An official website of the United States Government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Bahamas

3. Legal Regime

Transparency of the Regulatory System

The Bahamas’ legal and regulatory systems are transparent and generally consistent with international norms. The Bahamian government is reforming public accounting procedures to conform to international financial reporting standards. In March 2021, the government passed a suite of legislation aimed at improving the country’s fiscal governance by enhancing transparency and accountability. The legislation included the Public Debt Management Bill (2021) that seeks to enshrine proper debt management policies into law and improve transparency concerning central government and SOE debt; the Public Finance Management Bill (2021) that expands budgetary and fiscal reporting requirements for central government and SOEs; the Statistics Bill (2021) that transforms the current Department of Statistics into a quasi-independent National Statistics Institute; and the Public Procurement Bill (2020), that overhauls current arrangements for government contracts to improve transparency and accountability.

Proposed legislation is available at the Government Publications Office and public engagement is encouraged, particularly on controversial legislation. There is no equivalent to the Federal Register, but the government regularly updates its website ( www.bahamas.gov.bs ) to list draft legislation, bills before parliament, and its legislative agenda. Regulatory system reform legislation has not been fully implemented. Public consultation on investment proposals is not required by law. The Embassy is unaware of any informal regulatory processes managed by non-governmental organizations (NGOs) or private sector associations that restrict foreign participation in the economy.

The Fiscal Responsibility Act (FRA) was passed in 2018 to establish broad parameters related to revenue, expenditure, deficits, and public debt. It also calls for an annual Fiscal Strategy Report (FSR) which provides a three-year fiscal forecast that sets targets for the preparation of the government’s annual budgets. The 2020 FSR gave a detailed synopsis of the state of public finances and future plans for revenue, expenditure, debt, and economic growth. The government presents the FSR and makes financial information available during the budget submissions to parliament. The information is also published on the government’s budget website ( www.bahamasbudget.gov.bs ) in simple and non-technical language.

Although efforts have been made to fulfill FRA reporting obligations, The Bahamas’ supreme audit institution, the Office of the Auditor General, has not published a timely audit report of the government’s budget for several years. The last publicly available audit covers fiscal year 2016/2017. Acknowledging the need to meet international standards, the Office of the Auditor General is liaising with the U.S. Global Accountability Office to identify ways to fulfill its reporting obligations.

The government has taken on increasing levels of debt during the COVID-19 pandemic in order to provide social safety nets while stimulating the economy. Some observers consider the debt levels unsustainable and have even speculated about the possibility of default. The Central Bank of The Bahamas denies this speculation and provides quarterly updates on debt obligations on its website ( www.centralbankbahamas.com ).

International Regulatory Considerations

The Bahamas is not a member of the WTO, so does not notify the WTO Committee on Technical Barriers to Trade (TBT) of draft technical regulations. As part of WTO accession negotiations launched in 2018, The Bahamas announced it is reviewing investment policies with the aim of developing comprehensive, WTO-compliant investment legislation. The Bahamas is not a member of UNCTAD’s international network of transparent investment procedures, nor is it a member of a regional economic bloc.

The Bahamas has enacted basic laws governing standards. The Bahamas Bureau of Standards and Quality (BBSQ), launched in 2016, governs standards for goods and services, particularly metrology (weights and balances). BBSQ also cooperates with other ministries on quality standards, such as sanitary and phytosanitary standards with the Ministry of Agriculture and Marine Resources and the Bahamas Health and Food Safety Agency (BAHFSA). BBSQ serves as the country’s focal point on trade barrier issues and is supported by the EU and the Caribbean Regional Organization for Standards and Quality (CROSQ) in the development of national standards. Trade barriers are not a hindrance to trade with the United States and U.S. products are widely accepted.

Legal System and Judicial Independence

The Bahamian legal system is based on English common law and foreign nationals are afforded full rights in Bahamian legal proceedings. Contracts are legally enforced through the courts, however, there are instances where local and foreign investors have civil disputes tied up in the court system for many years. Investors have been defrauded of sums ranging from several hundred thousand to several million dollars, but the court system has lacked the capacity to recover their investments. Throughout 2020, a U.S. investor and a government utility company were engaged in a civil dispute concerning the termination of a contract, non-payment for services provided, and ownership of equipment and materials. This case is ongoing.

