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U.S. Department of State 
Bahamas Country Commercial Guide 
Office of the Coordinator for Business Affairs 
                         1995 COUNTRY COMMERCIAL GUIDE 
          PART I. TITLE 
                  RANK OF SECTOR 
                  NAME OF SECTOR 
                  ITA CODE 
          PART II.  NARRATIVE 
          PART III. DATABASE  
     - STATISTICS FOR 1994, 1995, 1996 
          PART I. TITLE 
     - STANDARDS(E.G., ISO 9000 USAGE) 
     - LABOR 
     - HOLIDAYS 
     - WORK WEEK 
     B. DOMESTIC ECONOMY(FOR 1994, 1995, 1996) 
     - GDP 
The Bahamas is a politically stable, middle-income developing country.  
Following general elections in 1992, The Bahamas experienced a peaceful 
transfer of power from the center-left Progressive Liberal Party (PLP), 
which had governed the country for the preceding 25 years, to the 
centrist Free National Movement (FNM). 
The Bahamian government maintains the value of the Bahamian dollar on 
par with the U.S. dollar.  The government's primary monetary 
consideration is the maintenance of sufficient foreign exchange reserves 
to support the present value of its currency, pay for necessary imports, 
and finance the repatriation of corporate profits.  Although the Central 
Bank in 1992 loosened some liquidity restraints dating back to 1987, 
domestic Bahamian banks remained extremely conservative in lending and, 
by early 1994, had accumulated such large Bahamian dollar reserves that 
several were reluctant to accept new deposits. 
Nearly two-thirds of the Bahamas' gross domestic product is derived from 
tourism.  Due to the country's status as a tax haven and off-shore 
banking center, financial services constitute the second most important 
sector of the Bahamian economy(after tourism, and excluding the public 
sector), accounting for just over 10 percent of GDP.  Agriculture and 
industry together account for less than 10 percent of GDP.  There is 
little large-scale agriculture, and most agricultural products are 
consumed domestically.  The country also produces some chemicals and 
pharmaceuticals for export, along with rum and industrial salt. 
Despite its small size, The Bahamas is a major market for American 
exports to the Caribbean, albeit one that has declined slowly in recent 
years.  With few domestic resources and little industry, The Bahamas 
imports nearly all its food and manufactured goods.  Approximately 55 
percent of imports originate in the United States, and most Bahamian 
purchases of third-country exports are acquired through American 
distributors.  American goods and services tend to be favored by 
Bahamians because of cultural similarities and the exposure to heavy 
domestic American advertising from Florida (which, at its closest point, 
is only 45 miles away).  In addition, the dominant tourist industry 
prefers to purchase goods with which their clientele, the vast majority 
of whom are Americans, is familiar. 
For its part, the Bahamian government actively encourages the production 
of locally produced items for use by the tourist industry and promotes 
import substitution, albeit with only very modest success.  While the 
government has encouraged hotels to use domestically produced fruits, 
vegetables, meat, and fish, the uncertainties of relying on small local 
suppliers, which are restricted by government policies that discourage 
the growth of large-scale domestic agriculture, have left the tourist 
industry largely dependent upon imported foodstuffs.   
The Bahamas has much to offer the potential investor:  a stable 
democratic environment, relief from personal and corporate income taxes, 
timely repatriation of corporate profits, proximity to the United States 
with extensive air and communication links, a good pool of skilled 
professionals, and designation under the Caribbean Basin Initiative 
(CBI) as well as Canada's CARIBCAN program and the European Union's Lome 
IV Agreement.  The Bahamas officially welcomes foreign investment in 
tourism and banking, and has declared its interest in agricultural and 
industrial investment as well as any investments which will generate 
local employment, particularly in white-collar or skilled jobs.  
Nevertheless, the Bahamian government and business community have been 
suspicious of outside investment in non-traditional areas such as 
industry, and such projects have generally faced a drawn-out approval 
process and some local opposition.  Therefore, the vast majority of 
successful foreign investments have remained in the areas of tourism and 
banking.  Furthermore, the Bahamian government reserves retail and 
wholesale outlets, non-specialty restaurants, most construction 
projects, small hotels, and most small businesses exclusively for 
Bahamians.  Some categories of businesses are designated for possible 
joint ventures between Bahamians and foreigners. 
Finally, while corruption is admirably rare, some foreign businesses, 
attracted by the tax advantages of investing in the Bahamas, have 
complained that frequent requests for "voluntary" donations to civic 
causes have constituted an unexpectedly high expense. 
Country Commercial guides are available on the National Trade Data Bank 
on CD-ROM or through the INTERNET.  Please contact State-USA at 1-800-
STATE-USA for more information.  To locate country commercial guides via 
the INTERNET, please use the following world wide web address: WWW.STAT-  CCGS can also be ordered in hard copy or on diskette from the 
National Technical Information Service (NTIS) at 1-800-553-NTIS. 
Overview:  The Bahamian economy will remain dependent upon tourism and 
financial services (primarily the former) for the foreseeable future.  
Although per capita income -- officially estimated at $11,610 in 1993 -- 
is among the highest in the region, economic growth will likely remain 
slow as The Bahamas tries to recover from the decline in tourism 
expenditures it suffered in the late 1980's and early 1990's.   
This recovery is complicated by continuing high prices in the Bahamas, 
intense competition from newer tourist destinations in the region, 
continuing economic uncertainties in North America, and the continuing 
structural shift of Caribbean tourism towards cruise travel (which 
generates considerably less income for the tourist destination than 
stopover visits).  The takeover by new management and substantial 
renovation of a major resort on Paradise Island near Nassau may provide 
a near-term boost to tourism starting in 1995, but cannot by itself 
reverse long-term trends.   
High rates of unemployment and underemployment will likely remain 
serious problems throughout the decade, particularly as large numbers of 
children from a local "baby boom" in the 1970's reach the labor market 
with inflated career expectations and relatively weak job skills.   
Despite the Bahamian government's declared interest in economic 
diversification, particularly through development of the agricultural 
and industrial sectors, government inertia, domestic resistance to 
outside investment perceived as potentially competitive with local 
business, high labor costs, and competition from other countries in the 
region more open to foreign investment in non-traditional areas will 
likely continue to restrict the growth of these sectors. 
Tourism: The Bahamas was a vacation destination for over 3.4 million 
visitors in 1994, more than 13 times the country's total permanent 
population.  American visitors accounted for 82.5 percent of these total 
arrivals.  Tourism and related services account for over 60 percent of 
GDP supplying the Bahamian job market, directly and indirectly, with two 
thirds of the jobs in the Bahamas.  Tourism activity weakened during 
1994 as the sector faced continually high prices for tourist goods and 
services, intense competition from other Caribbean destinations, 
continuing uncertainties in the North American economy, increased 
competition from other regional destinations, and a reduction in air 
seats.  Total arrivals declined 6.4 per cent, following a more moderate 
0.2 percent drop in 1993.  Growth in air arrivals slowed to 0.5 per cent 
from 8.1 per cent in 1993, while the contraction on sea arrivals 
increased twofold to 10.2 per cent. 
Stopover arrivals posed an increase of 1.8 per cent to 1,516,035, less 
than half the 6.4 per cent gain achieved in 1993.  Notwithstanding the 
stronger economic recovery in North America, growth in stopover visits 
from the United States was lower at 3.7 per cent from 7.2 per cent in 
Fewer cruise ships called at The Bahamas' ports during 1994, and as a 
result, cruise visitors declined by 11.8 percent relative to 4.3 per 
cent in 1993.  Despite this relative decline, cruise passengers 
continued to represent over 55 percent of all visitors to The Bahamas in 
1993.  The Ministry of Tourism reported that this relative decline in 
cruise ship traffic in the face of continued growth in the cruise 
industry in the Caribbean occurred because some cruise lines rerouted 
their ships to other destinations in the region.  Crime and 
deteriorating standards  of public behavior were also cited as the two 
reasons for last year's decline in tourist arrivals. 
Average room rates averaged at $72.34 per night, the average length of 
stay advanced by 1.6 per cent to 6.3 days, and hotel occupancy rates 
increased 5.6 per cent to 61 per cent.  Consequently, gross earnings 
from tourism grew by an estimated 2 per cent to $1.333 billion. 
