BAHAMAS Law and Practice Contributed by: Judith Whitehead KC, Graham Thompson
The proposal is reviewed by the BIA and, where required, based on internal administrative poli - cies, referred to the National Economic Council for a decision. 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 minis - tries and departments to obtain the relevant approvals to undertake the proposed venture; and • apply for a business licence under the Busi - ness Licence Act. A business licence may be approved within 10 to 12 business days of receipt of an applica - tion with supporting information, though longer timelines are common 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 Regulations, to make the required invest - ment for recognition of the beneficial owners of the enterprise and, in certain instances, be granted Approved Investment Status in relation to their foreign currency investment. The time - frame 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 for - eign investor makes a capital investment within The Bahamas, a major consequence of investing without the requisite approvals is that the inves - tor cannot receive returns on capital.
The Bank, via the Exchange Control Regulations Act and the Exchange Control Regulations, has wide powers 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 currency 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 Landholding Permit or Certificate, where such approval is required pursuant to the International Persons Landholding 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 Regula - tions Act for non-compliance with the Exchange Control Regulations include: • imprisonment for one year upon summary conviction; and/or • a fine ranging from BSD4,000 to a fine not exceeding three times the amount or value of the currency, security, payment, property, etc, in question. Where a foreign investor fails to obtain a busi - ness 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 continues subsequent to the date to which the conviction relates. 2.3 Commitments Required From Foreign Investors Generally, the conditions attached to the approv - al of foreign investors are found within a Heads of Agreement (setting out key terms that form
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