as a percentage of GDP was 17.2%.
The Bahamas has a total population of 347,176, of which 25.9% are under 14, 67.2% 15 through 64, and 6.9% over 65. It has a population growth rate of 0.925% (2010 est.), with a birth rate of 17.81/1000 population, death rate of 9.35/1000, and net migration rate of -2.13 migrant(s)/1,000 population.
In July 1973, the Bahamas become an independent nation and a Member of the Commonwealth of Nations. The Government is based on the British Constitutional pattern with a Prime Minister, Cabinet of Ministers, an appointed Senate and a House of Assembly elected by the people to control and administer the day to day affairs of the Bahamas. The Head of State is HM Queen Elizabeth II and she is represented by a Governor General. The law of the Bahamas is based on English Common Law and the Court System is also modelled after that of the United Kingdom having Magistrates Courts and a Supreme Court.
Bahamian Dollar is on a par with the US Dollar.
The Bahamas is one of the financial centers of the Caribbean where about 350 banks and trust companies are registered. Financial services account approximately 15% of GDP and are the second most important industry of the country after tourism. The government seeks to attract foreign banks, and financial sector is fully open to foreigners. The Organization for Economic Cooperation and Development (OECD) and other organizations exceptionally pressurize the country to tighten regulation of offshore financial sector. In the mid-60s there are only a few branches of foreign banks on the islands, the tax shelter was extremely low, while the world bank capital operates here now, there is a strong legislation and regulatory structure, comparatively highly skilled laborforce.
The government stability attracts the most prestigious financial institutions in the world. Air service and modern infrastructure contribute to flourishing economic activity, including telecommunications.
Over 60% of all licensed banks in the Bahamas offer trust services in addition to conventional banking. The Central Bank of the Bahamas supervises all financial institutions in a way to create favorable conditions for investment, providing a high standard of conduct banking on the same time according to the Basel committee of the banks control. The Association of International Banks and Trust Companies (AIBT) Code of Conduct also precludes the use of financial transactions for the criminal activities financing and ensures compliance with the principles of bank secrecy.
The companies in Bahamas are regulated by the International Business Companies Act, 2000, Cap.308.