In other tourism developments, efforts to re-establish The Bahamas as a 
premier destination for more upscale visitors received a major boost.  
The first phase of Sun International's $250-million redevelopment 
investment of the Paradise Island 1,150 room Atlantis resort and casino, 
formerly owned by Merv Griffin Enterprises, was completed in December of 
1994.  The mega-resort boasts a 14-acre waterscape and includes the 
largest outdoor aquarium in the world. 
In the public sector, the government made notable progress in divestment 
of its hotel properties. Both Lucayan Bay properties on Grand Bahama 
were sold to European concerns during the final quarter of 1994, and the 
Winding Bay Hotel in Eleuthera was sold to the Italian Venta Club.  The 
Crystal Palace Resort and Casino was sold to the Ruffin Group of the 
United States with Host Marriott as the new managing group.  Le Meridien 
(Royal Bahamian) Hotel was sold to the Sandals Resort Group of Jamaica 
and the Ambassador Beach Hotel, renamed "Breezes," was sold to the 
Jamaica-based Super Clubs.  Both Jamaican based groups plan to introduce 
the "all-inclusive" resort idea which is new to The Bahamas, prohibits 
tipping, and eliminates any unexpected extras.  Large scale renovations 
are planned or ongoing for all recently purchased hotels. 
Financial services:  Financial services, the second major sector of the 
Bahamian economy, accounted for approximately 11 percent of GDP.  There 
were 415 licensed banks and trust companies in the country in 1993, 
along with 5 retail banks.  The financial sector generated $122.3 
million in revenue in 1993 (up from $118.2 million in 1992) and employed 
3,447 persons (up from 3,386 the previous year), 95 percent of whom were 
The Bahamas enacted the International Business Companies Act (IBC) in 
1990 to enhance the country's status as a leading financial center.  The 
act served to simplify and reduce the cost of incorporating off-shore 
companies in The Bahamas.  By mid-1994, 24,200 IBC's -- "shell 
corporations" which can be formed in a matter of hours with minimal 
documentation -- had been created, although many appeared to be single-
transaction firms.  In February 1991, The Bahamas also legalized the 
formation of asset protection trusts.  These trusts, used to place the 
financial assets of wealthy individuals beyond the reach of domestic 
courts in countries such as the United States, formed a growing portion 
of Bahamian banking.  The FNM has also made efforts to reduce government 
"red tape" and expedite approval of foreign investment proposals.  The 
new Bahamas Investment Authority (BIA) was created in 1992 with this 
purpose in mind, but it has had a slow start.  The BIA will require a 
full accounting of the environmental impact of new industrial or 
agricultural schemes and will not approve projects which would be unable 
to pass American environmental standards. 
Manufacturing/industry:  The manufacturing/industry sector in The 
Bahamas accounted for only three percent of GDP in 1993.  Exports of 
manufactured goods -- primarily pharmaceuticals, petrochemicals, and rum 
-- which had declined by 13.9 percent in 1993, fell again by 26.4 
percent in 1994.  A $30 million drop in chemical/pharmaceutical exports 
occurred in 1994.  The major factor in this decline was the reduction in 
operations at the Syntex Pharmaceuticals plant in Freeport when the 
parent corporation's patent expired for one of the plant's major 
products, the pain reliever naproxin.  In mid-1994, however, 
unexpectedly high initial sales in the United States of the newly-
released over-the-counter version of naproxin (marketed as "Aleve") led 
to a restart of naproxin production in Freeport.   
Rum exports declined by $0.6 million (5.2%).  Exports of aragonite (a 
coral sand used in glass manufacturing and beach reclamation) fell by 
$10 million (30%) to a relative total $1.1 million (28.7%) increase in 
1993.  Meanwhile salt exports registered growth of $1.6 million, 
compared with a $4.6 million increase in 1993. 
The 1954 Hawksbill Creek Agreement established a duty-free zone at 
Freeport, The Bahamas' second-largest town, with a nearby industrial 
park to encourage foreign industrial investment.  Most Freeport tax and 
duty exemptions were extended by legislation in 1993 through 2054.  
Despite these advantages, Freeport has experienced slow and fitful 
growth.  In 1994, the Bahamian government announced that a Hong Kong 
firm had agreed to spend $40 million to develop a container port in 
Freeport which could spur further development there. 
Agriculture and fisheries:  Despite past difficulties due to stifling 
government policies and the social attitude towards farming, the 
agriculture and mariculture sectors saw positive changes in the past 
year.  Nevertheless, the sectors are still struggling to gain a 
substantial foothold in the import dominated economy (The Bahamas 
imports over $250 million in foodstuffs per year, representing about 80 
percent of its food consumption.)  The agriculture and mariculture 
sectors, which together account for five percent of GDP and employ about 
five percent of the work force full time (and a far larger portion of 
the workforce on a temporary basis during the opening weeks of lobster 
season experienced continued weakness last year.  Governments of both 
major political parties have, in recent years, announced efforts to 
expand food production in order to reduce imports and generate foreign 
exchange.  The GCOB recognizes that in order to become self-sufficient 
in agricultural new varieties of crops must be introduced and the 
caliber of crops released on the market must improve.  Therefore, the 
Bahamian government actively seeks foreign investment aimed at 
increasing agricultural exports, particularly specialty food items.  The 
government officially lists beef and pork production and processing, 
fruits and nuts, dairy production, winter vegetables, and mariculture as 
the areas in which it wishes to encourage foreign investment. 
The Bahamian government, which insists that the agricultural sector 
should employ more Bahamians, has been extremely reluctant to grant work 
permits to foreign workers even in instances in which it is clear that 
they would not displace Bahamian workers. Applications for any 
substantial number of agricultural workers from other western hemisphere 
nations are almost automatically refused.  These policies are unlikely 
to change as domestic unemployment and underemployment continue to grow.  
Ironically, agricultural work has historically carried low prestige in 
Bahamian society and agricultural investors have complained that 
Bahamian field workers are generally unreliable.  In light of this, The 
Ministry of Agriculture and Fisheries established a registry of labour 
to encourage Bahamians to find jobs with the major growers on the Family 
Islands.  Attitudes towards the registry have been positive thus far.  
In early January 1995, over 770 Bahamians applied through this registry 
for temporary farm jobs with an okra farm located in Andros.   
Approximately 240,000 acres of prime uncultivated agricultural land and 
plentiful supplies of fresh water exists throughout the islands but 
agricultural production still remains primarily in the realm of small-
scale farming on the islands of Abaco, Andros, Eleuthera, and Grand 
Bahama. Yet during the past year a growth in the formation of new 
agricultural ventures occurred.  High on the Hog Farm and Roland Fruit 
Farm on Andros are private ventures which began leasing land from 
Bahamian farmers to produce okra, squash, and watermelons for export to 
the U.S. market and in January 1995 High on the Hog Farm exported about 
$400,000 worth of produce.  Morgan's Farm is another joint venture 
between The Bahamas government, through the Bahamas Agricultural and 
Industrial Corporation, and Brookwood Farms of Vero Beach, Florida that 
formed to stimulate agricultural development and establish a training 
network.  Nevertheless, statistics on crop exports for the first six 
months of 1994 revealed a decline of 10.6 per cent to 9,896.11 short 
tons, with the rise in lime exports not supported by tomato exports as 
was the case in 1993.  Crops that remained to be produced were 
grapefruits, oranges, pineapples, and winter vegetables.  
In the area of mariculture, The Ministry of Agriculture and Fisheries 
and the Department of Fisheries has declared a renewed commitment to the 
sustainable and profitable use of Bahamian marine resources.  One of the 
goals of the Department of Fisheries is to develop the commercial 
industry by promoting the under-utilized seafood products of the 
Bahamas. The Ministry of Agriculture and Fisheries opened a new shrimp 
hatchery in Nassau in 1993 with Taiwanese investment, and an American-
backed fish farm on Long Island, which was forced to cease production in 
1992 due to losses, reopened for shrimp production in 1994.  Another 
shrimp farm remained in operation on Grand Bahama Island. 
