VZCZCXYZ0001
RR RUEHWEB

DE RUEHBH #0116/01 0342137
ZNR UUUUU ZZH
R 032135Z FEB 10
FM AMEMBASSY NASSAU
TO RUEHC/SECSTATE WASHDC 0280
INFO EC CARICOM COLLECTIVE
RUCPDOC/USDOC WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHDG/AMEMBASSY SANTO DOMINGO
RUEHRC/USDA FAS WASHDC

UNCLAS NASSAU 000116 
 
SIPDIS 
STATE FOR EB/IFD/OIA, WHA/CAR, AND WHA/EPSC 
STATE PASS USTR 
STATE PASS TO OPIC AND EXIM BANK 
USDOC FOR ITA/TD/OETCA/BUSBY,  3134/USFCS/IO/WH/MANN, AND 4322/ITA/IEP/WH/OMCB/MBROOKS 
SANTO DOMINGO FOR USFCS 
 
E.O. 12958: N/A 
TAGS: EINV ETRD EFIN ELAB KTDB PGOV OPIC BF EIND ECON EINT
EAGR, EFIS 
SUBJECT: THE BAHAMAS: 2010 INVESTMENT CLIMATE STATEMENT 
 
¶1. (U)  The following is Embassy Nassau's Investment Climate Report 
for 2010. 
 
 
 
 
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Openness to Foreign Investment 
 
 
--------------------------------------------- - 
 
 
 
¶2. (U)  The Government of the Commonwealth of The Bahamas generally 
encourages and offers incentives for foreign investment in all 
sectors of the economy except those the government reserves 
exclusively to Bahamian citizens.  Reserved businesses include: 
wholesale and retail operations; commission agencies engaged in the 
import/export trade; real estate and domestic property management 
agencies; domestic newspaper and magazine publication; domestic 
advertising and public relations firms; nightclubs and restaurants 
(except specialty, gourmet and ethnic restaurants and restaurants 
operating in a hotel, resort complex or tourist attraction); 
security services; domestic distribution and building supplies; 
construction companies (except for special structures for which 
international expertise is required); personal cosmetics/beauty 
establishments; shallow water scale-fish; crustacean, mollusk and 
sponge fishing operations; auto and appliance service operations; 
and public transportation. 
 
 
 
¶3. (U)  Officially, the government has targeted the following 
categories of businesses for foreign investors: tourist resorts; 
upscale condominiums; time share and second home development; 
international business centers; marinas; information and data 
processing services; assembly industries; high-tech service; ship 
registration, repair and other services; light manufacturing for 
export; agro-industries; food processing; mariculture; banking and 
other financial services; captive insurance companies; aircraft 
services; pharmaceutical manufacture; and offshore medical centers. 
Benefits of investing in The Bahamas include:  a stable, democratic 
government; relief from corporate and personal income taxes; timely 
repatriation of profits of approved investments; proximity to the 
United States; extensive air links through nearby Miami, Ft. 
Lauderdale and Orlando; well-developed telecommunications links; a 
good pool of skilled professionals; excellent tourism and 
conference facilities; and current and potential future tariff 
concessions under the Caribbean Basin Economic Recovery Act.  The 
Bahamian dollar is fixed on par with the United States dollar and 
the Government is firmly committed to maintaining this exchange 
rate. 
 
 
 
¶4. (U)  In practice, the vast majority of successful foreign 
investments in The Bahamas have been in the traditional areas of 
tourism and banking.  The decision-making process within the 
Government of Commonwealth of The Bahamas is highly centralized and 
major investments are subject to review and approval at the cabinet 
level.  The government is most interested in investments that will 
generate local employment, particularly in white-collar or skilled 
jobs.  Large-scale projects in areas such as agriculture may be 
difficult to staff since low-wage and low-skill jobs do not appeal 
to most Bahamians, and because the government is reluctant to 
permit importation of foreign laborers to staff these jobs, even on 
a temporary-permit basis.  When new foreign ventures are perceived 
as competitors to existing Bahamian businesses or too dependent on 
foreign labor, the government has responded to local concerns and 
withdrawn or refused the license of the foreign business. 
 
 
 
¶5. (U)  In 1993, the government established The Bahamas Investment 
Authority (BIA).  It is located in the Office of the Prime 
Minister, Ministry of Finance.  BIA is intended to provide a 
 
"one-stop-shop" to assist foreign investors with initial 
governmental approval of their investment applications and to cut 
through further red tape for approved investments.  BIA is the 
government's central point of contact for foreign investment 
questions.  Potential investors may contact the BIA at: 
 
 
 
Bahamas Investment Authority 
 
P.O. Box N-7770 
 
Nassau, Bahamas 
 
Tel: 1-242-356-5956, Fax: 1-242-327-5907 
 
www.investbahamas.org 
 
 
 
While The Bahamas has not yet enacted environmental legislation as 
extensively as that in the United States, the BIA still requires a 
full accounting of the environmental impact of any industrial or 
agricultural schemes. 
 
