Buying real estate in any country is a challenge. One must thoroughly investigate the legalities, and the overall general safety of doing so.
The Bahamas, and Eleuthera in particular, has long been a safe, secure place to do so. Back in 1992, the government changed the laws to encourage more investment in Bahamian lands by foreigners, and, since then, many foreign investers have come to Eleuthera and benefitted for a variety of reasons:
1) Safe: low crime, especially in Out Islands, like Eleuthera
2) Good infrastructure: roads, health facilities, restaurants, monetary system, banks
3) Taxes: low taxes, no capital gains tax
4) Good attitude of government toward foreign investments
Like in any country, one should hire a local attorney when buying any real estate, especially in a foreign country, and ONLY buy land that has title. The advantage of dealing with a company like HG Chrisite, is that they only deal in lands with good title.
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 cays.
With a population of some
269,000 people, most of whom live on the major islands (New Providence, Grand
Bahama, Eleuthera, Abaco, Exuma, Long Island, Inagua, Cat Island, Bimini and
Andros), and with an adult literacy rate of 95%, The Bahamas, an English
speaking country, has a capable and adable work force.
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.
INFRASTRUCTURE
The Bahamas has
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.
GOVERNMENT
The Bahamas declared
independence from Great Britain on July 10, 1973, a new Constitution became the
supreme law of the land for the Commonwealth of The Bahamas. The Constitution of
the Bahamas proclaims the islands as a sovereign democratic state, sets forth
requirements for citizenship and guarantees fundamental human rights. The
Bahamas retains its ties with the Commonwealth of Nations (formerly the British
Commonwealth) and also retains the British monarch as its head of state. The
Queen is represented in The Bahamas by a Governor General who is appointed and
serves at Her Majestys pleasure.
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.
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 exceeds $3 billion, 60% of which comes from tourism related
activities. The per capita income of the country is $11,000.
NATIONAL INVESTMENT POLICY
Economic Policy
The Government of the
Commonwealth of The Bahamas is committed to building an economic environment in
which free enterprise can flourish; where the Government assumes its proper role
as regulator and facilitator of economic development; where the ideals of
transparency, fair play and equality of treatment are paramount; and a policy
that maintains a stable society in which all people are afforded the opportunity
to realize their maximum potential. In this regard, the National Investment
Policy is designed to support an investment friendly climate; guarantees the
complementarity of Bahamian and overseas investments; fosters appropriate
linkages with all sectors of the economy, in particular, the tourism and
financial services sectors; encourages the exploitation of our natural resources
in an environmentally sound and sustainable manner; provides for the maximum
level of employment; guarantees an acceptable level of economic security and
generally foster the economic growth and development of The Bahamas.
The Investment Environment
To undergrid the National
Investment Policy 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 a considered option;
- 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, an adequately equipped police constabulary, modern
health and education facilities and other social service;
- Dependable public utilities; and
- Essential public infrastructure such as roads, ports and airports.
International Financial Centre
The Government is
committed to enhancing the image of The Bahamas as an international financial
centre. 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
regulation 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, business licensing
fees and real property taxes for periods up to twenty years:
- The Export Manufacturing
Industries Encouragement Act
- The Industries Encouragement Act
- The Agricultural Manufacturers Act
- The Tariff Act
- The Free Trade Zone act
- The Hotels Encouragement Act
- The Spirits and Beer Manufacturers Act
NOTE: Custom duty exemptions do not apply to personal consumables.
- Investors may acquire publicly owned lands for approved developments on
concessionary terms; and
- Acquire low cost space for lease for industrial enterprises.
- Government will provide special training and retraining for Bahamian workers to
ensure the continuing availability of a highly skilled labor force.
Preferential Trade Incentives
Business located in The
Bahamas may benefit from the following preferential trade arrangements:
- The Lome Convention
- General System of Preference
(GSP)
- Caribbean
- Caribbean Basin Initiative
Administration of The
Investment Policy
Executive Management of
the investment Policy is resident in the National Economic Council (NEC), headed
by the prime Minister and operational activities will be the responsibility of
the Bahamas Investment Authority (BIA) or the Investors "One-Stop-Shop".
Establishing a Business In
The Bahamas
An international investor
seeking to do business in The Bahamas should submit to BIA a project proposal,
along with supporting documents. The proposal should provide the information
indicated in the following Project Proposal Guideline.