The value of fishery products for the first 9 months of 1994, aided by 
an appreciable increase in crawfish prices, grew 21.2 per cent to $43.7 
million.  However, the corresponding weight declined by 0.3 million 
pounds to 7.5 million pounds.  Crawfish accounted for 52.5 per cent of 
the total catch; scale fish, 27.0 per cent and conch meat, 19.4 per 
cent.  Export statistics for 
1994 suggest that the value of marine products at $62.5 million exceeded 
the $43.3 million for 1993, reinforced by a 26.7 per cent increase in 
crawfish exports to $57.7 million.  The corresponding weight for total 
exports rose by 0.3 percent to 5.4 million pounds.   
Livestock production accounts for one percent of the value of 
agricultural exports, as most meat produced in the Bahamas is for 
domestic consumption. The number and weight of livestock slaughtered 
during the first six months of 1994 increased by 4.71 per cent and 6.56 
per cent to 1,311 and 140,251 pounds, respectively.  However, production 
of broiler chickens contracted by 14 per cent to 6.7 million pounds and 
eggs, by 6.0 per cent to 2.1 million dozens compared to the same period 
of 1993. 
On the investment front, Gladstone Farms on Andros Island is trying to 
make The Bahamas self-sufficient in poultry production by establishing a 
"contract growing" program that offers entrepreneurs the chance to buy 
directly into the industry.  The farm, which has 50 to 60 percent market 
share of the domestic market, will set up a chicken hatchery and grower 
plant for $200,000. 
In an effort to protect domestic agricultural producers, the government 
requires that a permit be granted to import more than 50 pounds of whole 
chickens or chicken parts, lamb or mutton, or pork legs, shoulders, or 
butts into The Bahamas.  Permits are also required to import plants, 
fruits, vegetables, and cut flowers.  Permit applications have 
occasionally been denied when the government determined that a surplus 
existed in locally-grown products in the same category. 
Construction:  The construction industry benefited from a rebound in 
commercial investments while residential activity awaited a more broad-
based upturn in the economy.  According to the 1994 Central Bank 
statistics, the number of approved projects rose by 12.2 percent to 452 
units and the estimated value rose to $140.9 million. 
The number and value of new residential approvals dropped by 168 (8.6%) 
to 1780 units and $11.6 million (7.2%) to $149.5 million.  The total 
number of public sector permits was unchanged at 14, although the 
attendant value fell by a third to $3.1 million.  Building starts, which 
contracted in number by 19, were boosted in value by $56.5 million.  
This was primarily due to the first phase of Sun International's $125 
million resort project.   
Private housing starts fell in both value and number by 50 units and 
$13.4 million respectively.  Public sector starts rose by a single unit 
and the value increased to $700,000.  Progress continued on 
electrification and harbor improvement projects, roads, and the 
upgrading of the water and telecommunications systems. 
U.S.-Bahamian trade:  The United States remained The Bahamas' major 
trading partner.  American firms exported $685.4 million in goods and 
services to The Bahamas in 1994, down from $704.1 million the previous 
year.  Primary American exports to The Bahamas were manufactured goods, 
machinery, food, petroleum products, automobiles, and chemicals.  On the 
other side of the ledger, Bahamian commodity exports to the U.S. totaled 
$203.0 million in 1994, down from $348.2 million in 1993.  Primary 
Bahamian exports to the U.S. were pharmaceuticals, chemicals, industrial 
salt, lobster, and aragonite. 
Caribbean Basin Initiative (CBI):  The Bahamas was designated a 
beneficiary of the Caribbean Basin Initiative (CBI) in 1985.  As a 
result, with certain restrictions, products manufactured in the Bahamas 
qualify for duty-free entry into the United States.  High wage rates, 
however, combined with the country's small manufacturing and 
agricultural sectors, hindered The Bahamas' ability to exploit these 
benefits.  In addition, The Bahamas' failure to enter negotiations with 
the United States for a bilateral Tax Information Exchange Agreement 
(TIEA) precluded the use of 936 (QPS II) credits for projects in The 
Bahamas or the use of the convention deduction tax benefit for business 
conventions held in The Bahamas. 
Balance of payments and trade:  The Bahamas has an import-oriented 
economy and relies heavily on tourism for foreign exchange.  Due 
primarily to declining exports, the country's trade deficit grew in 1994 
to an estimated $903.2 million from $843.5 million the previous year.  
Foreign exchange reserves at the end of 1994 were estimated at $173.6 
Government budget:  The FY 1995-1996 Bahamian $819 million budget (the 
Bahamian fiscal year runs from July to June) focuses on restoring 
stability to public finances, maintaining the fixed exchange rate with 
the U.S. dollar, and strengthening the role of the private sector in the 
over-all economy.  The budget provides for recurring expenditures of 
$725 million, an increase of $43 million from the previous fiscal year.  
An allocated $174 million will go to the repayment of interest and 
principal on government debt and government borrowings will not exceed 
$85 million.  Capital expenditure is estimated at $94 million.  The 
Ministry of Education will again receive the largest share of the 
recurring expenses with infrastructure improvements being allotted the 
remaining amount.  Recurring revenue is projected at $665 million for 
1995-1996.  This represents an increase of $25 million over the expected 
revenue of $640 million for 1994-1995. 
The budget aims to reduce taxes on a number of tourist products and on 
real estate transactions to enhance the country's competitiveness in the 
tourist market and attract foreign investment.  Products that will 
receive a reduction in stamp duty include: brandy, gin, rum, vodka, and 
whiskey from #13 per proof gallon to $10 per proof gallon; cordials, 
liqueurs, and other spirits were reduced by $1 per proof gallon to $10; 
toilet water, cologne, and perfume is being reduced from 28 pre cent to 
20 per cent; table linen, jewelry, and pearls will be reduced from 18 
per cent to 10 per cent; duty on watches and clocks will experience a 3 
per cent reduction; and all non-leather designer handbags will be 
included under designer goods to receive a 20 per cent tax reduction.  
The budget also provides for a reduction on customs duties on cigarettes 
and a simultaneous step-up in efforts to control smuggling of cigarettes 
and contraband.   
Monetary and credit policy:  The Bahamas' primary monetary strategy is 
to maintain stability and expansion in foreign exchange reserves to 
purchase essential imports, maintain the parity of the Bahamian and 
American dollars, and finance repatriation of corporate profits.  
Despite efforts by the Central Bank to ease consumer credit in January 
1993 by removing the previous 35 percent down-payment requirement for 
consumer loans, domestic Bahamian banks were so awash in liquidity by 
mid-1994 that some banks were even refusing new Bahamian dollar 
deposits.  Net free cash reserves averaged $38.9 million in 1994 
compared with $30 million the previous year.  Central Bank authorities 
blamed continuing conservatism in lending policies by Bahamian banks for 
both consumer and business loans for the excess liquidity problem.  The 
average lending rates fell within a band of 10.17 - 11.87 per cent for 
residential mortgages, to 14.49 - 17.94 per cent for consumer loans.  
The Bahamian dollar remained pegged to the U.S. dollar at an exchange 
rate of 1:1 and the Bahamian government reiterated its long-standing 
commitment to maintain parity. 
Inflation and unemployment:  Consumer price inflation, measured as the 
average variation in the retail price index, decelerated to 1.3 per cent 
in 1994 from 2.7 per cent in 1993, with the year-on-year rise at 1.5 per 
cent by end 1994.   
While accurate unemployment figures were not available, unemployment 
appeared to be between 20 and 25 percent, with higher rates among youth.  
In addition, the Bahamas appeared to have a large but unreported 
population of under-employed workers.  The Bahamian labor force had an 
estimated 136,900 workers.  Bahamian government figures for both 
consumer prices and employment were rough estimates; the statistics 
department of the Ministry of Finance and planning was attempting to 
improve information gathering in these areas. 
The Bahamas is a constitutional multi-party parliamentary democracy and 
a member of the Commonwealth of Nations.  Queen Elizabeth II is the 
nominal head of state and is represented in the Bahamas by an appointed 
Governor General.  The government is headed by an elected Prime Minister 
and Parliament.  Since 1992, the government has been controlled by the 
centrist Free National Movement (FNM) of Prime Minister Hubert A. 
