Recent changes to exchange control in The Bahamas have affected transaction caps and limits on exchange of foreign currency. Businesses and individuals who use foreign currency should review the changes to make sure they understand today's Bahamian exchange control rules.
Exchange control limits the movement of foreign currency (money) to and from The Bahamas. It helps Bahamian currency maintain its value, controls expansion of the money supply, controls speculation in currency, and helps the government monitor movement of foreign currency. Every few years, the Central Bank of The Bahamas adjusts the exchange control currency limits for various types of transactions. The last adjustment took effect on April 1, 2016.
The most recent adjustment, which took effect on February 1, 2018, affects everything from the amount of foreign currency Bahamian individuals can hold in their bank accounts, to the exchange rate for funding investments in US dollars. Individuals may now purchase up to $15,000 in foreign currency for travel, an increase of $5,000. Businesses may now import goods and services with a $1 million value, up from $500,000.
Before the new changes, Bahamians could not hold foreign currency as an asset outside The Bahamas at all unless they had permission from the Central Bank. Now, Bahamians can hold foreign currency outside The Bahamas without penalty, or they can hold the foreign currency in Bahamian bank accounts. Similarly, residents used to need annual approvals from the Central Bank to maintain their foreign currency accounts. Now they only need approval for the initial account opening.
One of the most significant changes for businesses involves their ability to hold foreign currency accounts. Previously, only certain Bahamian resident businesses with high revenues from foreign currency could hold bank accounts containing foreign currency for carrying out business transactions and paying foreign debts. These businesses had to get Central Bank approval to do so. After the adjustments, any resident business can open a foreign currency account and keep foreign currency in it, without Central Bank approval. However, the Central Bank still has to approve accounts holding more than $100,000 in foreign currency.
The Bahamian government forecasts that the exchange control changes will “assist small and medium-sized Bahamian businesses and Bahamian investors by improving the ease of doing business for Bahamians and residents.”
To find out more about exchange control in The Bahamas, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.