Entrepreneurship in The Bahamas
The Bahamas consists of a chain of islands spread over 800 kilometres within the Lucayan Archipelago of the West Indies in the Atlantic. It contains more than seven hundred islands, cays and islets in the Atlantic Ocean, covering 97% of the archipelago’s land area and about 90% of its approximate four hundred thousand population. The Bahamas was inhabited by the Lucayans for many centuries. Christopher Columbus was the first European to make landfall in 1492. The first English settlers arrived on the island in 1648 and it became a British colony in 1718, when the British clamped down on piracy. The Bahamas gained its independence in 1973. Nassau, capital city of The Bahamas, lies on the island of New Providence; the other main inhabited islands are Grand Bahama, Eleuthera, Cat Island, Rum Cay, Long Island, San Salvador Island, Ragged Island, Acklins, Crooked Island, Exuma, Berry Islands, Mayaguana, the Bimini islands, Great Abaco and Great Inagua. The largest island is Andros.
The Bahamas is one of the richest countries in the Americas (following the United States and Canada), with an economy based on tourism and offshore finance. The Bahamian Dollar is pegged to the US Dollar 1 to 1. The Bahamas relies heavily on tourism to generate most of its economic activity, accounting for approximately 50% of the GDP and employs more than half of the country’s workforce.
Banking and offshore international finance services accounts for 15% of the GDP. The Bahamas is a jurisdiction with the most number of offshore entities or companies in the world, as per the Panama papers revelation. With no corporate tax, income tax, capital gains tax or wealth tax, it is largely regarded as a Tax Haven, hence attracting companies to set up a base in The Bahamas.
Agriculture and manufacturing make up for approximately 7% of the GDP. More than 80% of the Bahamian food supply is imported. The government derives its revenue from import tariffs, VAT, License fees, Property and Stamp taxes. The Bahamas is ranked 119 out of 190 countries in the World Banks Ease of Doing Business Index.
Much of the commercial activities in The Bahamas surrounds around something to do with Hospitality & Tourism or Finance. From experiential tour operators to small mom and pop products and service providers to hotels and resorts are an important sector in the system. Banks remain as the go to financial institutions for any loan requirements. Nassau the capital city is a hub for fintech startups. Internet Banking, Mobile Wallets, Crowdfunding, Digital Currency Exchange and Online Trading platforms are some of the areas that have seen startups being launched and operating in.
For most entrepreneurs procuring finance is difficult and is at exorbitant interest rates and charges. Fund flow in terms of setting up offshore companies and investing in them for tax benefits is huge.
The Small Business Development Centre (SBDC) is a tripartite agreement between the Ministry of Finance, University of Bahamas and the Chamber of Commerce and Employers Confederation to facilitate the development of small and medium businesses and promote entrepreneurship in the country.
Going further opportunities are visible in terms of developing agriculture and manufacturing. Introducing technological advances towards servicing the hospitality, tourism, offshore and domestic finance, real estate, and renewable energy sectors look promising.