 
 
-------------------------------------------- 
 
Conversion and Transfer Policies 
 
-------------------------------------------- 
 
 
 
¶6. (U)  Persons and corporations resident in The Bahamas are 
subject to exchange controls administered by the Central Bank. 
Certain commercial banks are authorized to deal in foreign currency 
and have authority delegated by the Central Bank to approve 
exchanges for certain current account transactions.  Non-resident 
investors wishing to initiate operations in The Bahamas must 
register their operations with the Central Bank.  If their projects 
are financed substantially by foreign currency transferred into The 
Bahamas, they will be given "approved status," meaning that profits 
and capital gains can be converted into foreign currency and 
repatriated with minimal formalities.  Capital investment into The 
Bahamas remains subject to exchange controls, but as a practical 
matter these controls have not been known to inhibit repatriation 
of approved investment capital.  Many Bahamians argue that exchange 
controls should be eliminated and the Free National Movement had 
included the elimination of exchange controls in its 2007 campaign 
Manifesto, however to date neither the Central Bank nor the 
government have announced any plan to move forward with it, citing 
the need to retain sufficient foreign reserves to mount a strong 
defense of the currency's one-to-one parity with the U.S. dollar. 
 
 
 
--------------------------------------------- 
 
Expropriation and Compensation 
 
--------------------------------------------- 
 
 
 
¶7. (U)  Article 27 of the Bahamian Constitution prohibits 
deprivation of property except upon the making of prompt and 
adequate compensation in the circumstances.  There is no evidence 
that the government has ever expropriated a business, and both 
major political parties have stated that nationalization will not 
be an instrument of government policy. 
 
 
 
--------------------------- 
 
Dispute Settlement 
 
--------------------------- 
 
 
 
¶8. (U)  There is no history of major investment disputes in The 
Bahamas, although smaller contractual and other disputes between 
Bahamians and foreign investors or exporters are not uncommon.  The 
Bahamian legal system is based on English common law.  The 
judiciary, appointed by the Governor General, is independent and 
there is no evidence of governmental interference with the system. 
The highest court of appeal is the Privy Council in London. 
 
 
 
¶9. (U)  Despite recent efforts to reduce backlogs of criminal and 
civil cases, resolution of court cases can be slow, sometimes 
taking years.  The Embassy has received some reports of encounters 
with biased judges and malfeasance by attorneys.  The Embassy has 
also received reports of local defendants evading payment of 
Bahamian civil judgments or deliberately dragging out court 
disputes, especially in cases involving non-resident plaintiffs. 
 
 
 
¶10. (U)  Judgments of British courts, and of selected commonwealth 
countries, can be registered and enforced.  Other countries' 
judgments, including those of the United States, must be sued upon 
in court as debt, subject to all jurisdictional requirements. 
Judgments of Bahamian courts are payable in Bahamian dollars unless 
otherwise specified by agreement of the parties. 
 
 
 
¶11. (U)  Personal bankruptcy laws are antiquated and rarely used. 
Companies can be and are frequently liquidated according to law. 
Creditors of bankrupt debtors and liquidated companies participate 
in the distribution of the bankrupt debtor's or liquidated 
company's estate according to statute.  The law relating to sales 
of goods and some other commercial subjects are codified in The 
Bahamas' statutes. 
 
 
 
¶12. (U)  The Bahamas has been a member of the International Center 
for the Settlement of Investment Disputes (ICSID) since 1995.  It 
is also a member of the Multilateral Investment Guarantee Agency, 
which insures investors against currency transfer restrictions, 
expropriation, war and civil disturbances, and breach of contract 
by member countries. 
 
 
 
--------------------------------------------- -------- 
 
Performance Requirements/Incentives 
 
--------------------------------------------- -------- 
 
 
 
¶13. (U)   There are no taxes on income, sales, estates or 
inheritances.  The only direct tax is a real property tax.  Casinos 
are specially taxed, and there is a USD 20 departure tax levied at 
the airports and harbors, which will be increased to USD 25 once 
the first phase of the U.S. pre-clearance facility is complete at 
the end 2010, tentatively.  The principal incentives for foreign 
investments are concessions on import duties and property tax 
abatement.  Tariffs in general are high but do not generally 
discriminate by country of origin, although The Bahamas recently 
signed an Economic Partnership Agreement with the European Union 
that aims at the eventual elimination of duty on EU imports over 
the next 25 years.  Incentives are offered under the following 
legislation: 
 
 
 
-- Industries Encouragement Act:  Under this law, the government 
may exempt from duties the machinery, tools, equipment, and raw 
materials imported to construct new factories.  A list of 
 
duty-exempt items is negotiated separately with each new venture. 
 
