Offshore operations in The Bahamas are mostly conducted through International Business Corporations (IBCs)—non-financial legally established entities permitted to carry out business outside The Bahamas. These vehicles operate under the IBC Act, 2000. IBCs support employment in financial (banking and trust operations) and corporate service providers, the securities industry, and the legal and accounting professions; and contribute to government revenues through fees for incorporation and annual registrations.
As of end-2007, total public sector debt was about 40 percent of GDP, mostly domestic.
In August, Moody’s affirmed The Bahamas’ A3 bond rating, but revised the outlook from stable to negative.
Expenditure increases included an employment program and pension liabilities assumed by the government following its partial divestment from the telecommunications company.
Total public debt includes all debt from non-financial public corporations (guaranteed and non-guaranteed).
During the construction period, the project operators expect the work force will increase by up to 4,400 persons, and US$750-900 million could be injected into the economy, triggering additional second-round economic activity. Project documents also estimate the complex will attract 400,000 additional stay-over arrivals and generate direct tax revenues of about US$60 million (¾ percent of 2011 GDP) per year.
These initiatives and measures complement those adopted in the previous fiscal year, which included improved tax administration and higher tax rates on vehicles, air departure, and hotel rooms.
Large projects include the development of the Baha Mar resort, expansion of existing resorts, and continuing the construction of the airport and road improvements.
A recent agreement with a low-cost U.S. carrier will increase airlift from states along the East coast of the U.S. to Grand Bahama.
The Bahamas ranked 77 of 183 countries in the Doing Business 2011 Report, down from 68 in 2010. The decline in ranking reflected lower rankings in all categories with the exception of ‘Enforcing Contracts”.
Key variables used in the exchange rate equations include the oil balance, the fiscal balance, net foreign assets, and income growth.
The central bank exercises regulatory and supervisory oversight of banks, trust companies, money transmission businesses and private trust companies.
An update assessment of the Bahamian financial system under the Financial Sector Assessment Program is scheduled in 2012.
The Bahamas Compliance Commission, a part of the jurisdiction’s anti-money laundering efforts, is a supervisory body for groups of professionals (e.g., lawyers, accountants) that hold funds on behalf of clients. It works closely with the Inspector of Financial and Corporate Service Providers, who regulates persons providing corporate management services.