Exchange control in The Bahamas affects all foreign currency transactions between Bahamian residents and residents of foreign countries. It is a series of rules that restrict the movement of foreign currency to and from The Bahamas. Companies doing business in or with The Bahamas should be aware of how exchange control will affect their ability to complete transactions.
The Bahamas uses exchange control to“preserve the country's external reserves and safeguard the balance of payments; maintain the fixed rate parity of the Bahamian Dollar with the United States Dollar; control expansion in the money supply, as well as speculation in the Bahamian currency by non- residents; and provide a statistical means of monitoring the inflows and outflows of foreign currency to/from The Bahamas.” Exchange control has historical roots, but most businesses care more about the practical implications of transactions with foreign currency.
For purposes of exchange control, all Bahamian companies (except international business companies) in which non-Bahamians hold an interest must be designated as resident or non-resident. Designation depends on where the company operates. All trusts, firms, organizations, and people also must be designated as resident or non-resident.
Banks that are considered “authorized dealers” may conduct foreign currency transactions with Bahamian residents. Banks that are considered “authorized agents” may hold residents' foreign securities and conduct some securities transactions for non-resident companies that the banks manage. Certain banks or the Central Bank must approve all investments by non-Bahamians. The movements of currency that result from these transactions must be recorded.
Many foreign currency exchange transactions cannot be completed by authorized dealers or authorized agents. These transactions include loans, dividends, issue and transfer of shares, purchase of real estate in another country, purchase of shares in a foreign business entity, holding foreign currency accounts, and more. The Central Bank processes these transactions either by exchanging written communications with the requester or at the Exchange Control Counter in person.
To find out more about exchange control, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.