 
 
--  Hotels Encouragement Act:  Under this law, new hotels and 
resorts can be exempted from real property taxes for ten years from 
the date the new facility opens, and for significant tax reduction 
for up to ten additional years.  An amendment to the Act currently 
before Parliament would allow the government to grant tax relief 
for an additional ten years, raising the maximum length of tax 
abatement to thirty years.  In addition, the Act allows the 
duty-free importation of materials used for the construction of new 
facilities or the substantial renovation of existing facilities 
acquired by new owners for a set period of time.  The list of 
duty-free items for each project and the duration of some duty-free 
windows are negotiated separately for each venture. 
 
 
 
--  Agricultural Manufacturers Act:  This law allows any materials 
necessary for the construction, alteration, or repair of an 
agricultural factory, as well as any machinery or supplies used in 
establishing such a factory, to be imported duty free.  An 
agricultural factory refers to any factory established for the 
purpose of manufacturing or preparing agricultural or horticultural 
produce of The Bahamas for sale or export. 
 
 
 
--  Spirits and Beer Manufacturers Act:  This law provides for the 
duty-free importation of materials used in the construction, 
alteration or repair of approved liquor distilleries or beer 
breweries and the duty-free importation of raw materials and 
equipment for liquor or beer production. 
 
 
 
--  Recent amendments to the Tariff Act provide duty exemptions for 
construction and development on certain outer "Family Islands." 
 
 
 
¶14. (U)  Prospective investors should discuss the terms and 
conditions under which these benefits will be made available in any 
specific case with The Bahamas Investment Authority.  Although work 
permits for key foreign employees are readily granted in connection 
with the investment approval process, government policy favors 
employment of Bahamians.  Fees for work permits can run up to 
several thousand dollars each, and permits for less senior 
employees can be difficult to obtain. 
 
 
 
--------------------------------------------- ------------------ 
 
Right to Private Ownership and Establishment 
 
--------------------------------------------- ------------------- 
 
 
 
¶15. (U)  Subject to the reservation of certain areas of economic 
activity to Bahamian citizens only, and the necessary approvals and 
licenses, private entities may engage in nearly all forms of 
remunerative activity.  They may freely establish, acquire, and 
dispose of interests in business enterprises.  One significant 
exception is the government's monopoly on all forms of 
telecommunications (except Internet services, wireless services, 
paging, and radio) exercised by The Bahamas Telecommunications 
Company (BTC).  However, with the plan to privatize this 
corporation the government is opening the market to competition 
within 2 years of the sale.  To regulate this industry and ensure 
fair competition on the open market the government has commissioned 
a new body, the Utilities Regulation Competition Authority (URCA), 
to regulate the activities of the Communications Industry.  URCA 
has pledged to continue public consultation the policy process. 
The government is actively seeking a buyer and is now offering 
51percent of its stake in BTC and a sale is imminent.  Government 
corporations such as the Hotel Corporation of The Bahamas and ZNS 
 
Radio compete on a basis of rough equality with private 
corporations in similar businesses. 
 
----------------------------------------- 
 
Protection of Property Rights 
 
----------------------------------------- 
 
 
 
¶16. (U)  Subject to long legal delays, secured interest in 
property, both chattel and real, is recognized and enforced. 
Mortgages in real property and security interests in personal 
property can be recorded with the Registrar General. 
 
 
 
¶17. (U)  Protection of Intellectual Property Rights (IPR):   Prior 
to October 2009, The Bahamas maintained a compulsory licensing 
system for television broadcasting that allowed Bahamian cable 
operators to retransmit any copyrighted television programming, 
including for-pay programming, whether or not transmitted from The 
Bahamas or outside of The Bahamas and whether or not encrypted. 
That system provided the legal basis for Cable Bahamas to extract 
and distribute encrypted copyrighted content from the U.S. 
satellite providers without having entered into agreements with the 
content providers.  In September 2009, following consultations with 
U.S. officials and industry representatives, The Bahamas 
implemented a 2004 amendment to the Copyright Act.  The Bahamas had 
not previously allowed the 2004 amendment to enter into force. 
This amendment narrowed the scope of the compulsory licensing 
regime for the reception and transmission of copyright works 
broadcast free over the air.  The amendment took effect on October 
1, 2009. 
 