The judiciary is independent and allegations of government interference in the judicial process are rare. With the recommendation of the Prime Minister, the Governor General appoints the highest-ranking officials in the judicial system, including the Chief Justice of the Supreme Court, the Attorney General, the Director of Public Prosecutions, and the President of the Court of Appeals. The Bahamas is a member of the Commonwealth of Nations and uses the Privy Council Judicial Committee in London as the final court of appeal and also contributes financially to the operations of the Caribbean Court of Justice. The Bahamas continues to advance efforts to develop its reputation as a center for international arbitration by drafting legislation to govern domestic arbitration and incorporate key provisions of the Model Law of the United Nations Commission on International Trade Law (UNCITRAL). The legislation has not yet been passed.

In 2020, the government announced it continued to leverage alternative dispute resolution (ADR) as a method of resolving disputes without resorting to the court system, including by establishing an ADR unit in mid-August 2020 and developing a two-year strategic plan to promote this method for settling commercial and other types of disputes.

Judgments by British courts and select Commonwealth countries can be registered and enforced in The Bahamas under the Reciprocal Enforcement of Judgments Act. Court judgments from other countries, including those of the United States, must be litigated in local courts and are subject to Bahamian legal requirements. The current government is taking steps to increase judicial transparency and efficiency. Their goal is to modernize the justice system by digitizing court records, streamlining court administration, constructing a new Supreme Court complex, and drafting new rules and legislation to govern court procedures. Progress has been mixed.

Laws and Regulations on Foreign Direct Investment

While some public pronouncements have been made on FDI policies, no major laws, regulations, or judicial decisions have been passed since the 2020 Investment Climate Statement. The government has drafted a Foreign Investment Bill purported to codify the existing National Investment Policy, align with international best practices, and bring additional transparency, accountability, and predictability to the country’s foreign investment process. The Embassy is not aware of efforts to advance this Bill in 2020.

Competition and Anti-Trust Laws

The Utilities Regulation and Competition Authority (URCA) regulates the telecommunications and energy sectors and imposes antitrust restrictions in these sectors. However, there is no legislation governing competition or anti-trust. A Competition (Antitrust) Bill has been drafted in line with The Bahamas’ CARIFORUM-EU obligations and WTO accession requirements, and initial public consultations were held in August 2018. The Embassy is not aware of any efforts to advance this Bill in 2020.

URCA continues to build technical capacity with the support of the U.S. Government.

Expropriation and Compensation

Property rights are protected under Article 27 of the Bahamian constitution, which prohibits the deprivation of property without prompt and adequate compensation. There have been compulsory acquisitions of property for public use, but in all instances, there was satisfactory compensation at fair market value.

The Emergency Power (COVID-19) Regulations, passed in March 2020 to stem COVID-19 infections, grant the government authorization to requisition any building, ship, aircraft, or article if it is reasonably required for any statutory purpose for the duration of the emergency. At the conclusion of the requisition, the government is to make prompt and adequate compensation to the owner. The Regulations are expected to expire upon cancelation of the state of emergency. The Embassy is not aware of any instance in 2020 where the government invoked this law.

Dispute Settlement

ICSID Convention and New York Convention

The Bahamas is a member of both the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) Convention and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (commonly known as the New York Convention). Disputes between companies are generally handled in local courts, but foreign investors can refer cases to ICSID and in at least one instance, recourse was sought in a U.S. court in a dispute involving a $4 billion resort development. The Bahamas’ Arbitration Act of 2009 enacted the New York Convention and provides a legal framework.

Investor-State Dispute Settlement

Order 66 of the Rules of the Bahamian Supreme Court provides rules for arbitration proceedings. The 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards entered into force for The Bahamas on March 20, 2007. This convention provides for the enforcement of agreements for commercial disputes. Under the convention, courts of a contracting state can enforce such an agreement by referring the parties to arbitration. There are no restrictions on foreign investors negotiating arbitration provisions in private agreements.

The Bahamas is a signatory to Economic Partnership Agreements between CARIFORUM and the European Union (2008) and CARIFORUM and the United Kingdom (2019). Both agreements include dispute settlement provisions and procedures. The Bahamas has not yet ratified either of the trade agreements, but provisionally applies both.

Investment disputes in The Bahamas that directly involve the Bahamian government are rare and there is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

The Bahamas is a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA), which insures investors against current transfer restrictions, expropriation, war and civil disturbances, and breach of contract by member countries. Local courts enforce and recognize foreign arbitral awards and foreign investors are provided national treatment. The Embassy is not aware of any cases involving state owned enterprises that resulted in litigation.

Bankruptcy Regulations

Company liquidations, voluntary or involuntary, proceed according to the Companies Act. Liquidations are routinely published in newspapers in accordance with the legislation. Creditors of bankrupt debtors and liquidated companies participate in the distribution of the bankrupt debtor’s or liquidated company’s assets according to statute. U.S. investors should be aware that there is no equivalent to Chapter 11 bankruptcy law provisions to protect assets located in The Bahamas.

