Bahamian
exports of non-oil
merchandise ($194.33
million in 1992) was primarily
composed of pharmaceuticals, crawfish, salt, cement, rum,
argonite, residual fuel oils, distilled fuel, cascarilla
bark, tomatoes and citrus. Major destinations for
Bahamian exports are the USA, the UK/European Community,
and Japan.
Much of The Bahamas Government's revenue comes from customs duties, as much as 70% being derived from duties on imports. As such, rules and regulations governing imports are necessarily complex. It is, therefore, advisable that enterprises seeking to trade with The Bahamas retain the services of a customs broker prior to importing goods into the country.
Notwithstanding the complexity of the regulations and rules regarding imports, generally The Bahamas has a liberal trade policy. There are no specific laws governing foreign trade.
Balance of Payments
The Bahamas' balance of trade position has been generally favorable over the last decade, registering surpluses in many of those years. This was due largely to the financing of deficits on the visible trade account by surpluses on the non-factor services account, of which tourist revenue represents the largest share. In recent times, a narrowing visible trade deficit has been offset by declines in the invisible trade surplus, due to decreases in earning from tourism, the country's major foreign currency earner. The balance of payment on the visible trade account in 1992 was about -$805 million, while that of the non-factor services account was about $675 million.
Exports
Bahamian exports of goods and services in 1992 amounted to $1404.78 million, of which tourists receipts accounted for $1056 million. Exports of non-oil merchandise, which accounted for some $194.33 million in 1992, was primarily composed of pharmaceuticals, crawfish, salt, cement, rum, argonite, residual fuel oils, distilled fuel, cascarilla bark, tomatoes and citrus. Major destinations for Bahamian exports are the USA, the UK/European Community, and Japan.There are no controls in The Bahamas exercised over exports, and there are no export taxes levied on the same. Exported goods may be reimported into The Bahamas without payment of customs duty, provided an appropriate certificate is obtained from the Customs Department Where goods imported into The Bahamas will be reexported, the goods may be held in bond on payment of minimal fees.
The Bahamas participated in a number of preferential trade arrangements that provide concessionary access of goods produced in The Bahamas to major world markets. The Caribbean Basin Initiative, established under former US President Ronald Reagan, allows over 3,000 types of products duty-free entry into the USA, provided that at least 35% of the products' value had been added in The Bahamas at the time of entry into the USA. Similar treatment for Bahamian exports is granted through the CARIBCAN, a Canadian programme. Bahamian exports can also find such favorable treatment in European markets through the LOME Convention. The Customs Department, embassies or consular offices may provide certificates of origin as required in respect of these arrangements.
Under the Export Manufacturing Industries Encouragement Act, an approved manufacturer who intends to export or annually exports at least 95% of the total approved products produced by the manufacturer is afforded duty-free import of raw materials, equipment and building supplies used in the manufacture of the product or facilities for the same and duty-free export of those products.
Imports
Bahamian imports of goods and services in 1992 amounted to $1688.55 million, of which import of merchandise accounted for $1329.3 million. Imports were comprised primarily of foodstuffs, motor vehicles, oil, animal feed, petroleum products, clothing, machinery and appliances. The USA remains the major trading partner of The Bahamas, receiving almost $800 million in export receipts. Foodstuffs account for about $250 million of the imports from The United States.There are no quotas in The Bahamas on imports, and the only protective duties applied are in respect of agricultural products in season. For most imports, only exchange control permission to pay for goods concerned is required. Gaming machines and firearms cannot be imported without prior acquisition or import licenses. The importation of items such as infected cattle, spoiled meats, and those items that bear a similar design to Bahamian currency is prohibited.
There are no prohibitions of imports with regard to country of origin, nor in normal circumstances is trade with any particular country prohibited. All designations of imports are made by Bahamian regulation, without reference to the 1988 Harmonized Commodity Description and Coding System for classifying imports and for customs duties purposes, which has not been adopted by The Bahamas.
Customs duties are fixed by Bahamian regulation. Generally, the rate of duty levied on imports is 33%, but other rates are applicable. Duties in The Bahamas must be paid on entry of individual import consignments.
