NASSAU, BAHAMAS — U.S. investors are reporting growing difficulty doing business in The Bahamas, with prolonged government approval delays, a lack of transparency and alleged political interference creating uncertainty that could delay or deter foreign direct investment, according to the U.S. Department of State’s latest assessment of the country’s investment climate.
The 2026 Investment Climate Statement for The Bahamas said that while the country remains an attractive destination for U.S. investment and successive governments have generally supported foreign investors and honoured existing agreements, businesses continue to encounter significant obstacles when attempting to get projects approved.
The report identified high labour costs, a bureaucratic investment approval process, inconsistent procurement practices and interference from political leadership among the major challenges confronting investors.
It further noted that U.S. investors have raised “growing concerns” over the ease of doing business, pointing specifically to administrative delays, a lack of process transparency, inconsistent application of regulations and political interference.
“U.S. businesses report increasing difficulty navigating the operating environment, including prolonged delays in approvals and instances where applications remain pending without response,” the report said.
According to the State Department, the U.S. Embassy in Nassau is aware of several prospective investment projects which, despite significant capital commitments and early engagement with the relevant authorities, have faced extended waits for key approvals, particularly environmental and regulatory clearances.
The report highlighted one multi-million-dollar, export-oriented project where investors identified obtaining an environmental permit as the main hurdle preventing the development from moving forward.
It warned that such difficulties “contribute to uncertainty in project execution and may deter or delay foreign direct investment.”
The assessment comes as the government continues to court increased foreign direct investment while seeking to diversify the economy beyond its traditional tourism and financial services pillars.
Tourism and financial services together account for approximately 85 percent of Bahamian GDP, according to the report, while the United States remains this country’s dominant tourism market, accounting for approximately 85 percent of visitors. The Bahamas welcomed more than 12.5 million visitors in 2025, an increase of more than 11 percent over 2024 and the highest level on record.
The State Department identified niche tourism, non-oil and renewable energy, extractive industries and digital technology as emerging investment opportunities, while renewable energy, climate-resilient infrastructure, fintech and digital services are also being targeted.
The government is additionally seeking greater investment in the Family Islands in areas including light manufacturing and technology, agriculture and fisheries, the blue economy and renewable energy.
However, the State Department suggested that weaknesses in the investment approval framework continue to undermine those efforts.
All foreign investors are required to seek approval from the Bahamas Investment Authority (BIA), while projects valued at $10 million or more, those involving national security considerations and developments requiring environmental and economic impact assessments require special approval from the National Economic Council.
The report said the approval process generally involves multiple government agencies before a BIA recommendation reaches the NEC.
It also asserted that the NEC “often factors in domestic political considerations” during its deliberations, including the impact proposed investments could have on existing companies with strong political connections.
Beyond the NEC process, businesses reported bureaucratic difficulties when starting businesses, registering property, acquiring construction permits, accessing credit and resolving property disputes.
The report also raised questions over the status of Bahamas Invest, the independent investment agency previously proposed by the government to fast-track foreign direct investment, streamline approvals and increase transparency.
“There has been no visible progress on this initiative, and it remains unclear whether it remains a government priority,” the State Department said.
According to the report, U.S. businesses and other investors have complained about delayed communication from the BIA, limited feedback on the status of applications and difficulties obtaining timely guidance throughout the approvals process.
It also reported investor complaints of “pressure to hire certain law firms or consultants.”
“These issues contribute to extended project timelines and uncertainty for prospective investors,” the report said.
Despite those concerns, the State Department said The Bahamas continues to hold several advantages as an investment destination, including its low-tax environment, stable currency, geographic proximity to the United States and established investment incentives.
The government provides investors with concessions including customs duty relief on approved raw materials, equipment and building supplies, along with exemptions from real property taxes for periods of up to 20 years. The country also has no personal income, estate or inheritance taxes.
The United States also maintains a substantial trade surplus with The Bahamas estimated at approximately $3.8 billion, while The Bahamas sources between 80 and 90 percent of its food and fuel imports from the United States.
The report, however, also identified transparency and governance as continuing areas of concern.
It said reforms including the Public Procurement Act and eProcurement platform were intended to strengthen transparency and public sector accountability, but maintained that a lack of transparent investment procedures and legislation continues to create difficulties for investors.
The State Department further said progress on several key governance reforms remains limited, pointing to the incomplete implementation of the Freedom of Information Act and outstanding anti-corruption measures.
It said U.S. firms have identified corruption as an obstacle to foreign direct investment and reported perceived corruption in government procurement and the FDI approvals process.
The report nevertheless acknowledged ongoing government efforts to strengthen the investment environment, including procurement reforms and the push toward public-private partnerships.
The government has increasingly favoured PPPs as a means of attracting foreign capital and modernising infrastructure, with major initiatives including airport redevelopment projects.
The State Department said implementation of the roughly $300 million Airport Renaissance Project was actively underway in 2026, with three airports completed and 10 under active construction, while procurement and development continued at remaining locations.
The report also highlighted opportunities in Grand Bahama, renewable energy and infrastructure as The Bahamas seeks to broaden its economic base.
Still, its overall assessment suggested that converting investor interest into completed projects will depend partly on addressing longstanding administrative and transparency concerns.
“Despite efforts to improve transparency and efficiency,” the report said, investors continue to face “a lack of clearly defined investment procedures, delays in resolving legal disputes and incomplete implementation of anti-corruption reforms.”