The Bahamas ranked 152 out of 190 countries with regards to getting credit in the 2020 Ease of Doing Business report, indicating relatively weak credit reporting systems and the ineffectiveness of collateral and bankruptcy laws in facilitating lending. Recognizing the need for credit reforms, the Credit Reporting Act was passed in February 2018, and the Central Bank confirmed that Italian-based CRIF S.P.A. would launch The Bahamas’ first credit bureau in 2021. Bahamian commercial banks and other lenders will be required to share their clients’ credit history with CRIF and allowed to access credit reports.

5. Protection of Property Rights

Real Property

Despite the high number of second-home owners in The Bahamas, the country’s score for ease of “registering property” in the World Bank’s 2020 Doing Business Report is 181 out of 190 countries. This makes it among the worst in the world. The cost of registering property in The Bahamas increased to 11.8 percent of property value, compared with 5.9 percent for Latin America and The Caribbean, and 4.7 percent for OECD high-income countries. The time to complete the registration process remains high at 122 days, and there has been limited progress in creating digital land registries or establishing time limits for procedures. These facts resulted in a World Bank ranking of 3 for quality of land administration (on a scale of 0 to 30). The Bahamian government does not publish an official number citing the proportion of land without clear title. Unoccupied property cannot revert to other owners, such as squatters. This leads to a high incidence of unoccupied, derelict, and partially constructed residences in The Bahamas, with little evidence of successful government policies to encourage their sale or productive use. Abandoned buildings are also in evidence in commercial districts, such as downtown Nassau.

The various forms of land ownership in The Bahamas have their foundation in English law and can include crown land, commonage land, and generational land. The legal system facilitates the investor’s secured interest in both mobile and immobile property and is recognized and enforced by law. Mortgages in real property and legal rights in personal property are recorded with the Registrar General of The Bahamas.

The Embassy has received reports of problems obtaining clear title to property, either because the seller had no legal right to convey, or because separate claims to ownership arose after a purchase was made.

Intellectual Property Rights

The Bahamian government is taking steps to strengthen Intellectual Property Rights (IPR) in response to pressure from the business community and as part of its protracted WTO accession process. These new regulations cover patents, trademarks, copyrights, integrated circuits, false trade descriptions act, new plant varieties, and geographical indicators. The government anticipates the new regulations will bring The Bahamas into compliance with the terms of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.

The Bahamas is a member of the World Intellectual Property Organization (WIPO) but has not ratified the WIPO Internet treaties. The Bahamas is also signatory to the following intellectual property conventions and agreements:

  • Berne Convention for the Protection of Literary and Artistic Works;
  • Paris Convention for the Protection of Industrial Property;
  • Universal Copyright Convention (UCC);
  • Convention establishing the World Intellectual Property Organization (WIPO);
  • Convention on the means of prohibiting and preventing the illicit import, export, and transfer of ownership of cultural property.

The Bahamas has not recently been listed as a country of concern in the U.S. Trade Representative’s (USTR) Special 301 Report and is not included in USTR’s 2020 Review of Notorious Markets for Counterfeiting and Piracy.

The Bahamas’ intellectual property registry is maintained by the Department of the Registrar General ( https://www.bahamas.gov.bs/rgd ), and enforcement is coordinated by the Royal Bahamas Police Force with support from Bahamas Customs. The Copyright Royalty Tribunal (established under the Copyright Act) is responsible for royalty-related activities, such as collecting and distributing royalties.

The government and the Economic Recovery Commission (ERC) have recognized the need to strengthen the intellectual property regime in The Bahamas. The government announced plans to develop a functional and efficient Intellectual Property/Copyright Legislative Department and accelerate the digitization of intellectual property registration and interconnectivity of government agency systems.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

7. State-Owned Enterprises

State-Owned Enterprises (SOEs) are active in the utilities and services sectors of the Bahamian economy. A list of the 25 SOEs available on www.bahamas.gov.bs  includes key SOEs, such as Bahamasair Holdings Ltd. (the national airline); Public Hospitals Authority; Civil Aviation Authority; Nassau Airport Development Authority; University of The Bahamas; Health Insurance Authority; Bank of The Bahamas; Bahamas Power and Light (BPL); Water and Sewerage Corporation (WSC); Broadcasting Corporation of The Bahamas (ZNS); Nassau Flight Services; and the Hotel Corporation of The Bahamas.

In April 2019, the government announced plans to introduce a State-Owned Enterprises Bill to impose proper corporate governance and address the risk inefficient SOEs pose to its financial health. The Embassy is unaware of efforts to advance this Bill in 2020, though a suite of legislation passed in March 2021 aimed at improving the country’s fiscal governance may also improve the performance and accountability of SOEs.

