The Bahamas depends on customs duties for much of its annual revenue, and the rules and regulations concerning imports are necessarily complex. Enterprises seeking to trade with the Bahamas would therefore be prudent to retain the services of a reputable customs broker before bringing any material quantities of goods into the islands.
Nevertheless, the Bahamas' foreign trade policy is generally liberal, and the country is in the process of becoming a signatory to the General Agreement on Tariffs and Trade (GATT).
Foreign trade is not regulated by any specific law. There are no quotas on imports, and the only protective duties levied are those on agricultural products in season. In practice, for most imports, only exchange control permission to pay for the goods concerned is necessary. In the case of gaming machines and firearms, however, import licenses must be obtained in advance, and the importation of specified items, such as infected cattle, spoiled meats, and items bearing a design similar to Bahamian currency, is prohibited.
Imports are not restricted by reference to country of origin, nor in normal circumstances is trade with any particular country prohibited.
The harmonized system of tariffs on imports was introduced by the Tariff Act 1996 on 1 July 1996.
The general rate of duty charged on imports is 33%; however, other rates apply (see Table 3). The Bahamas is not a member of any preferential trade agreements that reduce the duty rates. No antidumping legislation has been enacted. Duties must be paid on the entry of individual import consignments and not by periodic settlement with the customs authorities. Exemption from import duties may be granted to various industries, as described at 'Part 2, Incentives and Financing, Investment Incentives'.
TABLE 3 - Import Duty Rules
ITEM RATE(%) General imports 35 Basic foodstuffs -- Agricultural products 20 Clothing 25 Footwear 15 Luxury Items 45-65
EXPORTS
No controls are exercised over exports, and no export taxes are levied. If exported goods are to be re-imported (for instance, in the case of goods sent abroad for repair), an appropriate certificate should be obtained from the customs authorities so that duty will not be levied on their re-importation. On the other hand, goods imported that are destined for re-export may be held in bond on payment of minimal fees.
The Bahamas has trade agreements with various countries under which preferential tariff rates are accorded to Bahamian exports. Under the Caribbean Basin Initiative (CBI), some 4,000 types of products can be imported duty free into the United States, provided that at least 35% of the product's value has been added in the Bahamas at the time of entry into the United States. Provisions and generalized preferences under the Canadian CARIBCAN program are similar to those under the CBI. The Lome IV Convention allows the duty-free importation into the European Union until 28 February 2000 of a wide range of items manufactured in the Bahamas. Certificates of origin that may be required in connection with these preferential agreements are issued by customs offices, embassies, or consular offices.
FREE TRADE ZONES
Under the Hawksbill Creek Act 1955 (revised in 1965), 50,000 acres (about 20,200 hectares) of government land on Grand Bahama were set aside to be developed as an international freeport and industrial complex. Here Freeport was established.
A substantial area within Freeport has been designated a free trade zone. Foreign investors setting up industrial facilities in the Freeport Free Zone have been guaranteed exemption from any form of income, profits, or capital gains taxes, should such taxes ever be imposed, through 2018. Investors are also guaranteed exemption from any emergency taxes, stamp taxes on cash remittances, real property tax, and customs or excise duties on all imports of supplies and materials (excluding consumer items for use within the free trade zone) to be employed in their businesses.
In the Freeport Free Zone, not only is tax and duty-free storage of goods allowed, but also transshipment, manufacturing, processing, and warehousing activities.
Inquiries concerning Freeport should be addressed to:
The Grand Bahama Development Co. Port Authority Building P.O. Box F 2666 Freeport, Bahamas Tel No: +1 (809) 352-6711 Fax No: +1 (809) 352-9864
Under the Free Trade Zone Act 1984, 100 acres (about 40 hectares) on the island of New Providence were designated as a free trade zone. Besides receiving import duty and tax exemptions similar to those applying in the Freeport Free Zone, businesses establishing there are free from permit and license requirements except those relating to work permits.
TRADE AGENTS
There is no specific legislation in the Bahamas regulating the activities of commercial agents. Agency agreements are bound by Bahamian commercial law, which is based on English common law, and the contractual relationship between a principal and an agent is essentially a private one. Matters such as commission rates, exclusive dealerships, rights, and obligations of the parties on the termination of the agency should be dealt with in a written agreement drawn up by Bahamian lawyers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