 
 
¶18. (U)  The Bahamas' legal framework does provide for the 
protection of IPR.  However, enforcement is lax and anecdotal 
evidence suggests that the police are complicit in the buying and 
selling of pirated movies, songs and fabricated high-end purses to 
residents and tourists.  The Bahamian government has taken some 
steps to strengthen IPR protection as part of its World Trade 
Organization (WTO) accession process and in response to requests 
from the United States.  The Bahamas has also participated in 
several IPR protection and enforcement training programs and 
exercises with U.S. Department of Justice and UK officials. 
 
 
 
¶19. (U)  The Bahamas is a member of the World Intellectual Property 
Organization (WIPO), but not of the WTO.  There is little 
industrial production that might generate possible infringements of 
patent rights.  Parliament passed a new copyright law on July 4, 
2000, which is intended to provide better protection to 
international holders of copyrights but has yet to be strictly 
enforced.  The government has recognized the gaps in compliance and 
the Attorney General has submitted a confidential report to begin a 
Plan of Action process to combat this.  Post has received reports 
that new legislation granting greater protections to IPR and more 
stringent penalties for IPR violations will be submitted to 
Parliament for review this year.  This new legislation was designed 
to bring The Bahamas in line with WTO and Economic Partnership 
Agreement (EPA -with the European Union) requirements. 
 
 
 
--------------------------------------------- --------- 
 
Transparency of the Regulatory System 
 
--------------------------------------------- --------- 
 
 
 
¶20. (U)  Official government policy commits The Bahamas to building 
an economic environment where the government assumes its proper 
role as regulator and facilitator of economic development, and 
 
where ideals of transparency, fair play and equality of treatment 
are protected.  Still, the discretionary issuance of business 
licenses can result in a lack of transparency in decisions to 
authorize or to renew the authority of a business.  Large foreign 
investors may be held to higher labor, health and safety standards 
than are local entrepreneurs.  Obtaining required permits, 
especially immigration permits, can take an inordinate length of 
time.  To encourage and maintain foreign and local investment the 
government has pledged to implement new investment policies which 
will simplify the process and reduce ambiguity.  The Bahamas 
Investment Authority exists to assist foreign investors in dealing 
with the permitting process. 
 
 
 
--------------------------------------------- ---------------------- 
-- 
 
Efficient Capital Markets and Portfolio Investment 
 
--------------------------------------------- ---------------------- 
--- 
 
 
 
¶21. (U)  In 2000 the Bahamas International Securities Exchange 
(BISX) began operations, and presently involves the listing and 
trading of domestic equities and also provides a mutual fund 
listing facility.  BISX has experienced several problems during its 
short corporate life, with a shortage of funds and low trading 
volumes since its inception.  The Exchange presently consists of 19 
listed public companies and poor economic conditions have continued 
to negatively impact investor sentiment.  The volume of securities 
traded on BISX in the third quarter of 2009 declined by 5.4 
million.  The corresponding value contracted sharply by USD 44 
million to USD 4.7 million.  In the same period the BISX All Share 
Price Index declined a further 4.9 percent to 1,501.78 points 
extending the 0.7 percent decrease reported in the same period of 
¶2008.  Total market capitalization on BISX fell by 5.8 percent to 
USD 2.4 billion, a reversal from a 1.9 percent advance to USD 2.9 
billion recorded in the previous year. 
 
 
 
¶22. (U)  Despite a number of important initiatives are being 
carried out to accelerate the development of the local capital 
markets, the Exchange has declined due to a suppressed economy. 
The absence of any significant transactions over the review 
quarter, in contrast to a foreign-based firm's purchase of 50 
percent of the outstanding shares of a utility a year earlier has 
significantly impacted the current outlook. 
 
 
 
¶23. (U)  Local bank credit, including loans from The Bahamas 
Development Bank, are available to resident enterprises for capital 
investment in The Bahamas in proportion to their local ownership. 
The current global economic downturn's effect on the banking system 
has been mild, reflecting a relatively sound system.  The prime 
rate and the Central Bank Discount rate have been maintained at 
5.50 and 5.25 percent, respectively.  The majority of outstanding 
commercial bank credit is personal loans (mortgages) for consumer 
purchases.  At the end of September 2009, the Central Bank reported 
the total net external assets contracted by USD 15.5 million to USD 
754.9 million, following a 3.6 per cent decrease a year earlier. 
Domestic banks also showed weakness with credit expansion slowing 
to 1.9 percent (USD 149 million) from 2.3 percent (USD 169 million) 
a year earlier.  With the decrease in credit quality, profitability 
was also negatively impacted, with capital and surplus reserves 
growing marginally by USD 11 million which amounts to 0.6 percent 
compared to the 2.3 percent increase of 2008 at USD 40.7 million. 
The gross economic contribution of the banking sector at the second 
quarter 2009 to the Bahamian economy was USD 86 million. 
Currently, the Bahamas has 160,454.registered IBC's however only 
44,605 of that number are active.  Further, the enactment of the 
new legislation on Private Trust Companies has ushered in the 
approval of two Financial and Corporate Service providers (FCSP's) 
to act as Registered Representatives of Private Trust Companies and 
the exemption of seven Private Trust Companies from having to 
 
obtain a trust license. 
 