Within the past decade, no SOE has returned profits or paid dividends, although SOEs account for significant government expenditure, with approximately $408 million budgeted for fiscal year 2020-2021. The latest budget also reveals that on average, nearly 16 percent of the government’s recurrent spending goes to SOE subventions, noting several SOEs required increased funding given the financial stress brought on by the COVID-19 pandemic. However, the government has maintained SOE reforms are integral to its fiscal consolidation plans and announced plans to reduce subsidies by $100 million annually over the next four years. Cost-recovery measures are to begin in mid-2021 for Bahamasair and the Water & Sewerage Cooperation in particular. The savings from SOE reform are expected to assist with meeting additional debt servicing obligations.

The government has permitted foreign investment in sectors where SOEs operate and has approved licenses to private suppliers of electrical and water and sewerage services. These licenses have been issued for private real estate developments or where there is limited government capacity to provide services. An exception is the city of Freeport on the island of Grand Bahama, which has its own licensing authority and maintains monopolies for the provision of electricity, water, and sanitation services.

Privatization Program

The Bahamian government has not taken definitive steps to privatize SOEs but has held up public-private partnerships as the preferred model going forward. The government divested 49 percent of the Bahamas Telecommunication Company in 2011 but issued a second license for cellular services and retained 51 percent equity in the new company. In his February 2018 speech, the then-Deputy Prime Minister announced the government’s intention to divest additional equity in the Bahamian telecommunications sector. In February 2019, the government accepted UK-based Global Ports Holding’s $250 million proposal to redevelop the Nassau Cruise Port, entering a 25-year lease agreement with the company. In early 2019, the company announced a bond offering to raise $130 million for the new port.

8. Responsible Business Conduct

Local and foreign companies operating in The Bahamas have recently become more committed to the tenets of responsible business conduct (RBC). Local and foreign companies have led RBC-related initiatives, including educational programs directed at capacity building for specific industries, the maintenance of public spaces, and financial and technical assistance to charitable organizations.

The government encourages RBC through legislation, but enforcement has been slow. The government has also enacted laws protecting individuals with disabilities from discrimination in the workplace, but again, enforcement is limited. There have been no high-profile or controversial instances of corporate violations of human rights, but civil society remains active in bringing attention to social issues.

Recent steps in support of RBC also include a requirement for local gaming houses to allocate three percent of net profits to community-based social development programs. Several have established foundations that support issues ranging from the environment to education. The Bahamas has strong trade unions, and labor laws prohibit discrimination in employment based on race, creed, sex, marital status, political opinion, age, HIV status, or disability.

The Bahamas is not an adhering government to the OECD Guidelines for Multinational Enterprise.

Additional Resources 

Department of State

Department of Labor

9. Corruption

The government has laws to combat corruption among public officials, but they have been inconsistently applied. The law provides criminal penalties for corruption by public officials, and the government generally implemented the law effectively. However, there was limited enforcement of conflicts of interest related to government contracts and isolated reports of officials engaged in corrupt practices, including by accepting small-scale “bribes of convenience”. The political system is plagued by reports of corruption, including allegations of widespread patronage, the routine directing of contracts to political supporters, and favorable treatment for wealthy or politically connected individuals. In The Bahamas, bribery of a government official is a criminal act carrying a fine of up to $10,000, a prison term of up to four years, or both.

In May 2017, the current government won the election on a platform to end corruption. Early in the administration, the government charged a number of former officials with various crimes including extortion and bribery, theft by reason of employment, and defrauding the government. These cases were either dismissed, ended in acquittals, or are ongoing. The government reported no new cases of corruption in the executive, legislative, and judicial branches during 2020. Nevertheless, three Cabinet Ministers resigned in the first three years of the current administration under allegations of corruption, including the Deputy Prime Minister, the Minister of Financial Services, and the Minister of Youth, Sports and Culture.

The Public Disclosure Act requires senior public officials, including senators and members of Parliament, to declare their assets, income, and liabilities annually. For the 2020 deadlines, the government gave extensions to all who were late to comply. The government did not publish a summary of the individual declarations, and there was no independent verification of the information submitted.

The campaign finance system remains largely unregulated, with few safeguards against quid pro quo donations, creating a vulnerability to corruption and foreign influence. The procurement process also remains susceptible to corruption, as it contains no requirement to engage in open public tenders, although the government routinely did so. In February 2021, the government passed the Public Procurement Bill (2020), which reportedly overhauls current governance arrangements for government contracts to improve transparency and accountability.

