The Bahamas is one of the wealthiest countries in the Caribbean. The economy is fueled by tourism and banking. Many foreigners invest in The Bahamas specifically for these sectors. However, past government regulations have made doing business very challenging. At the start of 2018, The Bahamas ranked very low on the ease of doing business index. In responses to political changes and recent hurricanes, the new prime minister has been cutting red tape for businesses in the common wealth. As an entrepreneur interested in doing business in the Bahamas, you will need to meet these requirements to run an international operation.
Submit A Proposal To The Bahamas Investment Authority
In order to establish a business in The Bahamas, entrepreneurs need approval from the Bahamas Investment Authority (BIA). For foreign investors, there is a minimum BS$500,000 investment for approval. Secondly, the business should be in an industry that isn’t reserved for Bahamian citizens only. Based on your proposal, the BIA would check with various ministries including environmental, housing and transportation. Within 60 days of submission, the BIA will respond with a written notice about approval or rejection for your business in the Bahamas.
Establish A Bahamas Limited Liability Company
Next, entrepreneurs should establish a business entity such as a Limited Liability Company. These types of business entities are commonly used in the Bahamas. Still, you should choose which business structure is best for your business and tax situation.If you choose to register an LLC in The Bahamas, prepare the names and addresses of all owners, including officers or directors. Then, file a memorandum with all the names and the articles of association to the Registrar General’s Department. The filing fee costs $330 for the memorandum and articles of association. Similar to other government requirements, LLC owners have to an annual renewal fee of $350. You can register your LLC in just one business day.
Register With The National Insurance Board To Hire Employees
Once the company is approved and established, owners must register with the National Insurance Board (NIB). The NIB is responsible for wages related to sickness, injury or maternity leave. All employees within The Bahamas are required to make NIB contributions. As an employer, you must register with the NIB so that each employee contribution is accounted for. Additionally, the employer must also contribute 5.9% to the program as well. This is an essential step to legally hiring and compensating employees in The Bahamas.
Partner With Shipping Services For Customs Clearance
When doing business in The Bahamas, you will need to import products, materials and supplies. Each shipment requires payment of taxes, duties and customs charges. Of course, all of these shipping charges significantly impact product or service margins. Rather than importing important items on your own, you can partner with package consolidation services. Partners like BluePostal work with your business to stay compliant with customs and import regulations. They will consolidate all of your procurement into one shipment and provide dedicated support to meet all of the customs requirements. In order to operate a business successfully in The Bahamas, your business should partner with shipping or logistics companies to acquire necessary materials, supplies or equipment.
Stay Compliant By Following VAT Taxation Laws
After setting up the company with employees and suppliers, the Bahamas business must stay compliant with taxation. In the common wealth, certain goods and services are subject to a 12% value added tax, or VAT. If your business does over BS$100,000.00 in revenues, you would be legally responsible to collect VAT from customers. Even if your business does not meet the threshold when starting out, you can still register with the government comptroller. This would allow you to collect VAT and stay compliant as the business grows.
There are several requirements to start doing business in the Bahamas. If you are planning on relocating your business internationally or starting a new one, follow the rules so that your business will operate successfully. Firstly, you need to gain approval from the BIA on your business proposal. Then, you can establish a Bahamas limited liability company. In order to hire and pay employees, register with the National Insurance Board to make NIB contributions. When importing international goods, follow all of the customs regulations by partnering with an established shipping company. Finally, as your sales increase, stay compliant by collecting and reporting VAT accurately. In addition to providing a worthwhile product or service, these are the major requirements to doing business in The Bahamas.