NASSAU, BAHAMAS — The Bahamas must be more open to inward investment if it wants to accelerate the pace of its economic recovery, the Economic Recovery Committee Co-Chair suggested yesterday.
Acting Financial Secretary Marlon Johnson, who was addressing the Bahamas Institute of Chartered Accountants (BICA) conference yesterday in his capacity as ERC co-chair, noted that one of the ERC’s recommendations is that the requirement for classification of a Bahamian-owned business be adjusted from 60 percent of Bahamian ownership to 50 percent of Bahamian ownership, to allow Bahamians to have greater opportunities to access international capital and expertise.
“In most jurisdictions that we are familiar with, if you are a fit and proper person, you can go there and open up a legitimate business,” he said.
“In our Bahamas, we have a restricted regime where certain businesses are set aside only for Bahamians.
“Our recommendation is to not move from that to a fully open economy, but to change the threshold so that as long as the business is 50 percent Bahamian owned then it can qualify as a Bahamian business and have access to the full range of sectors.”
According to Johnson, the notion behind the ERC’s common ownership recommendation is that it may be easier for Bahamian business persons to secure a partner at 50/50 than 60/40.
“In the Family Islands, the recommendation is that any business that is 30 percent Bahamian owned would qualify as a Bahamian business,” said Johnson.
“Again, the notion is to do as much as we can to get capital in.
“That’s against the backdrop that we are competing with jurisdictions that have open investment policies.
“If we really want to accelerate the pace of economic recovery we have to get to a [place] where we are open to inward investment, as uncomfortable as we are with that subject and as nationalistic as we tend to be,”
Johnson also noted that for the country to take the “next step” it must address the issue of tax reform.
“We don’t know if income tax or corporate tax is the answer yet. We need to do the foundational study. We need to test some of our assumptions,” said Johnson.