Project Proposal Guideline
- Name
- Address - include telephone/fax
- Description of Proposal - an executive summary of project
- Type of Business - state whether entity is share company, partnership,
individual or joint venture
- Principals - persons investing in the venture or major beneficial shareholders
- Proposed Location
- Land or Factory Space
- Requirements
- Proposed Start Up Date
- Management/Personnel Requirement - years of experience, training, success of
similar previous or current activity; work permits (if any) required for key
personnel and or non-key personnel
- Employment Projections - number of Bahamian and non-Bahamian employees
- Financial Arrangement - for project include Bank Reference
- Environmental Impact - toxic waste, disposal procedures; toxic input
- Concessions Sought - Customs Duty Exemptions
- Investment Incentive - if applying under a particular Act or programme
- Local Representative - attorney, accountant or agent
General
To ensure the maximum
benefit to The Bahamas from the National Investment Policy, certain immigration
provisions will apply:
1. Work Permits: Necessary
work permits for key personnel will be granted. Businesses requiring permits for
persons other than key personnel are encouraged to discuss these requests with
the Bahamas Investment Authority in advance.
2. International Owners of
Second Homes: Overseas Investors may acquire residential properties in The
Bahamas of up to five acres without prior Government approval. Such acquisitions
are required to be registered in accordance with the International Persons
Landholding Act. Second Home Owners are eligible for a Home Owners Residence
Card, renewable annually. This card will:
- facilitate entry into
The Bahamas, entitle the owner, his spouse and minor children to enter and
remain in The Bahamas for the duration of the validity of the card. Application
may be made to the Director of Immigration.
3. Annual or Permanent
Residence: Accelerated consideration of applications for annual or permanent
residence will be given to: -major international investors; and --fit and proper
owners or residence valued at $500,000 or more.
4. Areas Especially
Targeted for Overseas Investors:
- Touristic Resorts
- Upscale Condominium, Time share and Second Home Development
- International Business Centre
- Marinas
- Information and Data Processing Services
- Assembly Industries
- High-Tech Service
- Ship Registration, Repair and other services
- Light Manufacturing for export
- Agro-Industries
- Food Processing
- Mariculture
- Banking and other Financial Services
- Captive Insurance
- Aircraft Services
- Pharmaceutical manufacture
- Off-shore Medical Centres
NB. This list is not
exhaustive and investors interested in areas not included above are encouraged
to bring their interest to the attention of BIA.
5. Local Partners in Joint
Ventures: International investors are encouraged to establish joint ventures
with Bahamian partners. The choice of such Bahamian partners is in the absolute
discretion of the investor.
6. 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.
- Joint ventures between
international investors and Bahamians are eligible to access funding from BDB.
However, the equity of the overseas investor may not be borrowed from the BDB or
from the domestic capital market. Bahamians may, however, borrow a percentage of
their contribution from BDB or the domestic capital market. An established
joint-venture is not debarred from accessing BDB funds.
7. Areas reserved for
Bahamians:
- Wholesale and Retail
Operations;
- Commission agencies engaged in the import/export/trade;
- Real estate and domestic property management agencies;
- Domestic advertising and public relations firms;
- Nightclubs and restaurants, except specialty, gourmet and ethnic restaurants;
restaurants operating in a hotel, resort complex or tourist attraction;
- Security services;
- Domestic distribution of building supplies;
- Construction companies, except for special structures for which international
expertise is required;
- Personal cosmetic/beauty establishment;
- Shallow water scale-fish,
crustacea, mollusks and sponge-fishing operations;
- Auto and appliance service operations; and
- Public transportation.
International Investors
may engage in the wholesale distribution of any product they produce locally.
Current Real Estate
Legislation, Stamp Duties and Taxes... Yes! You CAN buy real estate in The
Bahamas
In 1994 it became much
easier for non-Bahamians to purchase real estate in The Bahamas.
Effective January 1, 1994,
the government of The Bahamas introduced new legislation to facilitate the
purchase of land in The Bahamas by non-Bahamians. This Legislation is cited as "The International Persons Landholding Act, 1993." The
important
provisions of this Act are as follows:
It provides that a
non-Bahamian (other than a permanent resident or a non-Bahamian acquiring land
or an interest in land under a devise or by inheritance) may purchase a
condominium, or property for use as a single family dwelling or for the
construction of such a dwelling without the need of a permit provided the
property is no more than 5 acres in size. The purchaser must, however, apply to
the Secretary upon the receipt of the respective fee specified in the schedule
shall register the purchase or acquisition in the Register and shall issue a
certificate to the applicant.
A permanent resident may
purchase land without a permit but must also register the purchase on
acquisition as above.
No permit is required by a
non-Bahamian if land or an interest in land is acquired by reason of device or
inheritance but the acquisition must also be registered.
A non-Bahamian (other than
a permanent resident or non-Bahamian acquiring land or an interest in land under
a devise or inheritance) who wishes to acquire five or more contiguous acres of
land in The Bahamas must apply for a permit from the Board on the requisite form
stating the intended use for the land. Otherwise any such acquisition shall be
null and void in the absence of such permit.
