The Bahamas: The Clear Choice for International Financial Serivces

The country’s mature financial services industry, established infrastructure, progressive government, tax- neutral environment and luxury lifestyle have all been carefully cultivated to satisfy the specific needs of this most exclusive clientele. The many advantages of doing business in The Bahamas are as clear as the crystal waters surrounding the 700 islands of the archipelago:

Strategic Location

The Bahamas is situated at the Crossroads of the Americas, just 65 miles off the east coast of Florida. It is an ideal hub for regional investment and business in the Eastern United States and Canada, and much of Central and South America.

Political and Economic Stability

The Bahamas has an outstanding record of political and economic stability, progress and stewardship. With more than 280 years of uninterrupted parliamentary democracy, it has been an independent nation since 1973, and retains a Westminster-based system of Government and an English-based legal system.

Wealth and Asset Management Options

The Bahamas offer owners of capital a broad choice of financial institutions that deliver myriad services including banking, private banking and trust services, investment fund administration, capital markets, investment advisory services, accounting and legal services, e-commerce, insurance and corporate and shipping registries.

Physical Resources

The Bahamas has developed its land, premises and fit-for-purpose infrastructure with the singular focus of facilitating international business.

Human Capital

The Bahamas has a highly educated local workforce and a long tenure in financial services excellence which has created a deep pool of skill and experience that is recognised and trusted worldwide.

Investment Policy and Incentives

The Bahamas’ government is committed to building an economic environment in which free enterprise can flourish.

Regulation: Committed to Compliance

The strong regulatory regime that characterises the financial services sector ensures that the integrity of The Bahamas as an international financial centre is maintained.  As a sovereign nation for more than 40 years, successive governments have consistently demonstrated the country’s commitment to international best practices, cooperation in the administration of justice, international tax transparency, anti-money laundering, and the countering of financial terrorism initiatives.  Bahamian regulators are well regarded and active partners with international peer groups and agencies. There is collaboration between government and private sector to ensure The Bahamas remains a well regulated, blue chip international financial centre.

The regulatory regime governing the financial services industry of The Bahamas embodies, as they say, not only ‘the letter’ of international best practices, but indeed ‘the spirit’ of the overarching regulatory principles. The Bahamas’ approach to the evolving international regulatory environment has been participatory and proactive, including the country’s leadership in advancing the principle of a ‘level playing field’.

Broadly, global regulatory initiatives have revolved around three issues: combatting misuse of the financial system; making it more difficult to evade taxes; and increasing transparency. Sweeping regulatory reforms in 2000 and continued measures to strengthen compliance, in step with international efforts, has characterised the jurisdiction’s anti-money laundering/counter financing of terrorism (AML/CFT) regulatory structure. Ongoing strengthening includes the jurisdiction’s compliance and commitments to the Caribbean Financial Action Task Force (CFATF) and the Financial Action Task Force (FATF). The FATF’S mutual evaluation report (MER) of The Bahamas was adopted in May 2017. In December 2018, in its 1st Enhanced Follow-up Report (FUR), the FATF acknowledged The Bahamas’ progress in addressing certain technical compliance deficiencies which were identified in The Bahamas’ MER. Favourable re-ratings were given on 13 recommendations.

In line with the global requirement, The Bahamas has also been in compliance with the United States’ Foreign Accounts Tax Compliance Act (FATCA) since 2014. The Bahamas is also a participant in The Multilateral Convention on Mutual Administrative Assistance in Tax Matters/The Common Reporting Standard and is implementing the Base Erosion and Profit Shifting (BEPS) Initiative’s Minimum Standards. Legislation was also passed in December 2018 to introduce substance requirements for commercial entities, eliminate preferential regimes and to ensure timely access to adequate, accurate and current beneficial ownership information.

Expertise: Private Wealth Management

 With more than 80 years of expertise in financial services, few jurisdictions offer the wealth management experience that The Bahamas has to offer.  This heritage is the basis for the strong legal framework that has been cultivated for financial services, an investment climate that has been nurtured through years of maturity, and a stable and predictable business environment anchored by the thousands of Bahamian wealth management professionals who work side-by-side with expatriate colleagues in the more than 250 financial institutions that call The Bahamas their home.

Private wealth management continues to be the centre stage for financial services in The Bahamas facilitated by a diverse suite of products of which banking and trust services are the centrepieces.

