The Bahamas, a cluster of Caribbean islands off North Eastern America is an attractive place for investors and company start-ups alike due to its 0% corporate tax.
However, The World Bank has recently ranked it at only 118 out of 189 at ease of starting a business. This ranking has declined significantly from 96 in 2015. It does not rank well even against other countries in the region. For example the rating for Jamaica in 2016 is 9.
While other countries have been streamlining their company startup procedures, the Bahamas has introduced a reform in 2015, making it more difficult. This is primarily due to a new regulation that requires companies to register for value added tax (VAT) which went into effect from 1st January 2015. Any company with an annual turnover of B$100,000 or that is seen to have the potential to reach this turnover must register and pay and collect vat of 7.5% on all goods and services.
Another contributor to the negative ease of doing business ranking is dealing with construction permits as building permit fees were increased in 2015.
The ease of doing business in The Bahamas report is not all negative however. There have been improvements in the areas of paying tax and trading across borders. The Bahamas introduced a reform in the last year which has reduced the cost of business licence tax which makes overall tax payable less. Additionally, The Bahamas introduced an electronic system to handle import and export documentation, making cross border trade faster and more efficient.
Another area of improvement in recent years has been in the area of enforcing contracts and insolvency process which are important factors that investors look at prior to incorporating a company. Resolution of contractual disputes has been streamlined due to new rules of civil procedure making disputes less costly and resolved more efficiently. Its insolvency process was improved by implementing rules for the remuneration of liquidators, allowing voluntary liquidations and detailing clawback provisions for suspicious transactions.
For company incorporation in Bahamas and other business setup services, please contact Healy Consultants Group to speak to an in-house expert. Healy Consultants Group have 10+ years in business start-up in this lucrative part of the world and are happy to help you choose and appropriate structure for your business.