Under the following investment incentive legislation, building materials, equipment, and approved raw materials can be exempted from payment of customs duties: The Industries Encouragement Act, The Tariff Act, The Hotels Encouragement Act, The Free Trade Zone Act, The Spirits and Beer Manufacturers Act, and The Agricultural Manufacturers Act.
Import/Export Opportunities
The proximity of The Bahamas to major world markets, such as North America, and the access which it has to other major markets around the world through referential trade agreements, makes it a primary location for the production of goods and services for export. Areas targeted for production for exports include agro-products, computer products, pharmaceuticals, toys, high fashion garments, data processing goods, etc.While the Government seeks to reduce The Bahamas' import bill, it is recognized that due to various constraints, The Bahamas will continue to import a large number of items to meet consumer demands. This creates a number of opportunities for foreign exporters. Major products for export to The Bahamas include data processing equipment, computers and electronic goods, hotel and restaurant equipment, automobile parts, some foodstuffs (meats and vegetables), and baby products.
The Government welcomes opportunities for greater trade with The Bahamas, particularly those that increase exports from The Bahamas or reduce the country's import bill. As such, the following business proposals are welcome:
- those establishing manufacturing facilities in
The Bahamas for export products;
- those that provide technology the improves the
production of goods already manufactured in The
Bahamas;
- those that can supply products at a more competitive price than existing foreign suppliers.
Restrictions
It should be noted that under the National Investment Policy of The Bahamas, the following are among some of the areas of the Bahamian economy in which non-Bahamians may not participate:
- Wholesale and Retail Operations.
- Commission agencies engaged in the import/export trade.
Incentives
The Bahamas offers freedom from personal income, capital gains, inheritance, withholding, corporate earnings, sales, dividends, interest, profit remittance, and royalties taxes. This freedom is enjoyed by resident corporations, partnerships, individuals, non-resident and non-resident controlled Bahamian entities and trusts.Persons manufacturing goods in The Bahamas can enjoy exemption from the payment of customs duties on building materials, equipment and approved raw material, business licensing fees, and real property taxes for periods up to twenty years. Such exemptions are afforded under legislation such as The Export Manufacturing Industries Encouragement Act, The Industries Encouragement Act, The Tariff Act, The Hotels Encouragement Act, The Free Trade Zone Act, The Spirits and Beer Manufacturers Act, and The Agricultural Manufacturers Act.
Businesses located in The Bahamas may benefit from the following preferential trade arrangements: the LOME Convention, the General System of Preferences (GSP), CARIBCAN, and the Caribbean Basin Initiative.
Establishing a Trade Office in The Bahamas
There is no specific legislation in That Bahamas that regulates the activities of commercial agents. Agreements entered into by agencies are bound by Bahamian commercial law, which is based on English common law. The contractual relationship between a principal and an agent is essentially a private one, excluded from ordinary interference by the Government or its agencies. Bahamian lawyers should be used in the incorporation of such matters as commission rates, exclusive dealerships, rights and obligations of parties on the termination of the agency, into a written agreement.Generally, a non-Bahamian seeking to establish a business in The Bahamas should acquire the services of a local attorney, who can advise as to the appropriate business form and draft up legal documents (memorandum and articles of association) necessary to incorporate a business. Businesses may take the form of a sole proprietorship, partnership, joint venture, or limited company (Domestic Limited Company or International Business Company), the latter being the form of choice for non-Bahamian investors.
To facilitate contact with local suppliers, producers, potential joint venture partners or potential technology transfer agents, contact should be made with the Bahamas Chamber of Commerce, the Bahamas Light Manufacturers Association, or the Bahamas Agricultural and Industrial Corporation. Additionally, advertising might be made in local news media in order to appeal to a wider audience.
Persons seeking to establish a trade office in The Bahamas should contact the Bahamas Investment Authority (BIA) for additional information.
Other important addresses:
- The Bahamas Chamber of Commerce
Shirley Street & Collins Avenue
P.O. Box N665
Nassau, N.P., The Bahamas
Tel: (242) 322-2145
Fax: (242) 322-4649
Bahamas Light
Industries Council
c/o P.O. Box SS5599
Nassau, N.P., The Bahamas
Bahamas Agricultural & Industrial
Corporation (BAIC)
Levy Building
P.O. Box N4940
Nassau, N.P., The Bahamas
Tel: (242) 322-2740
Fax: (242) 322-2123
