The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A TOP accountant yesterday said client feedback suggested the Commercial Enterprises Act and other reforms will attract new businesses to the Bahamas "in the next 12-18 months".

Prince Rahming, PricewaterhouseCoopers' (PwC) Bahamas territory manager, told Tribune Business that the newly-passed Act and its 'fast track' work permit process for targeted industries was "certainly viewed as a positive step" by the firm's overseas clients.

He added that the legislation, much-criticised by the Government's political Opposition, could become "one of the determining factors behind decisions" on whether to invest in the Bahamas given that it promised a "seamless" turnaround for work permits.

Mr Rahming said the Act and Minnis administration's wider focus on improving the 'ease of doing business', together with improved US and global economic indicators, had improved corporate confidence in the Bahamas.

While acknowledging that the financial services industry "continues to take some pain" as a result of international regulatory changes, the PwC chief said many of its Swiss banks clients had already adapted to the new environment and were "optimistic about the future" again. "Given the level of activity we see within our firm from abroad, and the level of interest being expressed in the Bahamas, we are on the right path overall," Mr Rahming told Tribune Business.

"It's still early days, but in the next 12-18 months we see new entities in the marketplace as a result of measures being taken by the Government. These are [client] relationships we have in the firm, and there's a number of interests being expressed in the Bahamas at this particular time that bodes well and lends to the level of confidence I have."

Mr Rahming said some of these investments would take time to materialise, but he emphasised that "we will see positive moves in the economy" by the medium term.

He indicated that his optimism had not been dimmed by the recent US and global stock market volatility, which has wiped trillions of dollars in value off shares, pointing out that analysts' general consensus is that this is a short-term correction to a rapid run-up in prices.

While investors fear interest rates will rise to dampen inflation and asset prices, Mr Rahming said: "All the fundamentals are there for the market to come back." He added that "what we're seeing in the US should have a positive trickle down effect in the Bahamas".

The PwC Bahamas chief urged the Government to remain focused on what it can control, and keep paying attention to improving the Bahamas' key 'ease of doing business' systems and processes.

"That's going to be key. That's key for the future," Mr Rahming told Tribune Business. "The Commercial Enterprises Act is something we are also advising clients about, and it's certainly viewed as a positive step externally.

"It's all been positive. When we write to advise our clients, we are obviously pointing to that [Act] as a factor in the ease of doing business in the Bahamas. That's viewed positively, and could be viewed as one of the determining factors behind investment decisions when we can pave the way for work permits to be issued in a timely manner and seamless way.

"This thing can only be positive, and the initial feedback from clients overseas is it's viewed as a positive development."

The Commercial Enterprises Act, recently passed into law, was panned by the opposition Progressive Liberal Party (PLP) as a threat to Bahamian jobs on the grounds that it created an 'Open Sesame' for foreign workers to enter this nation by liberalising the granting of work permits.

However, it was subsequently pointed out that the Act only applies to specified targeted industries, and these largely mirror those sectors identified for foreign direct investment (FDI) long ago by the Bahamas Investment Authority (BIA).

The Act applies equally to Bahamian and non-Bahamian investors, and is targeted at industries the Minnis administration views as potential job and growth generators, with the ability to earn foreign currency and diversify the economy.

The sectors targeted are niche financial services offerings, including captive Insurance; nanotechnology; computer technology; software design; data storage; maritime trade; aviation registration; wealth management; and select manufacturing enterprises.

The Commercial Enterprises Act provides a 'fast track' work permit process for companies in these industries that make a minimum $250,000 investment.

If they need to bring in senior executives and management staff, or specialist workers not available in the Bahamas, they can apply to the Commercial Enterprises Board for a certificate enabling them to obtain work permits for a specified number of posts.

If approved, these businesses can bring in expatriate staff without having to first possess a work permit. The application must be made to the Department of Immigration within 30 days of their arrival in the Bahamas and, if no reply is received within 14 days of its submission, the work permit will automatically be assumed as granted.

Despite now being equipped with the Commercial Enterprises Act, Mr Rahming yesterday said the Bahamas "still has a lot of work to be done" on all aspects of improving the 'ease of doing business'.

"We're not out of the woods yet," he told Tribune Business. "But as long as the ease of business remains a key focus for the Government, it bodes well for the wider economy.

"I think we're on the right track for the time being, and as long as the Government continues with being transparent in its decisions I think, again, that also promotes confidence in the jurisdiction."

Mr Rahming also urged the Government to prioritise the crime fight, saying that foreign investors often expressed concerns over this and how it potentially impacts their investment.

"Crime continues to be an overhang," he warned. "When investors come in they often speak of crime and how it impacts their business. It is a focal point, and should continue to be a focal point to reduce or control the level of crime in the country."

The PwC chief said the $4.2 billion Baha Mar project's towards a full opening in April 2018 made him confident about the tourism industry's prospects, while he harboured similar sentiments about the financial services despite the ongoing international pressures it faces.

"With financial services we're continuing to take some pain and have major adjustments at a number of licensees having to change their business model to adapt to the new reality following pressures placed by international organisations like the OECD," Mr Rahming told Tribune Business.

With the Bahamas having signed on to compliance with the OECD's Common Reporting Standard (CRS) for the multilateral automatic exchange of tax information, he argued that while there would be some negative fall-out it did not amount to "ultimate defeat" for the Bahamian financial services industry.

"Companies have adapted and are on a path for future growth," Mr Rahming said. "There may be some consolidation, but they have evolved and adopted a new path and direction that will bode well for the future.

"We do quite a lot of work in both spheres, tourism and financial services offshore, and we work with a number of Swiss private banks here. We have seen them go through the pain and assets departing this jurisdiction, but now they have adapted to new strategies. They're optimistic about the future."