Newly introduced major tax incentives aimed at reviving ‘tired’ Bahamas

New tax incentives are underway in the Bahamas in order to entice potential investors to the Caribbean islands made famous in the James Bond movies.

A series of tax cuts are also designed to help re-generate parts of the archipelago's 700 islands that are perhaps less than attractive these days or suffering from under investment.

Although one of the richest Caribbean countries it is in need of investment. In particular parts of Nassau are suffering from disrepair and urban blight that makes them unattractive to residents, tourists and investors.

Prime Minister Hubert Ingraham has said the city lacks vibrancy and he wants to put some 'class' back into the place. In particular the City of Nassau Revitalization Act is aimed at enticing investors with tax concessions over a five year period. The vision includes upmarket restaurants and quality shopping.

Alexander Alexiou, owner of Nassau-based Lows Realty, which been in the property business since 1967, confirmed there has been a downturn in the capital city. He said businesses are moving out of the downtown area because of a lack of shopper traffic from cruise ships and hotel guests. He said he believes two of the main reasons for this are the poor condition of many properties in the area and a lack of parking spaces.

The tax cuts will exempt all materials imported, purchased or taken out of bond for capital investment purposes for any structure in the city of Nassau from custom and excise duties. Property taxes on investment buildings will also be exempted for up to five years.

Another problem the tax bill may help solve is the short supply of residential property in the city. 'If more people actually lived in the city, then more restaurants and bars will remain open for business for longer hours. This, in turn, would encourage more customer traffic, creating the vibrancy which Ingraham said the city lacks,' said Alexiou.

Some of the outer, or family islands, will also benefit. For those who invest in specified islands, the Family Island Development Encouragement Act will offer duty and excise tax free import on construction materials that will be used to build new structures or to work on existing buildings. The bill will also give similar tax breaks for those who import machinery to be used for farming or construction activities on these islands.

One likely to benefit is San Salvador which has only one large scale development, Club Med Columbus. Most people believe there is room for more. The island already enjoys weekly direct flights from Florida and Paris. 'Hopefully the tax incentives will stimulate some growth in these out islands which are ready, able and willing to grow,' added Alexiou.