Ingraham.  The opposition center-left Progressive Liberal Party (PLP) is 
led by Sir Lynden O. Pindling, who was Prime Minister from independence 
in 1973 until 1992.  Since the August 1992 general elections, which saw 
a peaceful transfer of power between the two major political parties, 
the FNM has held 32 seats in the 49-member House of Assembly, with the 
other 17 held by the PLP.  Under the constitution, the next general 
elections must be held before August, 1997. 
Both major political parties have enjoyed good relations with the 
business community, and no serious political movement in Bahamian 
history has ever advocated the nationalization of foreign property.  
There is no Bahamian history of political violence or instability, and 
politics tend to follow the British model of combining sometimes intense 
rhetoric with courtly manners.  The political issues of most interest to 
the business community are bank secrecy and openness to foreign 
investment.  Both political parties favor maintaining the Bahamian 
tradition of strict bank secrecy, believing this policy to be essential 
to the maintenance of a thriving financial services sector.  The current 
government, however, pledged in 1994 to introduce new legislation, which 
it believed was necessary to maintain the reputation of the Bahamian 
banking system, tightening regulations against money-laundering.  Both 
political parties have stated that reducing unemployment is their major 
priority, and both have said they welcome foreign investments which 
would employ large numbers of Bahamians.  Both parties, however, have 
proven very responsive to local constituencies in instances where local 
businesses or labor unions have charged that a particular foreign 
project either failed to employ a sufficient number of Bahamians or 
represented possible future competition to a Bahamian enterprise. 
The Bahamian legal system is derived from British common law and 
colonial legislation, although American and other models have been used 
for some business legislation enacted since independence.  The judiciary 
is independent, appointed by the executive branch on the advice of the 
judicial and legal services commission, and conducts fair and public 
trials with the ultimate right to appeal judicial decisions to the 
Commonwealth Privy Council.  A large and competent legal community, most 
of whom have received some training in Great Britain or the Caribbean is 
available to assist foreign business clients.  While fair, the Bahamian 
judicial process tends to be slower than the norm in the United States, 
primarily due to overcrowded court dockets in an under-funded system.  
Although there have been instances of Bahamian businessmen attempting to 
take advantage of delays in the judicial process and their physical 
proximity to gain advantages in commercial disputes with foreign firms, 
there is no evidence that the Bahamian judiciary has favored local firms 
over foreign ones in its final adjudication of disputes.  The Bahamian 
government began a process of upgrading its court system, in part with 
American government aid, in 1993. 
Bilateral U.S.-Bahamian relations are excellent.  Although The Bahamas 
lie along the most direct air route for transport of illegal substances 
between South America and the southeastern United States, Bahamian 
government cooperation with U.S. law enforcement agencies under 
"Operation Bahamas-Turks & Caicos" (OP-BAT) has significantly reduced 
the level of drug trafficking through the Bahamas.  Bilateral 
cooperation in narcotics interdiction operations is more extensive than 
that which the United States enjoys with any other country.  In 1994, 
the Bahamas strongly supported American efforts to end military rule in 
Haiti.  A common language, cultural similarities, family and personal 
ties dating back to the days of the American Revolution (when the 
ancestors of many modern Bahamians first came to the islands from the 
southeastern United States), and the enormous number of visitors every 
year between the two countries have engendered a level of familiarity 
and ease of communication unusual even between neighboring countries. 
Bahamian government policy prohibits foreign investors from opening 
retail and wholesale outlets, non-specialty restaurants, small hotels, 
and most small businesses in the Bahamas.  However, a wide variety of 
distributorship, joint venture, and franchise opportunities involving 
Bahamian partners are available.   
Goods intended for sale to the general public are normally purchased by 
local wholesalers, several of whom specialize in particular lines.  The 
usual business practice is for the wholesalers to make purchases 
directly from their counterparts in Florida, which is why such a large 
proportion of third-country products are imported into the Bahamas 
through the United States.  Most wholesalers and some retailers, 
however, are willing to make direct purchase arrangements.  In some 
cases, Bahamian retail outlets or wholesalers will enter exclusive 
distributorship arrangements with foreign firms. 
Businesses intending to market goods or services to the Bahamas 
government or businesses seeking to enter the Bahamian commercial market 
are advised to seek the advice of the American Embassy in Nassau at an 
early stage.  The Embassy's Commercial Office offers a number of 
services tailored to specific businesses seeking local distributors, 
including the Commerce Department's "Goldkey Service," for modest fees.  
Visitors can also speak, by appointment, with a trade specialist in the 
Commercial Office, located in the Embassy in downtown Nassau on Queen 
Street. Persons wishing to consult or retain local counsel are also 
advised to contact the Commercial Office for a copy of the office's 
"Attorneys List."  The office can be contacted at: 
Economic-Commercial Section 
American Embassy Nassau 
P.O. Box 9009 or P.O. Box N-8197 
Miami, FL 33159 Nassau, Bahamas 
Nassau telephone:(809) 323-7180 and fax:(809) 328-3495 
Companies seeking to establish a representative office in the Bahamas 
must first obtain a business license.  Licenses are issued following 
application to and approval by the Bahamas Investment Authority (BIA) in 
the office of the Prime Minister.  The BIA can be contacted at: 
Bahamas Investment Authority 
Office of The Prime Minister 
P.O. Box N-7147 
Nassau, Bahamas 
Tel:(809) 323-7180 
Fax:(809) 328-3495 
Advertising:  Advertising for any legal item or service, whether sold in 
the Bahamas or in the United States, can be freely purchased in any 
local newspaper or publication.  Leading local publications include: 
The Nassau Guardian (circ. 15,000, morning daily)  
P.O. Box N-3011 
Nassau, Bahamas 
Tel:(809) 323-5655, (809) 3232-6492, or (809) 323-5656. 
The Tribune (circ. 15,000, afternoon daily) 
P.O. Box N-3207 
Nassau, Bahamas 
Tel:(809) 322-1986 
Advertising Manager Tel:(809) 322-2768 
Fax:(809) 328-2398. 
The Freeport News (circ. 5,000, morning daily) 
P.O. Box F-40007 
Freeport, Bahamas 
Tel:(809) 352-8321 
The Punch (circ. 25,000, weekly tabloid) 
P.O. Box N-4081 
Nassau, Bahamas 
Tel:(809) 322-7112 
Fax:(809) 323-5268 
The Bahama Journal (circ. 5,000, weekly) 
P.O. Box N-8610 
Nassau, Bahamas 
Tel: (809) 325-3082 
Radio and television advertising can also be purchased on local radio 
and television stations.  The sole television broadcaster is the state-
owned ZNS (channel 13).  This station, and its Nassau radio stations 
ZNS-1, ZNS-2, and ZNS-FM, can be contacted at: 
Broadcasting Corporation of The Bahamas 
P.O. Box N-1347 
Nassau, Bahamas 
Tel:(809) 322-4623 or (809) 322-4480 
Advertising Sales Director:(809) 322-8962 
A popular independent FM radio station, 100-Jamz, is operated by The 
Tribune and can be contacted at: 
P.O. Box N-3207 
Nassau, Bahamas 
Tel:(809) 328-4771 
Fax:(809) 356-5343 
A second independent FM radio station, Love-97, operated by The Bahama 
Journal, can be reached at: 
Love-97 FM 
P.O. Box N 3909 
Nassau, Bahamas 
Tel: (809) 356-4960 
Fax: (809) 356-7256 
Best prospects for non-agricultural goods and services 
Foodstuffs and manufactured goods 
The best US export opportunities remain in the traditional areas of 
foodstuffs and manufactured goods; vehicles and automobile parts; hotel, 
restaurant, and medical supplies; and computers and electronics.  
Bahamian tastes in consumer products roughly parallel those in the 
United States, both because of similarities in culture and because the 
proximity of The Bahamas to the US exposes Bahamians to massive doses of 
American domestic advertising.  With approximately 85 percent of the 
population being of primarily African descent, there is a large and 
growing market in The Bahamas for "ethnic" personal care products aimed 
at the African-American market.  Merchants in southern Florida have 
found it profitable to advertise in Bahamian publications, as the 
average middle-income Bahamian makes several shopping trips to Florida 
every year.  Bahamian consumer and safety regulations, where they exist, 
are based on US models and thus are not a barrier to exports of items 
suitable for the domestic American market.  Most imports in this sector 
are subject to high but non-discriminatory tariffs. Although Bahamian 
government policy prohibits American foreign retail chains from opening 
outlets in The Bahamas, various distributorship and franchise 
arrangements are possible. 