 
 
¶24. (U)  Projects in The Bahamas are also eligible, in some 
instances, for financing from the U.S. Export-Import Bank, the 
Overseas Private Investment Corporation (OPIC), or from 
multilateral institutions such as the Inter-American Development 
Bank (IDB).  Major Bahamian banking institutions, which can provide 
financing for certain projects in The Bahamas include: 
 
 
 
   Bahamas Development Bank 
 
P.O. Box N-3034 
 
Nassau, Bahamas 
 
Tel: (242) 352-5780 
 
 
 
Bank of The Bahamas, Ltd. 
 
P.O. Box N-7118 
 
Nassau Bahamas 
 
Tel: (242) 326-2560 
 
 
 
First Caribbean International Bank (merger between Barclays Bank 
and the Canadian Imperial Bank of Commerce (CIBC) 
 
Charlotte House 
 
P.O. Box N-3221 
 
Nassau, Bahamas 
 
Tel: (242) 325-7384 
 
 
 
British-American Bank 
 
P.O. Box N-7502 
 
Nassau, Bahamas 
 
Tel: (242) 327-5170 
 
 
 
Commonwealth Bank 
 
P.O. Box SS-6263 
 
Nassau, Bahamas 
 
Tel.: (242) 328-1854 
 
 
 
Royal Bank of Canada 
 
P.O. Box N-7537 
 
Nassau, Bahamas 
 
Tel: (242) 322-8700 
 
 
 
Bank of Nova Scotia 
 
P.O. Box N-7518 
 
Nassau, Bahamas 
 
Tel: (242) 356-1400 
 
 
 
Finance Corp. Of The Bahamas 
 
P.O. Box N-3038 
 
Nassau, Bahamas 
 
   Tel: (242) 322-4822 
 
 
 
------------------------- 
 
Political Violence 
 
------------------------- 
 
 
 
¶25. (U)  The Bahamas has no history of political violence, although 
labor unrest has become violent on occasion and labor strikes are 
becoming more common.  The government publicly and strongly 
supports a modern open approach to foreign investment, although 
many Bahamians, including some prominent politicians, remain 
suspicious of expatriate investors and employees.  Foreign 
investors are sometimes the targets of criticism in the news media 
and Parliament. 
 
 
 
---------------- 
 
Corruption 
 
---------------- 
 
 
 
¶26. (U)  Giving a bribe to -- or accepting bribes from -- a 
government official is a criminal act in The Bahamas under the 
Prevention of Bribery Act.  Penalty under this act is a fine up to 
USD 10 thousand or a maximum prison term of 4 years or both.  The 
reigning government party, the Free National Movement (FNM), has 
emphasized anti-corruption measures, although reports of heavy 
corruption have plagued the political process for decades. 
 
 
 
--------------------------------------------- -- 
 
Bilateral Investment Agreements 
 
--------------------------------------------- -- 
 
 
 
¶27. (U)  There is no bilateral investment treaty between The 
Bahamas and the United States.  The Bahamas was designated a 
beneficiary of the Caribbean Basin Initiative (CBI) in 1985.  As a 
result, with certain restrictions, products manufactured in The 
Bahamas qualify for duty-free entry into the United States.  High 
wage rates, combined with the small size of the country's 
manufacturing and agricultural sectors, have hindered The Bahamas' 
ability to exploit these benefits.  On January 25, 2002, a previous 
FNM government signed a Tax Information Exchange Agreement (TIEA). 
A key side benefit of this agreement for The Bahamas is that, 
effective 2006, it permits U.S. tax deductions for expenses of 
business conventions held in The Bahamas.  The Bahamas has also 
signed twelve other TIEA's this past year to comply with EPA and 
WTO requirements. 
 
--------------------------------------------- --------------------- 
 
OPIC and Other Investment Insurance Programs 
 
--------------------------------------------- --------------------- 
 
 
 
¶28. (U)  Since 1992, the OPIC has approved two investment projects 
in The Bahamas.  It guaranteed up to USD 10.8 million in loans to 
Uniroyal Chemical Company, Ltd. to assist in the purchase and 
refurbishment of a plant in Freeport.  The Uniroyal plant has since 
closed.  In addition, OPIC committed itself to a loan of up to USD 
1.6 million to Landquest, Ltd., for the development of a cruise 
ship facility on the island of Eleuthera.  The facility is 
currently operational. 
 