According to Transparency International’s 2020 Corruption Perceptions Index, The Bahamas ranked 30 out of 180 countries with a score of 63 out of 100. There are no protections for NGOs involved in investigating corruption. U.S firms have identified corruption as an obstacle to FDI and have reported perceived corruption in government procurement and in the FDI approvals process.

The government does not, as a matter of government policy, encourage or facilitate illicit drug production or distribution, nor is it involved in laundering the proceeds of the sale of illicit drugs.  No charges of drug-related corruption were filed against government officials in 2020.

The Bahamas ratified major international corruption instruments, including the Inter-American Convention against Corruption (signed in 1998, ratified in 2000), and has been a party to the Mechanism for Follow-Up on the Implementation of the Inter-American Convention against Corruption (MESICIC) since 2001. The Bahamas is not party to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Resources to Report Corruption

Contact at government agency or agencies responsible for combating corruption:

Royal Bahamas Police Force
Anti- Corruption Unit
P.O. Box N-458
(242) 322-4444
Email: info@rbpf.bs 

Contacts at “watchdog” organizations:

Citizens for a Better Bahamas
Transparency International (Bahamas Chapter)
(242) 322-4195
Website: www.abetterbahamas.org 
Email: info@abetterbahamas.org 

Organization for Responsible Governance (ORG)
Bay Street Business Center, Bethell Estates
East Bay Street (at Deveaux St.)
Website: www.orgbahamas.com 
Phone: 1-242-828-4459
Email:  info@orgbahamas.com 

10. Political and Security Environment

The Bahamas has no history of politically motivated violence and, barring a few incidents leading up to general elections in 2019, the political process is violence-free and transparent. These incidents were minor and included damage to political party installations, signage, billboards, harassing social media posts and a few reported altercations between opposing party members.

11. Labor Policies and Practices

The Bahamian labor force is considered well-educated by international literacy and numeracy standards. Although a formal Labor Force Survey has not been completed since December 2019 when the unemployment rate was 10.7 percent, government and international agencies estimate the unemployment rate at 25 to 40 percent in 2020 because of the effects of the COVID-19 pandemic. Under normal conditions, wage rates are slightly lower than in the United States but higher than most countries in the region. The minimum wage is $5.25 per hour ($210 per week). There are significant numbers of foreign workers, both documented and undocumented. There are 40,000 registered work permit holders in The Bahamas, and the majority are designated as unskilled or semi-skilled. The majority of this group is comprised of Haitian nationals working in a range of services.

The Bahamian government has granted special permission to resort developments to bring in foreign construction workers. These numbers have ranged from a few hundred at the Pointe Development in Nassau to several thousand during the construction of the Baha Mar mega resort. These concessions were negotiated as part of the Heads of Agreement for specific, large-scale investments, but in most other cases, the employment of foreigners requires applying for individual work permits. Bahamian labor law governs all workers, both foreign and domestic.

The Fair Labor Standards Act (FLSA) 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 working more than 40 hours a week or on public holidays. A 1988 law provides for maternity leave and the right to re-employment after childbirth. The 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 in early 2002. Foreign workers also have the right to social security benefits after five consecutive years of contributions.

Bahamian law grants labor unions the right to free assembly and association and to bargain collectively. The unions and associations exercise these rights extensively, particularly in state-owned industries. The Industrial Relations Act governs the right to strike, 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 and manages overall industrial relations. Although government officials have downplayed perceptions of strained labor relations, industrial unrest has grown throughout 2020 due to longstanding issues and the effects of the pandemic. In 2020, demonstrations were organized by the Bahamas Public Services Union, the Union of Public Officers, the Nurses Union, the Doctors Union, the Consultant Physicians Staff Association, the Bahamas Educators and Managerial Union, Customs, Immigration and Allied Workers Union, the Union of Tertiary Educators, and the Union of Teachers.

In 2016, the government amended legislation to require employers to inform the Minister of Labor in instances where more than ten persons were being laid off. This legislation has been useful to the Bahamian public, as many employers laid off or furloughed workers due to the pandemic throughout 2020.

The Bahamas ratified most International Labor Organization (ILO) Conventions and domestic law recognizes international labor rights. The Bahamian government lacks fiscal and human resources to adequately investigate occupational safety and health issues, but has announced steps to improve this including strengthening the Department of Labor’s Inspection Section to conduct inspections randomly and on request. The country is committed to eliminating the worst forms of child labor, and the Ministry of Labor has periodically inspected grocery stores and other establishments to ensure the enforcement of laws governing child labor.

Investment Climate Statements
Edit Your Custom Report

01 / Select A Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future