Total Exports for 1992(in B$): $63,078,737 
Total Imports for 1992(in B$): $355,139,104 
Total Imports from the US for 1992(in B$): $315,512,601 
Vehicles and automobile parts 
Although Bahamians drive on the left side of the road, and thus right-
hand drive vehicles (such as domestic Japanese and British models) have 
a slight advantage, there is no legal restriction against left-hand 
drive (US Standard) vehicles, and the majority of vehicles on Bahamian 
roads are American-made.  There is a large market for second-hand US 
vehicles, although these can only be sold through local dealers.  Used 
limousines are particularly prized for use as taxis.  Bahamian safety 
and pollution standards are less restrictive than those in the United 
States.  Import tariffs, while high, are non-discriminatory. 
Total Exports for 1992(in B$): $2,467,320 
Total Imports for 1992(in B$): $58,635,858 
Total Imports from the US for 1992(in B$): $51,431,711 
Hotel, restaurant, and medical supplies 
Tourism is the overwhelmingly dominant industry, with more than 80 
percent of tourists to The Bahamas coming from the United States.  The 
market for supplies familiar to American tourists is, therefore, 
predictably large.  With the current slow recovery in tourism, tourist-
oriented businesses are particularly interested in goods which increase 
their efficiency and lower costs.  Bahamian government efforts in recent 
years to sell off properties formerly owned by the state-run hotel 
corporation -- which saw the privatization of most government-owned 
hotels and resorts -- has produced a number of new owners interested in 
buying new supplies to spruce up decaying properties.  In certain 
instances, the Hotels Encouragement Act allows duty-free importation of 
hotel supplies for several years after the original construction or 
reconstruction of a hotel or resort. 
No figures are currently available for this sector. 
Computers and electronics 
Similar to the market for US consumer goods, described above.  The 
large, modern financial services sector is a particular target.  High 
but non-discriminatory tariffs apply.  Goods which can be easily 
serviced either in The Bahamas or in Florida will enjoy a competitive 
advantage over those which cannot; service agents in The Bahamas must be 
Total Exports for 1992(in B$): $8,563,739 
Total Imports for 1992(in B$): $76,407,004 
Total Imports from the US for 1992(in B$): $66,551,697 
Best prospects for agricultural products 
Fruits and Vegetables 
The Bahamas continues to show weakness in this category.  Price declines 
for grapefruit in 1994 adversely affected export volumes and vegetable 
exports fell as a result of the closure of a large farming operation. 
Total Exports for 1992(in B$): $5,736,292 
Total Imports for 1992(in B$): $32,861,762 
Total Imports from the US for 1992(in B$): $314,524,455 
Reflecting increased demand for swine, the number and weight of 
livestock slaughtered during the first sixth months of 1994 increased 
marginally but not commensurately with demand. 
Total Exports for 1992(in B$): $2,200 
Total Imports for 1992(in B$): $836,720 
Total Imports from the US for 1992(in B$): $836,729 
Animal and Vegetable Oils and Fats  
The demand for these products, while small, is not met by local 
Total Exports for 1992(in B$): $6,177 
Total Imports for 1992(in B$): $2,240,787 
Total Imports from the US for 1992(in B$): $2,230,985 
Customs:  The Bahamian government raises approximately 60 percent of its 
total revenue from import tariffs, which, as a result, tend to be high.  
The basic ad valorem tariff for imported goods is 35 percent, but a long 
list of items have separate tariff rates.  Among these are: 
-- clothing:  25 percent 
-- tobacco:  160 percent 
-- cigarettes:  150 percent plus $1.50 per 100 and 75% stamp tax 
-- bottled water:  100 percent 
-- pool tables:  100 percent 
-- room air conditioners:  55 percent 
-- automobiles:  45 to 65 percent, based on the type of vehicle 
-- personal computers:  25 percent 
-- business computers:  50 percent 
-- stereo units:  32.5 percent plus $5 per unit 
-- satellite dishes and accessories:  65 percent 
-- video tapes:  65 percent 
-- cheese:  10 percent 
-- pasta:  10 percent 
All these rates, and others, are subject to change.  In 1993, for 
example, the Bahamian government lifted customs duties on cooking oil, 
cocoa powder, and personal hygiene items for women, while reducing other 
duties.  In 1994, the government raised some customs duties and imposed 
new tariffs on pork products.  Bahamians shopping in Florida (and 
elsewhere abroad) are permitted to import $300 worth of goods, duty 
free, per trip twice a year ($150 for persons under 12 years of age.)   
In addition, The Bahamas charges a host of "stamp taxes" on most imports 
above and beyond the import duties.  These stamp taxes vary depending 
upon the item in question, and apply even to many items otherwise duty 
free.  Yet on average, The Bahamas charges an export stamp tax of 4 
percent on most exports from the country.  The FY 1995-96 budget reduced 
stamp taxes on various tourist items, including: brandy, vodka, gin, 
rum, whiskey, cordials, liqueurs, other spirits, toilet water, cologne, 
perfume, table linen, jewelry, pearls, watches, clocks, and non-leather 
designer handbags. 
Certain goods may be imported conditionally on a temporary basis against 
a security bond or a deposit that is refundable on the re-exportation.  
These include fine jewelry, goods for business meetings or conventions, 
traveling salesmen equipment, and equipment or tools for repair work. 
Entry forms are required by Bahamian Customs for goods coming by sea, 
air or post.  A genuine invoice (original or carbon copy) is required.  
The Customs Department only honors discounts of up to three percent (3%) 
given by U.S. exporters. 
Copies of current import regulations may be obtained from: 
Government Publications Office 
Parliament Square 
P.O. Box N-7147 
Nassau, Bahamas 
Membership in free trade arrangements:  The Bahamas is a beneficiary of 
the U.S. Caribbean Basin Initiative (CBI), Canada's CARIBCAN program, 
and the European Union's Lome IV Agreement.  Although the Bahamas 
participates in the political aspects of the Caribbean Community 
(CARICOM), it has not entered any joint economic initiatives with other 
Caribbean states. 
Openness to foreign investment:  The Bahamian government actively 
encourages foreign investment in certain sectors of the economy, 
particularly in tourism, banking, agriculture, and manufacturing.  At 
the time of its election in 1992, the Ingraham administration announced 
its intention to privatize several public corporations, including the 
hotel corporation, the corporation providing ground services at Bahamian 
airports, and parts of the state-owned Bahamas telecommunications 
corporation (BATELCO), as well as to invite private investment in the 
national air carrier, BAHAMASAIR.  Foreign investment is welcome in 
these areas, particularly in the purchase of government-owned hotel and 
resort properties.  Certain businesses, however, are reserved 
exclusively for Bahamians.  These reserved businesses include 
restaurants (except gourmet and ethnic); all but very large-scale 
construction; wholesale and retail distribution; commission agents 
engaged in the import and export trade; real estate agencies; domestic 
public transportation by land, sea, and air; newspaper and magazine 
publications; advertising and public relations; interior decorating; 
cinemas, theaters, and nightclubs; security services; handicrafts; 
service establishments such as hairdressing, barbering, automotive and 
appliance repairs; guest houses and hotels of 25 rooms or less; and 
farming up to 100 acres.  In addition, the Bahamian government has 
reserved certain categories of businesses for joint venture operations 
which include majority Bahamian ownership.  Included in this category 
are international air and sea transportation; debit insurance; hotels of 
26 to 100 rooms; manufacturing aimed primarily at the local market; some 
types of farming in excess of 100 acres; and large-scale construction to 
the extent possible. 
Benefits of investing in The Bahamas include a stable democratic 
environment, relief from corporate and personal income taxes, 
sophisticated financial services, timely repatriation of corporate 
profits, proximity to the United States, extensive air links through 
nearby Miami and Orlando, excellent communications links, a good pool of 
skilled professionals, excellent tourism and conference facilities, and 
designation under the Caribbean Basin Initiative (CBI) as well as 
Canada's CARIBCAN program and the European Union's Lome IV agreement.  