 
 
¶29. (U)  The Bahamas is also associated with the Multilateral 
Investment Guarantee Agency of the World Bank, which, like OPIC, 
insures investors against currency transfer restrictions, 
expropriation, war, civil disturbances and breach of contract by 
member countries. 
 
 
 
 
 
-------- 
 
 
Labor 
 
 
-------- 
 
 
 
¶30. (U)  The labor force contracted 4 percent in 2009 to 184,020 
from 191,595 workers in 2008.  Notwithstanding this decrease the 
unemployment rate increased from 8.7 percent in 2008 to 14.2 
percent.  Hence the decrease in the labor force can only be 
attributed to discouraged workers, however this is not represented 
in the current statistics. 
 
 
 
¶31. (U)  Well-qualified accountants and secretaries, and others 
with skills appropriate to the financial services industry, command 
a premium wage.  While low skilled labor, mostly found in the hotel 
 
and restaurants, basic wage hovers around the minimum rate. 
Unemployment is slightly higher for adults between the age of 25 
and 34.  As expected, Nassau - the capital city - has the highest 
employment.  However, Freeport, the second-largest city, has 
experienced escalating unemployment due to two devastating storms 
and the closure of a major resort and casino.  The recent 
re-opening of the Emerald Bay property in Exuma - now owned by 
Sandals - will employ 300 workers on that island.  This all-butler 
style resort will present more direct and indirect employment 
opportunities on that island.  Also, the Bahamas Maritime Affairs 
Chairman, Ian Fair, has suggested that jobs are available in 
maritime.  He based his comments on the fact that The Bahamas has 
earned one of the prestigious and highly sought after sears on the 
40-strong council of the International Maritime Organization (IMO). 
Wage rates, while lower than in the United States, tend to be 
higher than elsewhere in the Caribbean. 
 
 
 
¶32. (U)  There are media and anecdotal reports regarding the level 
of employee and white-collar crime in The Bahamas.  For example, 
newspaper reports have detailed numerous accounts of employees 
stealing from employers.  The Royal Bahamas Police Force (RBDF) has 
issued a number of public service appeals and has advised corporate 
citizens to remain vigilant and hold employees accountable. 
Additionally, tax evasion has plagued revenue collection in the 
Bahamas' Customs Department and the National Insurance Board (NIB). 
In response, the GCOB conducted an investigation into corruption 
 
claims and discovered some senior officers aided business persons 
in dodging payment of correct duties on imported items.  Several of 
the officers were transferred to other government departments while 
nine others are slated to be dismissed.  The GCOB also pursued 
businesses that appeared to have evaded taxes and the National 
Insurance Board charged several employers with evading NIB 
payments. 
 
 
 
¶33.  (U)  In the 2000/2001 Government Budget, the government 
increased its minimum wage from USD 4.12 per hour to USD 4.45 per 
hour for public sector employees.  Minimum wage for private sector 
workers is USD 4 per hour.  The Fair Labor Standards Act requires 
at least one 24-hour rest period per week, paid annual vacations, 
and employer contributions to National Insurance (social security). 
The Act also requires overtime pay (time and a half) for hours in 
excess of 48 or on public holidays.  A 1988 law provides for 
maternity leave and the right to re-employment after childbirth.  A 
new Minimum Labor Standards Act including the Employment Act, 
Health and Safety at Work Act, Industrial Tribunal and Trade 
Disputes Act, and the Trade Union and Labor Relations Act were 
passed in 2001 and early 2002. 
 
 
 
¶34. (U)  The Bahamian Constitution specifically grants labor unions 
the rights of free assembly and association.  These rights are 
exercised extensively, particularly in the hotel industry - where 
80 percent of the employees are unionized - and in the state-owned 
industries.  Unions operate without restrictions or government 
controls.  The right to strike is governed under the Industrial 
Relations Act, which requires a simple majority of union members to 
vote in favor of a strike before it can commence.  The Ministry of 
Labor oversees strike votes.  Although prolonged strikes are still 
rare, work slow-downs and rowdy protests occur and workers often 
use labor actions to force management to act on issues of concern 
to them.  Labor unions and others involved in disputes with 
foreign-owned enterprises have used foreign ownership as leverage 
to gain popular support for their demands. 
 
