The Bahamas lie in the same island chain as Cuba, Hispaniola and the Turks and Caicos Islands; with a population of 353,658, its capital is Nassau. In terms of GDP per capita, the Bahamas is one of the richest countries in the Americas, according to publications by the CIA, with a GDP per capita estimated at $22,352 by the IMF in 2011. The nominal GDP of the Bahamas was estimated at $7.787 billion in 2011, by the IMF. Something which at first might seem insignificant, but is actually quite astonishing considering that the total population of the Bahamas is not more than half a million people. The Bahamian economy is almost entirely dependent on tourism and financial services to generate foreign exchange earnings. Tourism alone provides an estimated 60% of the GDP and employs about half the Bahamian workforce. In 2004, over half a million tourists visited The Bahamas, most of whom are from the United States.
Financial services constitute the second-most important sector of the Bahamian economy, accounting for up to 17% of GDP, due to the country’s status as an offshore financial center. Agriculture and fisheries industry together account for 5% of GDP. The Bahamas exports lobster and some fish but does not raise these items commercially. There is no largescale agriculture, and most agricultural products are consumed domestically. The Bahamas imports more than $250 million in foodstuffs per year, representing about 80% of its food consumption. The government aims to expand food production to reduce imports and generate foreign exchange. It 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 shrimp farming as the areas in which it wishes to encourage foreign investment. The Bahamian Government maintains the value of the Bahamian dollar on a par with the US dollar. The Bahamas have also signed several free trade agreements with the US and Canada. As a result, doing trade with the Bahamas is particularly easy for American businesses.
The Bahamas is largely an import/service economy. There are about 110 U.S.-affiliated businesses operating in the Bahamas, and most are associated with tourism and banking. With few domestic resources and little industry, the Bahamas imports nearly all its food and manufactured goods from the United States. American goods and services tend to be favored by Bahamians due to cultural similarities and heavy exposure to American advertising. The Bahamas offers attractive features to the potential investor: a stable democratic environment, relief from personal and corporate income taxes, timely repatriation of corporate profits, proximity to the U.S. with extensive air and telecommunications links, and a good pool of skilled professional workers. The Government of The Bahamas welcomes foreign investment in tourism and banking and has declared an interest in agricultural and industrial investments to generate local employment, particularly in white-collar or skilled jobs. The country’s infrastructure is best developed in the principal cities of Nassau and Freeport, where there are relatively good paved roads and international airports. Electricity is generally reliable, although many businesses have their own backup generators.
Overall, the economy of the Bahamas is great to do business and trade in. The World Bank ranked it as the 85th easiest country to do business in for 2012. In the same survey, the World Bank ranked it at 48th for trading across borders. The Bahamas has no income tax, corporate tax, capital gains tax, value-added tax , or wealth tax. The best U.S. 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 U.S. With approximately 85% of the population of primarily African descent, there is a large and growing market in the Bahamas for “ethnic” personal care products. Merchants in southern Florida have found it profitable to advertise in Bahamian publications. Most imports in this sector are subject to high but nondiscriminatory tariffs. The Bahamas market can be summed up in 5 key points.
1. Low or Minimal taxes
2. Great business friendly enviornment
3. Rich market
4. Multiple areas of opportunity
5. Great geographical location