In 1993, the government announced the establishment of The Bahamas 
Investment Authority (BIA) within the Office Of The Prime Minister.  BIA 
was designed to provide a "one-stop shop" to assist foreign investors 
with approval of their investment applications and to cut through 
further "red tape" for approved investments.  Despite a slow start, BIA 
remains the Bahamian government's central point of contact for foreign 
investment questions. 
In practice, the vast majority of successful foreign investments in The 
Bahamas have remained in the traditional areas of tourism and banking.  
The Bahamian government and business community have been suspicious of 
outside investment in non-traditional areas such as agriculture and 
industry, and projects in these areas have generally faced a drawn-out 
approval process and some local opposition.  The Bahamian government is 
most interested in investments which will generate local employment, 
particularly in white-collar or skilled jobs; large-scale projects in 
areas such as agriculture requiring low-wage and low-skill labor in 
which many Bahamians are not interested have failed due to government 
reluctance to allow foreign workers to be used even on a temporary 
permit basis.  In instances where new foreign ventures have been 
perceived by a part of the Bahamian business or labor communities as 
competing with existing Bahamian businesses, the government has been 
generally responsive to local concerns and has closed the foreign 
venture, even in instances in which business licenses were already 
granted.  Furthermore, while The Bahamas has not yet enacted 
environmental legislation as extensive as that in the United States, the 
BIA will require a full accounting of the environmental impact of new 
industrial or agricultural schemes and will not approve projects which 
would be unable to pass American environmental standards.  Finally, 
while corruption is admirably rare, some foreign businesses, attracted 
by the tax advantages of investing in The Bahamas, have complained that 
frequent requests for "voluntary" donations to various civic causes have 
constituted an unexpectedly high expense. 
Settlement in Investment Disputes:  The Bahamian government has never 
expropriated a business and both major political parties have stated 
that "nationalization will not be an instrument of government policy."  
The Bahamas is not yet a member of the International Center For The 
Settlement Of Investment Disputes.  The Bahamas joined the Multilateral 
Investment Guarantee Agency (MIGA), which insures investors against 
currency transfer restrictions, expropriation, war and civil 
disturbances, and breach of contract by member countries in 1992.  The 
Bahamas has no history of political violence. 
Performance requirements/incentives:  The Bahamas levies no taxes on 
personal or corporate income, capital gains, dividends, interest, 
royalties, sales, estates, inheritances, or payrolls.  Foreign-owned 
businesses receiving tax benefits are expected, however, to contribute 
generously to various civic projects.  The only direct tax is the real 
property tax.  The tax rates on real property are as follows: 
Owner occupied: 
      (a) exempt from real property tax on the first $50,000 of      
assessed value; 
      (b) 0.75 percent per annum on the next $50,000 of assessed      
      (c) one percent per annum on assessed value in excess of     
Commercial property: 
-- (a) 0.50 percent per annum on the first $50,000 of assessed value; 
-- (b) one percent per annum on assessed value in excess of $50,000. 
A gambling tax is also levied.  The airport departure tax was raised 
from $7 to $13 per person in 1991 and again from $13 to $15 per person 
in 1993.  The government originally raised the harbor departure tax from 
$7 to $20 per person in 1991; following protests from cruise ship 
operators, however, the harbor departure tax was lowered to $15 in 1992. 
Industries Encouragement Act:  Under this law, the government may exempt 
from duties the machinery, tools, equipment, and raw materials imported 
to construct new factories.  A list of duty-exempt items is negotiated 
separately with each new venture. 
Hotels Encouragement Act:  Under this law, new hotels and resorts can be 
exempted from real property taxes for ten years from the date the new 
facility opens.  In addition, the act allows the duty-free importation 
of materials used for the construction of new facilities or the 
substantial renovation of existing facilities acquired by new owners for 
a set period of time.  The list of duty-free items for each project and 
the duration of some duty-free windows are negotiated separately for 
each venture. 
Agricultural Manufactories Act:  This law allows any materials necessary 
for the construction, alteration, or repair of an "agricultural 
factory," as well as any machinery or supplies used in establishing such 
a factory, to be imported duty free.  An "agricultural factory" refers 
to any factory established for the purpose of manufacturing or preparing 
agricultural or horticultural produce of The Bahamas for sale or export. 
Spirits and Beer Manufacture Act:  This law provides for the duty-free 
importation of materials used in the construction, alteration, or repair 
of approved liquor distilleries or beer breweries and the duty-free 
importation of raw materials and equipment for liquor or beer 
In addition to these acts, the Tariff Act grants to the government 
authority to waive import duties on various goods, supplies, and 
materials justified by the public good where the specific waiver is not 
covered by other parliamentary acts. 
Right to private ownership and establishment:  The Bahamian government 
in 1993 repealed the Immovable Property (Acquisition By Foreign Persons) 
Act, which required foreigners to obtain approval from the Foreign 
Investment Board before purchasing real property in the country, 
replacing it with the Foreign Persons (Landholding) Act.  Under the new 
law, approval is automatically granted for non-Bahamians to purchase 
residential property of less than five acres on any single island in The 
Bahamas, except where the property constitutes over fifty percent of the 
land area of a cay (small island) or involves ownership of an airport or 
marina.  The Bahamian government hopes this new legislation will 
stimulate the second home/vacation home market and revive the once-
vibrant real estate sector.  The new law also provides for a two-year 
real property tax exemption for foreign persons acquiring undeveloped 
land in The Bahamas for development purposes, provided that substantial 
development occurs during those two years.  At the same time, however, 
the Bahamian government doubled the tax on undeveloped real property 
held by foreigners from 1.50 percent of assessed value to 3 percent, 
effective January 1, 1994, and planned to more than double the tax again 
in 1995 to 7 percent of assessed value.  Following protests by foreign 
property owners, however, Bahamian officials indicated that they may 
reconsider the tax increase, which was originally passed to raise 
revenue, spur the lagging construction industry, and encourage 
foreigners holding undeveloped plots of land over long periods of time 
to develop their land. 
Bilateral investment agreements:  The Bahamas is in the process of 
negotiating an investment protection agreement with the United Kingdom.  
There is no Bilateral Investment Treaty (BIT) between The Bahamas and 
the United States. 
OPIC and other investment insurance programs:  OPIC programs:  most 
recently, OPIC approved two investment projects in The Bahamas in 1992.  
It guaranteed up to $10.8 million in loans to the UNIROYAL Chemical 
Company, Ltd. to assist in the purchase and refurbishment of a plant in 
Freeport formerly owned by Gist-Brocades, Ltd.  UNIROYAL currently uses 
the plant to produce high performance antioxidants used in the 
manufacture of plastics for export to North America, Europe, and Asia.  
In addition, OPIC committed itself to loan up to $1.6 million to 
LANDQUEST, ltd. for the development of the Princess Cays cruise ship 
facility on Eleuthera island near Bannerman town. 
Intellectual property rights:  The Bahamas is a member of the World 
Intellectual Property Organization (WIPO).  Local copyright laws, which 
date to the 1970's, have not yet been revised to take into account 
recent developments in communications and computer technology. 
Labor:  In 1993, the Bahamian labor force consisted of 136,900 workers.  
The unemployment rate, officially estimated at 13 percent, is more 
likely in the 18-20 percent range.  Unemployment is highest among youth 
and slightly higher for women; unemployment outside Nassau and Freeport 
tends to be higher than in the two major population centers.  
Considerable underemployment also exists in The Bahamas.  Despite these 
facts, wage rates, while considerably lower than in the United States, 
tend to be higher than elsewhere in the Caribbean. 
The Department Of Labor is responsible for enforcing labor laws and has 
a team of several inspectors who make on-site visits to enforce 
occupational health and safety standards and investigate employee 
concerns and complaints.  The Department normally announces these 
inspections ahead of time.  The Fair Labor Standards Act limits the 
regular workweek to 48 hours and requires at least one 24-hour rest 
period per week, paid annual vacations, and employer contributions to 
national insurance (the local equivalent of social security).  The Act 
also requires overtime payment (time and a half) for hours in excess of 
the standard or time worked during public holidays.  The Act permits the 
formation of a wages council to determine a minimum wage, but no such 
council has been established.  A 1988 law provides for maternity leave 
and the right to re-employment after childbirth. 
