BAHAMAS Law and Practice Contributed by: Judith Whitehead KC, Michaela Sumner-Budhi, Sean McWeeney Jr., Charisma Romer-Cartwright and Hubert Edwards, GrahamThompson
2.2 Procedure to Obtain Approval and Sanctions for Non-Compliance Steps to Obtain Approval A foreign investor interested in undertaking a sig - nificant development project or commercial enter - prise would, as a first step be required to obtain BIA approval to invest in a business within The Bahamas. Such application must be supported, in addition to routine due diligence materials on the applicant, by a detailed investment proposal to the BIA. The proposal should include explicit details regarding the nature of the investment, the island on which the investment/ business would take place, due diligence and finan - cial details regarding the beneficial owners, employ - ment projections for Bahamians and non-Bahamians, whether work permits or any concessions under the relevant legislation are required, and whether the investment will include the acquisition of land. The proposal is reviewed by the BIA and, where required, based on internal administrative policies, referred to the National Economic Council for a deci - sion. This process may take between one and six months, depending on the nature and complexity of the investment. Following approval from the BIA, the investor will be directed to: • comply with any other relevant legislation; • make applications to the relevant ministries and departments to obtain the relevant approvals to undertake the proposed venture; and • apply for a business licence under the Business Licence Act. A business licence may be approved within 10 to 12 business days of receipt of an application with sup - porting information, though longer timelines are com - mon for more complicated applications. In addition to BIA approval, the investor must obtain the approval of the Central Bank of The Bahamas (the “Bank”), pursuant to the Exchange Control Regula - tions, to make the required investment for recogni - tion of the beneficial owners of the enterprise and, in certain instances, be granted Approved Investment Status in relation to their foreign currency investment.
The timeframe for this process is between two and eight weeks. Consequences of Investing Without Approval In as much as the prior approval of the BIA and the Bank are respectively required before a foreign inves - tor makes a capital investment within The Bahamas, a major consequence of investing without the requisite approvals is that the investor cannot receive returns on capital. The Bank, via the Exchange Control Regulations Act and the Exchange Control Regulations, has wide pow - ers to make orders to prevent capital transactions involving the movement of funds to and from The Bahamas. The Bank also regulates and may restrict the conversion of Bahamian dollars to a foreign cur - rency to make capital returns to non-Bahamians, where the underlying transaction/investment did not receive required approvals. A failure to obtain from the Investments Board a Land - holding Permit or Certificate, where such approval is required pursuant to the International Persons Land - holding Act, may also result in the relevant transfer instrument or deed being null and void for all purposes of law. Sanctions Sanctions under the Exchange Control Regulations Act for non-compliance with the Exchange Control Regulations include: • imprisonment for one year upon summary convic - tion; and/or • a fine ranging from BSD4,000 to a fine not exceed - ing three times the amount or value of the currency, security, payment, property, etc, in question. Where a foreign investor fails to obtain a business licence under the Business Licence Act, they may be liable upon summary conviction to a fine of BSD5,000 and a sum of BSD100 for each day the offence con - tinues subsequent to the date to which the conviction relates.
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