The Act exempts banks and
trust companies and insurance companies who acquire interests in land under a
mortgage from the requirement to obtain a permit.
The Act exempts banks and
trust companies and insurance companies who acquire interests in land under a
mortgage from the requirement to obtain a permit. Again, the acquisition need
only be registered.
The Act provides that
certain business leases be registered with the Board where the lease is for 21
years or more. Otherwise, the lease is defective.
The Act provides that the
stamp duty payable by a non-Bahamian is the same as in the case of a Bahamian.
The Act also enables a
non-Bahamian who owns and maintains a home in The Bahamas to obtain an annual
home owner resident card upon application to the Director of Immigration and
payment of the specified fee in the Schedule. This card shall entitle the
applicant, his spouse and minor children (if any) to enter and remain in The
Bahamas for the duration of the card unless their entry is otherwise barred
under the Immigration laws.
SCHEDULE OF FEES
- Application for
registration - $25.00
- Application for permit - $25.00
- Certificate of registration:
a. the value of the property is $50,000 or less - $50.00
b. the value of the property is $101,000 and over - $100.00
- Home owner resident card - $50.00
GOVERNMENT STAMP TAX ON
PROPERTY CONVEYANCES
A graduated tax is payable
on the conveyance of all real property in The Bahamas based on the value as
follows:
- Up to and including
$20,000 - 2%
- From $20,000.01 to $50,000 - 4%
- From $50,000.01 to $100,000 - 6%
- From $100,000.01 to $250,000 - 8%
- Over $250,000 - 10%
This tax is shared equally
(50/50) by the buyer and the seller.
LAWYER FEES
Both the buyer and the
seller are responsible for 2.5% legal fees on the sale of property.
RATES OF TAXES
Effective from January 1, 2003, the rates of tax on real property are as follows:-
- The first $250,000 is tax exempt.
- On that portion in excess of $250,000
and less than $500,000 the rate of tax is ¾ percent of the market
value of the property.
- On that portion in excess of $500,000 the rate of
tax is 1% of the market value of the property.
- The maximum annual tax
will not exceed thirty five thousand dollars.
As of the 1st day of January and shall expire on the 1st day of January 2008:
Every application by a person for the exemption
of stamp duty on instruments relating to the acquisition and mortgage of
real property valued at two hundred
and fifty thousand dollars or less, to be used exclusively by the owner
of such real property as a first time dwelling house shall be made in writing
to the Minister of Finance and such application shall be accompanied by
an
affidavit by such person stating that he intends to occupy and reside in
such house and there is no other house being held on his behalf for which
an exemption
has already been granted.
WHAT YOU NEED TO KNOW ABOUT
IMMIGRATION
Bahamian immigration rules
are designed with the view that everyone wants to immigrate to the tiny Bahamas
- which, if this were to occur, would sink under the weight. Consequently, while
tourism and investment are encouraged, true immigration is possible but tightly
controlled. Visas, work permits and residency permits are available.
General: Everyone entering
The Bahamas MUST fill out an embarkation-disembarkation card usually provided by
the travel agent, airline or ship. Non-residents surrender the specified part
when departing.
VISAS & PASSPORTS NOT
REQUIRED FOR:
-Canadian citizens, United
Kingdom subjects and those of British Colonies unless stay exceeds 3 weeks.
-U.S. Citizens on regularly scheduled airlines, precleared for return at U.S.
Customs and Immigration at Nassau International Airport and Paradise
International Airport. Proof of citizenship is required, however, and may
include: U.S. Passport, even if expired; birth certificate, baptismal
certificate bearing church seal; original naturalization certificates.
Unacceptable documents (except as supporting information): Social security
cards, voters registration cards, membership cards, drivers licenses. Visas are
not required for U.S. citizens entering as bona fide visitors if stays are for
eight months or less.
VISA NOT REQUIRED FOR;
-Canadian Immigrants
possessing Canadian Immigration Record and visa on single visit of less than 30
days.
-US Alien Residents
possessing "Green Card" or U.S. Alien Registration Card, except South
African nationals who always require a valid passport and visa. Transit Without
Visa: Dominican Republic Passports but no visa (Up to 8-month stay): Citizens
of
Belgium, Greece, Iceland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway,
San Marino, Switzerland, Turkey, U.S.; (3 Months or less) Austria, Denmark,
Federal republic of West Germany, Finland, France, Irish republic, Israel,
Japan, Mexico and Sweden; (Not more than 14 Days) Argentina, Bolivia, Brazil,
Chile, *Columbia-if traveling from a U.S. port, unless in transit; Equador,
Guatemala, Republic of Honduras, Nicaragua, Costa Rica, Panama, Paraguay, Peru,
Uruguay, Venezuela and El Salvador.