The Bahamian constitution specifically grants labor unions the rights of 
free assembly and association.  These rights are exercised extensively, 
particularly in the hotel industry where 80 percent of the employees are 
unionized.  Unions operate without restrictions or government control.  
The right to strike is limited under the Industrial Relations Act, which 
requires that union members must vote to strike and that the motion must 
be passed by a simple majority before a strike can commence.  The 
Ministry Of Labor oversees strike votes.  In general, labor-management 
relations in The Bahamas are sometimes strained, but major or prolonged 
strikes are very rare.  Labor unions involved in disputes with foreign-
owned enterprises have not been above using the fact of foreign 
ownership as a lever to gain popular support for their demands. 
Work Permits:  The Immigration Act requires foreigners to obtain work 
permits before they can be employed in The Bahamas.  The government will 
permit foreign employees to work in a technical, supervisory, or 
managerial capacity to initiate and operate industries, provided no 
similarly qualified Bahamians are available for the job.  Foreign 
business owners are expected to train as many of their Bahamian 
employees as possible to eventually fill technical and managerial 
positions.  While work permits are normally granted impartially under 
established criteria, there have been isolated instances in the past in 
which Bahamian government officials have prolonged the process of 
renewing work permits for foreign managers whose actions drew local 
labor protests. 
Foreign Trade Zones/Free Ports 
Free Trade Zones:  A free trade zone exists at Freeport on Grand Bahama 
Island, and a much smaller one on New Providence island.  The Hawksbill 
Creek agreement established Freeport, the country's second-largest town, 
as a free trade zone in 1954.  Firms in Freeport are granted the right 
to import materials duty-free, and enjoy other tax advantages.  In 1993, 
the Bahamian government extended most Hawksbill Creek tax and duty 
exemptions through 2054, while withdrawing exemptions on real property 
tax for foreign individuals and corporations.  Prime Minister Ingraham 
declared, however, that property tax exemptions might still be granted 
to particular individuals on a case-by-case basis. 
Capital outflow policy:  Profits and investment capital may be freely 
repatriated.  Non-resident or foreign investors wishing to initiate 
operations in The Bahamas must register their operations with the 
Central Bank.  If the projects are substantially financed by foreign 
currency transferred into The Bahamas, they will be given "approved 
status."  This means that all profits and dividends, as well as the 
proceeds from sales of such business, can be freely converted from local 
currency into foreign currency at any time.  While foreign investors in 
The Bahamas enjoy complete freedom to repatriate their investments and 
profits, The Bahamas does not offer any incentives for investment in 
other developing countries. 
Major Foreign Investors:  Major current foreign investments in The 
Bahamas include: 
-- The Winding Bay Hotel in Eleuthera owned by Venta, an Italian group; 
-- A large pharmaceutical plant in Freeport owned by Syntex 
pharmaceuticals, which in turn is owned by the Swiss pharmaceutical firm 
-- Uniroyal Chemical plant manufacturing high performance antioxidants 
in Freeport; 
-- A container port facility being developed at Freeport by Hong Kong 
-- Atlantis, a hotel, resort, and casino complex on Paradise Island near 
Nassau recently purchased by the South African firm Sun Hotels 
-- A large citrus farm being developed on Abaco island by the B.G. 
Harmon Fruit Company of Florida; 
-- a large shrimp farm on Long Island operated by the American firm 
-- A tropical fish farm operated on Walker's Cay by Aqua Life, Ltd.; 
-- Ruffin's Crystal Palace Resort, Casino, And Convention Center, 
operated by Host Marriott Corporation; 
-- Coral Island Underwater Observatory, Marine Park, And Hotel operated 
by an Israeli firm; 
-- Princess Cays, a cruise ship landing facility on Eleuthera Island 
owned by Landquest; 
-- Club Med resorts on Paradise Island, Eleuthera, and San Salvador;  
-- Comfort Suites on Paradise Island; 
-- Ambassador Beach Hotel recently purchased by the Jamaican company, 
Superclubs, under the trade name Breezes; 
-- Royal Bahamian Hotel recently purchased by Sandals company of Jamaica 
from the Bahamian government; 
-- Freeport/Lucaya Marina Village developed recently by European 
-- Cable Bahamas, Ltd. recently begun by a Canadian group 
-- Island Outpost Resort at Compass Point recently built by a Jamaican 
music magnate. 
Formerly an oligopoly dominated by the subsidiaries of foreign banks, 
the Bahamian banking system is in the process of changing.  Influencing 
these changes are several factors: increased competition in the 
marketplace; newly available technology allowing new electronic 
services; and political pressure to help small bankers.  In spite of 
these incipient changes, the banking system today remains fundamentally 
as it has long been.  That is to say, it is legally divided between 
domestic banks, which service consumers and businesses operating in The 
Bahamas and offshore commercial services which deal in all markets 
except the domestic market.  Furthermore, the non-interventionist 
tradition of the Central Bank of The Bahamas has allowed the industry to 
set interest rates and lending standards independently - a scheme which 
has been highly profitable for the banking industry, particularly in the 
areas of consumer and mortgage credit as well as in commercial lending  
Nevertheless, with the excess liquidity created by years of cautious 
lending and a lack of available investments and with the crowding of 
banking institutions in the country(there are five big international 
banks and three midsize local institutions for a population of 260,000), 
competition has greatly increased with interest rates dropping to the 
benefit of both the consumer and the foreign investor.  Still, most 
financing for the private sector in The Bahamas thus comes from the 
relatively small number of commercial banks licensed to operate 
domestically or from The Bahamas Development Bank, which is a 
government-operated institution established to provide medium- and long-
term financing to projects in priority areas of the economy.  Projects 
in The Bahamas are also eligible, in some instances, for financing from 
the US Export-Import Bank, the Overseas Private Investment Corporation 
(OPIC), or from multilateral institutions such as the Inter-American 
Development Bank (IDB). 
Major Bahamian banking institutions which can provide financing for 
certain projects in The Bahamas include: 
P.O. BOX N-3034,  
Nassau, Bahamas 
P.O. BOX N-7118 
Nassau, Bahamas 
P.O. BOX N-8350 
Nassau, Bahamas 
P.O. BOX N-7502 
Nassau, Bahamas 
P.O. Box N-7125 
Nassau, Bahamas 
P.O. BOX SS-6263 
Nassau, Bahamas 
P.O. BOX N-7537 
Nassau, Bahamas 
General Financing Availability:  Bahamian banks tend to be far more 
conservative than their American counterparts in making business loans, 
often asking for high levels of collateral.  At the end of 1993, the 
prime lending rate in The Bahamas was 7.25 percent.  Commercial bank 
rates for consumer loans ranged from 14.23 to 18.23 percent, for 
residential mortgages from 10.65 to 12.38 percent, for commercial 
mortgages from 10.25 to 11.58 percent, and for "other local loans" from 
9.61 to 12.12 percent. 
Business customs:  The national language of The Bahamas is English, 
sometimes spoken with a distinctive local accent and the use of colorful 
local expressions.  Due to the proximity of The Bahamas to the US and 
the extensive familiarity of most Bahamians with Americans and American 
culture, business customs tend to be similar to those in the United 
States.  Business dress is more formal in The Bahamas than elsewhere in 
the Caribbean or in Florida; a business suit and tie is recommended for 
men and conservative business dress for women.  Business attire 
generally follows the standards of the northeastern United States.  
Bahamians shake hands upon meeting,  sometimes exchange business cards, 
and address first-time business acquaintances by their last names.  
Conversations generally move to a first-name basis a bit more slowly 
than in the United States.  Prior appointments for business meetings are 
advisable.  Although Bahamians are not punctual for meetings, foreign 
visitors should be punctual. 
Bahamian society bears some similarities to that of small-town America, 
with an occasional air of provincialism.  Bahamians unaccustomed to 
dealing with foreigners may shy away from trusting the intentions of 
foreign visitors at first, in part because of previous business dealings 
gone awry. 