 
 
¶35. (U)  The Immigration Act requires foreigners to obtain work 
permits before they can be employed in The Bahamas.  The government 
will permit foreign employees to work in a technical, supervisory 
or managerial capacity to initiate and operate industries, provided 
no similarly qualified Bahamians are available for the job. 
Foreign business owners are expected to train as many of their 
Bahamian employees as possible to eventually fill technical and 
managerial positions.  Work permit fees range from USD 350 to USD 
10 thousand per year. 
 
 
 
------------------------------------------- 
 
Foreign Trade Zones/Free Ports 
 
------------------------------------------- 
 
 
 
¶36. (U)  The 1955 Hawksbill Creek Agreement established Freeport, 
Grand Bahama, the country's second-largest town, as a free trade 
zone.  Firms in Freeport are granted the right to import equipment 
and materials duty-free, and enjoy other tax advantages.  In 1993, 
the government extended the Hawksbill Creek property tax exemptions 
to 2015 and duty exemptions to 2054, but withdrew real property tax 
exemptions for foreign individuals and corporations.  The current 
administration plans to extend these exemptions to the entire 
island of Grand Bahama.  The Hong Kong-based conglomerate Hutchison 
Whampoa has invested millions of dollars in a new deep-water 
container port, airport, cruise ship dock, industrial park, and 
hotel properties in Freeport, promising a revitalization of 
Freeport as The Bahamas' leading industrial city.  The benefits of 
this investment have been realized with the Bahamas' ship registry 
surpassing the 50 million tonnage mark, which is the largest in the 
world and the Freeport Container Port is the 72nd busiest container 
 
 
terminal in the world and the 4th busiest hub for its partner 
Mediterranean Shipping Company (MSC).  The Grand Bahama Port 
Authority  (GBPA) continues to be entangled  in an ownership 
dispute as the estate for the late Edward St. George seeks a buyer 
for his 50 percent stake.  Rival and co-owner Sir Jack Hayward 
recently announced plans to sell his 51 percent stake in the 
company to Mid-Atlantic Projects, an American firm.  However, the 
sale has not been finalized, and media reports indicate that St. 
George estate would initiate a liquidation action against the 
Port's parent company to deny controlling interest to the 
prospective buyer.  The instability of the port has done little to 
improve the grim economic outlook for Freeport. 
 
 
 
--------------------------------------------- ---------------------- 
--------------------------- 
 
Foreign Direct Investment Statistics and Major Foreign Investments 
 
--------------------------------------------- ---------------------- 
--------------------------- 
 
 
 
¶37. (U)  There is also a direct link between the level of imports 
flowing into The Bahamas and foreign direct investments.  At the 
end of the third quarter 2009, net private direct investment was 
USD 214.4 million and net private direct equity investments was USD 
171.7 million.  Net Foreign Loans Financing on foreign investments 
was USD 92.7 million.  Net foreign real estate purchases for this 
period totaled USD 42.7 million.  While government statistics do 
not list overall foreign investment by nationality, the Embassy 
believes that the largest investors are American, Canadian, 
Chinese, and South African in origin. 
 
 
 
¶38. (U)  Major foreign investments in The Bahamas include: 
 
 
 
ACCOUNTING 
 
Grant Thornton Chartered Accountants 
 
 
 
Horwath International 
 
 
 
KPMG 
 
 
 
Ernst & Young 
 
 
 
PriceWaterHouseCoopers 
 
 
 
 
 
TOURISM DEVELOPMENTS 
 
Abaco Beach Cottages, resort development, owned by an American 
company. 
 
 
 
Atlantis Resort, a hotel, resort, and casino complex on Paradise 
Island near Nassau owned by Sol Kerzner of the South African firm 
Sun Hotels International 
 
Baha Mar owned by Armenian, Sarkis Izmirlian consisting of the 
Radisson Resort (formerly government owned), Wyndham Nassau Resort 
& Crystal Palace Casino formerly the Nassau Marriott Crystal Palace 
Resort, casino, and convention center, and the Nassau Beach Hotel. 
Izmirlian plans to expand the complex significantly, adding three 
additional hotels, a commercial village and other amenities on the 
scale of nearby mega-resort Atlantis.  The media report that 
Izmirlian will retain ownership of the Baha Mar, however, 
negotiations continue with the project's potential financer, 
Chinese Export Import Bank and the Chinese State Construction 
Corporation.  The Chinese ExIm bank will reportedly hold an 
ownership stake in the project. 
 
 
 
Baker's Bay located on Guana Cay, Abaco is owned by the U.S. 
Discovery Land Company of San Francisco 
 
 
 
Bimini Bay Resort, owned by Florida-based developer Geraldo Capo 
 
 
 
 
Comfort Suites on Paradise Island owned by a U.S. company 
 
 
 
Crooked Island Lodge, a 12 room lodge owned by an American 
developer. 
 