NO VISA REQUIRED:
Persons possessing a valid
Bahamian residence or work permit from the Director of Immigration; persons in
transit including stateless persons with valid refugee and stateless person
document if they have tickets onward and stay no longer than three days.
*Other restrictions apply.
VISAS REQUIRED:
By All others.
Applications should be made to the nearest Bahamian or British Consular Office.
Citizens of Haiti and South Africa ALWAYS require visas, even in direct transit
by air.
VISAS & PASSPORTS
REQUIRED:
All Communist countries,
Dominican Republic except in transit, Haiti, South Africa. If in doubt, check
with the Immigration Department, P.O. Box N-831. Nassau, The Bahamas. Tel. (809)
322-7530.
MAXIMUM STAY:
8 months with proper
documents including a return ticket and evidence of financial support. Those
wishing longer stays may apply for temporary residence to The Director of
Immigration Department, P.O. Box N-831. Nassau, The Bahamas. Tel. (809)
322-7530. Visitors and temporary residents may not engage in gainful employment
while in The Bahamas.
CITIZENSHIP,
RESIDENCY & WORK PERMITS:
Bahamian Immigration
Department permits are needed for those who wish to reside, work or engage in
business, including selling. Applications must be supported with these
documents: A police certificate covering the last five years or in the UK, a
sworn affidavit of good character; two character references from responsible
persons in the home country or The Bahamas; two full face photographs signed on
the back by the applicant (max. size 3 x 3 inches; min. size 2 x 2 inches) and a
valid health certificate not more than 30 days old.
CITIZENSHIP:
The Bahamas Constitution
and the Bahamas Nationality act, 1973, detail the acquisition and loss of
citizenship. Persons born in The Bahamas before July 10, 1973, or outside The
Bahamas to a Bahamian farther became Bahamian Citizens on Independence Day, July
10, 1973, as did most persons registered as a citizen of The Bahamas under the
British Nationality Act of 1948. Persons born in The Bahamas after Independence
are citizens if either parent is a Bahamian citizen and are entitled to register
as a citizen if born here, subject to interests of national security or public
policy, by making application within 12 months after his or her 18th birthday.
Persons born legitimately outside The Bahamas after July 9, 1973 to a Bahamian
mother and illegitimate children born outside The Bahamas to Bahamian women are
entitled to apply between the ages of 18 and 21 years subject to interest of
national security or public policy. Any woman married to a Bahamian is entitled
to be registered as a citizen upon application provided she is still married to
that person and subject to interest of national security or public policy.
Others who are not
entitled to be registered or naturalized by virtue of an existing status may
apply for citizenship under the Nationality Act. Residence for a period, English
proficiency and the intention to make The Bahamas a permanent home are among the
qualifications.
ANNUAL RESIDENCY:
A head of household pays
$1,000 plus $20 per dependent. Male spouses of Bahamians pay only 4100,
annually, with no charges for dependents. Applicants must show evidence of
financial support.
PERMANENT RESIDENCY:
Those who wish to settle
in The Bahamas by investing in property, retiring here or opening a business
usually apply for this status. Applicants must be of good character, show
evidence of financial support, and say in writing that they wish to live
permanently in The Bahamas. Wives and dependent children (under age 18) usually
resident in a household can be endorsed on the certificate when the original
application is made or later, subject to conditions which may be made by the
Immigration Board.
Persons with this status
prior to the Immigration act (1975) continue to hold the status automatically.
Spouses of Bahamian can receive a Certificate of Permanent Residence with the
right to engage in gainful employment at any time for females and after five
years of marriage for males. Permanent residency can be revoked for cause
including divorce. Cost of Permanent Residence is $5,000 before issuance, with
endorsements free. Permanent Residents who were formerly "belongers" (British
subjects) keep the status for life with no fee and no restriction
regarding employment.
WORK PERMITS:
The Bahamas Government
tries to ensure that Bahamians are given fair consideration for employment. A
work permit application is not considered if a suitably qualified Bahamian is
available or if the prospective employee is already in the country and entered
as a visitor. If the Immigration Board considers the prospective non-Bahamian
employee will be an asset to the Bahamas it reviews the application, but only
after the prospective employer advertises and interviews locally and obtains a
certificate from the Labour Exchange stating there is no qualified Bahamian
registered who could fill the post.
Permits for longer than
one year may be given for key personnel on contract, often with an endorsement
that the employee will be replaced by a Bahamian or will train a Bahamian to
perform the job in a specified time.
Each work permit is for a
specified person and job. A permit holder may apply for a new permit for a new
post without leaving the island.