In addition, The Bahamas is very much a consensus-driven society, in 
which people often disguise personal feelings beneath a surface 
cordiality.  Business meetings in The Bahamas tend to be very pleasant 
and Bahamians often end a meeting with an air of agreement even if real 
differences remain.  Thus, Bahamian partners may still retain some 
reservations even after meetings that ended with firm handshakes and 
pleasantries.  Bahamians at the middle levels of business or government 
must often gain final approval from more senior officials. 
Bahamian businesses tend to operate on a tighter financial margin than 
their American counterparts, often juggling financing from one 
commitment to another. Therefore, for initial or large sales, a 
businessman should require a deposit against future payment for goods or 
services delivered, and expect that some delays may occur with 
subsequent payments. 
Business lunches are common in The Bahamas, and invitations to discuss 
matters over lunch in a quiet restaurant are generally accepted.  
Bahamians tend not to drink very much at business lunches and usually 
expect the lunch to last between an hour and an hour-and-a-half.  
Business dinners are relatively rare, and Bahamians do not generally 
invite new acquaintances to their homes.  When they do so, dinners at 
the homes of well-to-do Bahamians tend to be elaborate and formal 
affairs, at which business attire for men and conservative evening wear 
for women is appropriate.  A small gift for the hostess, such as 
flowers, and a follow-up thank you note are appropriate acknowledgments. 
Acceptable topics of conversation include:  sports; the tourist 
business; the beauty of the islands; the weather; and unique or 
distinctive aspects of Bahamian culture such as the local cuisine, 
junkanoo, local music, art, architecture, and history.  While Bahamians 
are comfortable with discussing most topics, visitors to The Bahamas 
should avoid discussing drug trafficking and race relations during 
initial contacts. 
Since much of Bahamian social life revolves around church, an invitation 
to a church service is a sign of personal respect and affection.  Many 
churches in The Bahamas have proud traditions of gospel choir singing, 
and church services can be quite lively.  Dress at church services is 
usually formal with   conservative business suits for men and colorful, 
sometimes elaborate dresses for women. 
Travel advisories and visas:  American citizens do not require a 
passport or visa to enter The Bahamas, but proof of citizenship such as 
a birth certificate or voter registration card accompanied by a photo ID 
is required, as well as a return ticket to the United States.  In mid-
1994 there were no current travel advisories for The Bahamas.  American 
citizens traveling to an area where they may have some concern about 
local conditions can contact the State Department's citizens emergency 
center at tel. (202) 647-5225 to learn of any current advisories. 
Business infrastructure:  Both Nassau and Freeport boast a wide variety 
of excellent hotels and resorts.  Although Bahamian hotels are more used 
to catering to the vacationer rather than the business traveler, many 
large hotels have business centers.  Even hotels without such centers 
will be happy to arrange for fax transmissions, office and conference 
facilities, and other business services.  Electricity is 110 v, 60 Hz 
(US standard).  Taxis are plentiful near hotels and downtown, and radio 
taxi services are available.  Some taxi drivers are willing, for a 
prearranged fee, to spend the entire day with a single customer.  Car 
rentals are also available, albeit far more expensive than the American 
norm.  Bahamians drive on the left side of the road, as in Great 
Britain, even though most cars in The Bahamas are imported from or 
through the United States and have left-hand drive (US standard).  
Nassau has two large, modern hospitals, and there is one in Freeport; 
Nassau's privately-owned doctors hospital is widely regarded as the best 
medical facility in The Bahamas.  No special health precautions or 
vaccinations are necessary.  Tap water is potable but brackish; most 
Bahamians prefer one of the locally-produced brands of bottled water.  
As major resorts, both Nassau and Freeport have a wide variety of 
restaurants ranging from local franchises of American fast-food chains 
to expensive five-star gourmet palaces.  Local cuisine tends to favor 
freshly-caught seafood, particularly using grouper, lobster (locally 
known as "crawfish"), and conch (a Caribbean shellfish), but American 
and ethnic cuisines such as Chinese and Italian are also available. 
-- New Year's Day (January 1) 
-- Good Friday (Variable) 
-- Easter Monday (Variable) 
-- Whit Monday (Seven Weeks After Easter) 
-- Bahamian Labour Day (First Monday In June) 
-- Independence Day (July 10) 
-- Emancipation Day (First Monday In August) 
-- Discovery Day (October 12) 
-- Christmas Day (December 25) 
-- Boxing Day (December 26) 
Holidays which fall on Saturday or Sunday are usually observed on the 
following Monday.  Persons present in The Bahamas on the night of 
December 25-26 or December 31-January 1 can enjoy a unique cultural 
experience by purchasing tickets to the annual junkanoo parade in 
downtown Nassau, a carnival similar to Mardi Gras of which Bahamians are 
justly proud. 
X.  Appendices 
A.  Country data: 
Population:  273,055 
Population growth rate:  1.57 percent. 
Religions:  Baptist 35 percent, Roman Catholic 20 percent, Anglican 15 
percent, Evangelical Protestants 15 percent, Methodist 5 percent, Church 
Of God 5 percent, miscellaneous 5 percent. 
Government system:  multi-party parliamentary democracy. 
Languages:  English. 
Workweek:  Monday through Friday.  Shops are generally open all-day 
Saturday; Sunday closing laws are strictly observed, although groceries 
are permitted to open for a few hours on Sunday morning. 
B.  Domestic economy:  (in millions of US dollars unless otherwise 
indicated.  NB:  B$1 equals US$1) 
                                      1992    1993   1994 
GDP (current value)                   3059    3065    n/a 
Per Capita GDP                       11633   11588  11610 
GDP Growth Rate                     est.2%     n/a    n/a 
Government Spending as % of GDP        n/a     n/a    n/a  
Inflation(%)                           5.7     2.7    1.3 
Unemployment(%)                       14.8    13.1    n/a 
Foreign Exchange Reserves            173.8   145.9   164.2 
Average Exchange Rate for USD 1.00       1       1       1 
Debt Service Ratio                     n/a     n/a     n/a 
US Military/Economic Assistance        n/a     n/a     n/a 
C.  Trade:  (in millions of US dollars unless otherwise indicated) 
                                     1992  1993    1994 
Total Country Exports               310.2  256.8  223.8 
Total Country Imports              1069.3 1080.9 1081.7 
US Exports                          712.6  704.1    n/a 
US Imports                          470.4  585.3    n/a 
D.  Investment Statistics (refer to Section VII) 
E.  US and Country Contacts 
US Embassy Trade Related Contacts: 
US Embassy Nassau 
Economic-Commercial Section 
7415 NW 19th St. 
Suite H 
Miami, Fl. 33126 
US Department of Commerce 
Desk Officer for The Bahamas 
Room H 3021 
Washington, DC 20230 
US Department of Agriculture 
Office of International Cooperation and Development 
Private Sector Relations 
McGregor Building 
Room 343  
14th and Independence Ave., SW 
Washington, DC 20250-4300 
Overseas Private Investment Corporation 
1615 M Street, NW 
Washington, DC 20527 
Trade and Development Program 
US Department of State 
2201 C Street, NW 
Washington, DC 20523 
Key Bahamian Government Offices: 
Embassy of the Commonwealth of The Bahamas 
2220 Massachusetts Avenue, NW 
Washington, DC 20008 
Bahamas Agricultural and Industrial Corporation 
P.O. Box N 4940 
Nassau, Bahamas 
Ingraham Building 
25 S.E. Second Ave. 
Miami, FL 33131 
Ministry of Agriculture, Trade and Industry 
P.O. Box N 3028 
Nassau, Bahamas 
Government of the Commonwealth of The Bahamas  
Consulate      General 
Ingraham Building 
25 S.E. Second Avenue 
Miami, FL 33131 
Bahamas Chamber of Commerce 
P.O. Box 665 
Nassau, Bahamas 
F.  Market Research: 
     A complete list of market research is available on the National 
Trade Database. 
G. Trade Event Schedule: 
     Franchise Video/Catalog Show 
     September 1995 
     Bahamas Agricultural Industrial Trade Show 
     May 1996 
Because trade event schedules may change, firms should consult the 
export promotion calendar on the National Trade Database or contact the 
post for the latest information.
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