Its ability to realise this vision has much to do with a number of strengths that define its society and its state, including:
1. Its history as a trusted partner for the international business community and families worldwide, due in large part to an outstanding record of political stability, progress and stewardship, status as an independent territory providing an efficient basis of common law, and a longstanding commitment to its clients and the industry.
2. Its ideal location – at the crossroads of the Americas, with a time zone that is convenient for most of the major centres in the Americas.
3. Its physical resources of land, premises and fit-for-purpose infrastructure, all located in one of the most idyllic settings in the world.
These strengths are important to both practitioners and clients in business in general, but financial services in particular. As they remain true of The Bahamas, these assets reinforce its continuing boast as a clear choice for this industry.
The Bahamas’ continuing stability in national governance has always been a hallmark of its favourable business environment. In May 2018, The Bahamas held national elections, which resulted in a change of administration. The transition and approach to addressing important issues in the financial services sector was seamless. One example is the new government’s approach to the Common Reporting Standards (CRS). The former administration adopted a bilateral position on the CRS in 2014, took account of the change in the Hong Kong position in 2017, but could not commit to a change in policy on the eve of a general election. Following the election, the new administration adopted a pending decision to adopt a multilateral route with the full support of the opposition party. The private sector appreciates that it can engage both parties on key policy concerns and that successive governments have been able to respond without contention. There is a consistent philosophy across party lines that a well-regulated market and a responsive industry are good for the country.
From pre-independence to the current day, The Bahamas has largely remained open to inward foreign direct investment and long-term residency in particular. For decades, The Bahamas has given accelerated consideration of permanent residency to international persons investing a minimum of US$1 million in capital in the country, whether it is in the purchase or construction of a home, or the establishment of a business. Indeed, this policy served as an impetus to the growth of the financial services sector. As the number of internationals wanting to establish The Bahamas as their first or second home increased, so too did the demand for financial services to meet their needs. In almost every sphere of human endeavour – from property development, health facilities, office accommodation and education facilities – The Bahamas has grown in its capacity to meet the increasing demands of a bourgeoning international resident community, and continues to do so.
Key players in responding to this need include Lyford Cay and Albany Bahamas. Both are high-end luxury developments where international clients are able to work, live, train, school and play. Lyford Cay is a 1,000-acre secure enclave with high end residences, an 18-hole golf course designed by Rees Jones, a state-of-the-art tennis centre, a well protected 74-slip Yacht Harbour, white sand beaches, and world class dining venues. Albany, founded by Joe Lewis, Tavistock Group, Tiger Woods and Ernie Els, is a luxury resort community set on 600 ocean-side acres, housing a boutique hotel, a variety of residences that include beach front, beach club and golf course custom homes, equestrian ranchettes and luxurious marina apartments. It also features a mega-yacht marina, an 18-hole championship golf course designed by Ernie Els, an equestrian centre, a beach club, a full-service spa and fitness centre and a family water park.
The Bahamas also continues to be ideal for establishing family offices. Its excellent legislative regime allows for family offices to operate as a business pursuant to the Bahamas Investment Authority, or under the regulatory ambit of the Inspector of Financial and Corporate Service Providers or the Bahamas Securities Commission. Under the provisions of Bahamian law, family members and staff members can live and work in The Bahamas within the family office. To support the establishment and ongoing operations of family offices, The Bahamas has excellent professional providers. Through comprehensive operational support, the family office is able to have ‘boots on the ground’ support for governance, accounting, compliance as well as corporate and concierge services.
In partnership with the private sector, The Bahamas government remains vigilant in responding to the needs and demands of international financial services clients. Its legislative efforts in this regard are proof of the same. In 2014, the government passed the Investment Condominium Act (ICON). This alternative legal structure for investment funds provided another level of sophistication to the country’s financial services regime. In addition to ICON, a host of banking, trusts, securities and insurance laws have been upgraded to ensure that The Bahamas is both at the cutting edge of the industry and blue-chip in its regulations, a balance achievable only through public/private partnership.
The Bahamas’ government has also provided a new and exciting feature to its investment promotion offerings by recently passing the Commercial Enterprises Act. This law provides many types of investor with a host of incentives, including easy facilitation of international staff for their operations. Areas approved for such enterprises are captive insurance, reinsurance, mutual fund administration, arbitration, wealth management, international trade, international arbitrage, computer programming, software design and writing, bioinformatics and analytics, maritime trade, Nano technology, biomedical industries, boutique health facilities, data storage or warehousing, aviation approved maintenance operations, aviation registration, call centres and manufacturing and assembly of manufactures. The law is yet another indication that The Bahamas is poised for growth and is ready to welcome and facilitate the needs of investors seeking to participate in that growth.
The Bahamas’ geopolitical positioning, global financial and legal infrastructure and professional community make it a continuing clear choice for servicing the needs of the international community. Over the past 15 years, there has been over US$10 billion in foreign direct investment (impressive for a country which has a population of less than 400,000). Whether utilising its near-shore positioning, trusted corporate structures and financial services sector, significant funds have been deployed in business around the world from the Bahamas. The Bahamas is an investment oasis for innovative and sophisticated investors whose investment needs can be served by a cadre of professional providers in the country.
Wendy Warren is managing director of Caystone Solutions. Wendy served for 11 years as CEO and Executive Director of the Bahamas Financial Services Board (BFSB). BFSB works with The Bahamas government, regulators and private industry to ensure The Bahamas provides global clients with best in class financial services. Beginning her professional career in 1988, Wendy has worked in a variety of roles in the fund administration, wealth management and audit fields. She has served on various boards and committees including Bahamasair Holdings, Bahamas Electricity Corporation, Bahamas Trade Commission, the Financial Services Consultative Forum and the Bahamas Association of Mutual Fund Administrators. Wendy is a Chartered Accountant and holds a Bachelors Degree in Accounting from the University of Waterloo, Canada.