 
 
Four Seasons Resort Development on Exuma, owned by a Canadian 
Company 
 
 
 
Freeport/Lucaya marina village developed recently by European 
investors 
 
 
 
Gorda Cay, renamed Castaway Cay, purchased and developed by Disney 
Corp. for its cruise ship operations 
 
 
 
Half Moon Cay, owned by U.S. company Holland America Cruise Lines 
 
 
 
Island Outpost Resort at Compass Point, Nassau, Pink Sands Resort, 
Harbour Island, and Kamalamae Resort, Andros owned by a Jamaican 
company 
 
 
 
Our Lucaya Resort, a subsidiary of Hutchison Whampoa Group and 
Centex   Rooney 
 
 
 
Princess Cay, a cruise ship landing facility near Eleuthera Island, 
owned by Landquest, a U.S. company 
 
 
 
Professional Golfers Village, the proposed hotel broke ground on 
April 24, 2009, owned by Southworth Developers, a U.S. company. 
 
 
 
Ritz Carlton Rose Island Resort, owned by Florida-based Gencom 
Group 
 
RIU Resort, Paradise Island, owned by a Spanish Company 
 
 
 
Sandals Royal Bahamian Resort, owned by a Jamaican company. 
Sandals now owns the Emerald Bay property in Great Exuma, formerly 
the Four Seasons Emerald Bay, having purchased it from the 
liquidator last year. 
 
 
 
Superclub Breezes Resort, owned by a Jamaican company 
 
 
 
The Bahamas Film Studio/Gold Rock Creek Enterprises Ltd., located 
at East Grand Bahama, owned by Canadian Paul Quigley 
 
 
 
The British Colonial Hilton Hotel a subsidiary of Blackstone and 
managed by Hilton Corp., both U.S. companies 
 
 
 
The Ginn development project located on the west end of Grand 
Bahama, owned by the Florida-based Ginn Development Company 
 
 
 
The I Group Mayaguana development owned by developers from Boston 
 
 
 
Winding Bay Resort, Abaco, owned by a British company 
 
 
 
 
 
CONSTRUCTION 
 
Baker Construction, a subsidiary of a U.S. firm. 
 
 
 
 
 
BANKING & FINANCE 
 
BankBoston Trust Company Ltd., a U.S. bank subsidiary 
 
 
 
BNP Paribas, a French bank subsidiary 
 
 
 
Citibank, N.A., a U.S. bank subsidiary 
 
 
 
JP Morgan Trust Co. (Bahamas) Ltd., a U.S. bank subsidiary 
 
 
 
Templeton Global Advisors Ltd., a U.S. owned company. 
 
 
 
 
 
OTHER 
 
AES American Oil Company, which owns Ocean Cay, a facility to 
produce liquefied natural gas (upon Bahamian government approval) 
 
Cable Bahamas, Ltd., established by a Canadian group 
 
 
 
Commonwealth Brewery Ltd (Heineken), a Dutch-Bahamian company 
 
 
 
Freeport Ship Care Facility, owned by the Lloyd Werft Ship Repair 
Company of Germany 
 
 
 
Morton Salt (Bahamas) Ltd. 
 
 
 
Mirant (Grand Bahama Power Company) 
 
 
 
Polymers International, Ltd., a subsidiary of Dart Container, which 
produces styrofoam pellets at a plant in Freeport 
 
 
 
The Container Port facility, airport and three beachfront hotels in 
Freeport were acquired in 1997 by Hong Kong-based Hutchison Whampoa 
 
 
 
The Caribbean Marine Research Center, operated by The Perry 
Institute for Marine Science, an American firm 
 
 
 
 
 
HOUSING DEVELOPMENTS 
 
Albany Golf and Beach Resort owned by an investment group 
comprising Bahamian Joe Lewis, and AmericanTiger Woods and South 
African Ernie Els 
 
 
 
Chub Development Ltd., Treasure Cay, Abaco, the proposed 
construction of nine townhouses with docking facilities and other 
amenities. 
 
 
 
Cotton Bay, Rock Sound, Eleuthera owned by Eleuthera Properties 
Ltd. 
 
 
 
Old Fort Bay, a housing subdivision, owned by a U.S. company. 
 
 
 
Powell Point at Cape Eleuthera, includes The Island School and 
marina, owned by the parent company for Amway Corporation. 
 
 
 
Roberts Isle, a housing subdivision owned by a U.S. company 
 
 
 
Sandyport Development Co. Ltd., a housing subdivision owned by a 
British company 
 
 
 
Schooner Bay, an environmentally friendly development, owned by a 
U.S. company 
 
Treasure Cove, a housing subdivision, owned by a U.S. company. 
AVANT