Innovation: Compliant Client Solutions

Market responsiveness has long been a part of The Bahamas’ DNA as a forward thinking IFC, and has been the basis of legislation creating innovative, client-centric products and services in a modern, compliant regulatory regime.

Such innovation can be seen in the country’s evolving and often ground-breaking trust legislation. It has also thrust The Bahamas into the forefront of the investment funds industry with the introduction of SMART Funds and the Investment Condominium (ICON) fund. 

Location: Live, Work and Play

The unique geographical location of The Bahamas, just 50 miles off the coast of Florida and positioned as the gateway to the wider Americas, is an undeniable advantage for The Bahamas.  

 In recent years, as more and more individuals have chosen to follow their money’, with respect to where they live and work, The Bahamas has become the preferred choice for many who yearn for an excellent quality of life whilst being able to manage their financial affairs. Individuals, family offices and institutions will find a warm welcome when they come to The Bahamas as the country is committed to utilising its natural resources and cultivated assets to create an environment that is attractive to business and the enjoyment of life.

One of the newest and most popular investment vehicles is the condotel, a condominium or single- family residence that converts into fully-furnished, upscale accommodations, managed by a resort company and rented when not owner occupied.

The Bahamas is a service economy accustomed to providing concierge residential management services for homeowners who are not in residence.

Direct flights are available to The Bahamas from 18 U.S. cities, Canada, the UK, Europe and Panama; and the country has numerous ports of entry and marinas.

Commercial passengers, private jets and goods shipped from Freeport enjoy pre-clearance to the United States. U.S. pre-clearance for commercial passengers also exists from Nassau.

Residency

The Bahamas has a pathway to permanent residency (which is not the same as citizenship or tax residency). Permanent Residency allows individuals to enter, live and work in The Bahamas. The Bahamas Government maintains a flexible immigration policy suited to the needs of international firms, individuals and families.  Permanent residents can pass freely through Immigration and remain in The Bahamas for the number of days the permanent resident desires. Spouses and children can be endorsed on the permit for a one-time government fee.

Currently the investment threshold for economic permanent residence is $750,000 BSD (the Bahamian dollar is on par with the US dollar) on resident property. Permanent residency with the right to work in one's own business is usually suited to the individual with a family office or one who simply wants to manage investments or a business that does not interact with the Bahamian economy. This status means that an individual automatically qualifies for the right to work in The Bahamas. With an investment of $1.5 million BSD or greater there is an expedited application process.

’Annual residence’ is another alternative of residency and, as the name suggests, it is renewed annually. Applying for a ’homeowners resident card’, while not conferring any of the privileges of permanent resident, assists the holder to move freely through Immigration at any port of entry.

The Clear Choice

The Bahamas’ strong regulatory regime and its historic determination to ensure its integrity as an international financial centre, as evidenced by its most recent commitments, reflect the mindset of a jurisdiction focused on protecting and cultivating its key assets. Regulation, as it relates to international initiatives, is the canvas upon which The Bahamas’ wealth management expertise, innovative client-centric products and services, and unique geographic tropical location combine to make it an increasingly clear choice for institutions and individuals seeking a premier provider of financial services.

Dr. Tanya C McCartney
Dr. Tanya McCartney is a UK trained barrister and chartered banker who since 2016 has served as the CEO and Executive Director at the Bahamas Financial Services Board. Over the past two decades Tanya has distinguished herself as a hardworking professional with expertise in the law, regulatory and gaming compliance, risk management, banking, and international financial services. She holds a Doctor of Business Administration from Edinburgh Napier University (Scotland, U.K.) for a programme of work entitled “Perspectives on Leading change: Exploring Change Readiness Strategies used in the Bahamian Financial Services Sector”. Tanya was appointed to the Senate of the Commonwealth of the Bahamas in 2001 being one of the youngest persons ever appointed to the Upper House where she served for five years. She vied for a seat in parliament in the 2002 general elections. She is a former President and founding member of the Bahamas Association of Compliance Officers. She is the co-chairman of the Bahamas Chapter of the global Association of Certified Anti-Money Laundering Specialists. Tanya is also an adjunct professor in the School of Business at the University of the Bahamas. She has served on several government boards over the years including The Public Hospital’s Authority, The University of The Bahamas and currently serves as Chairman of The Police Complaints Inspectorate and Deputy Chairman on The Airport Authority.