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Exchange Control Liberalisation

In February 2018 further liberalisation of the exchange control regime of The Bahamas went into effect.  The liberalisation relate to both current account transactions and certain capital controls.

The Central Bank stated that the trade related measures are intended to further reduce the need for direct Central Bank approvals for international business payments, and the capital account measures target a prudent balance, while promoting more economic dynamism through sustainable and stable financial flows.  The financial and investment transactions reforms mostly affect transactions undertaken by Bahamians or Bahamian owned businesses.  

Below follows a summary of the recent changes.

  1. ADJUSTMENTS TO PRESENTLY DELEGATED CURRENT ACCOUNT ITEMS

Transaction

Previous Limit

Revised Limit
(effective 01 Feb 18)

1

Personal Travel $10,000 per trip $15,000 per trip

2

Business Travel $10,000 per trip $15,000 per trip

3

 

Sundry Expenses
(excluding medical expenses, payments to educational institutions[1], students and miscellaneous payments)
$25,000 per transaction Amount on bill

4

Sundry Expenses
(payments to students)
$5,000 per transaction $15,000 per transaction

5

Sundry Expenses
(miscellaneous payments eg visas)
$2,500 per transaction $15,000 per transaction

6

Gifts
(payable to non-resident individuals, church or charitable organizations)
$5,000 per transaction $15,000 per transaction

7

Non-oil Imports (CIF)
(payment made directly to supplier)
Up to $500,000 Up to $1 million

8

Commercial Letters of Credit Up to $500,000 Up to $1 million

9

 

Non-oil Imports (CIF)
(payment made directly to individuals)
$5,000 per transaction Up to $1 million

Transaction

 Previous Limit

Revised Limit
(effective 01 Feb 18)

10

Oil Imports (CIF)
(by 100% Bahamian owned-companies or Bahamian individuals)
$25,000 per transaction Up to $1 million per transaction

11

Corporate Credit Card
(for companies designated or deemed resident for Exchange Control purposes)
Credit limit up to B$25,000 Up to credit limit approved by Authorized Dealer
  1. AMENDMENTS TO CAPITAL ACCOUNT TRANSACTIONS

Transaction

 Previous Arrangements

Revised Arrangements
(effective 01 Feb 18)

1

Investment Currency Market (the “ICM”)
  • Buying/bid rate: B$1.125 = US$1.00 & Selling/offer rate: B$1.100 = US1.00
  • No delegated authority to Commercial Banks
  • Each trade in assets funded with investment currency requires prior approval from the CBB
  • Buying/bid rate: B$1.050 = US$1.00 & Selling/offer rate: B$1.025 = US1.00
  • At a date to be fixed in 2018, all investment currency transactions will be delegated to commercial banks
  • Subject to CBB approval, residents may fund and maintain foreign currency trading portfolios of securities with Authorised Agents. Individual trades within a portfolio will not require Central Bank approval.

2

Holding of Foreign Currency Deposits and Investment Assets by Residents
  • Subject to CBB approval, only resident businesses earning significant revenues in foreign currency deposit accounts permitted to hold foreign currency accounts to fund current account transactions and to service foreign currency debt.
  • Residents not permitted to fund and maintain foreign currency assets outside The Bahamas, without approval from the CBB and via the ICM.
  • Residents allowed to invest up to $25,000 per family unit, once every 10 years at the official rate to purchase timeshare units abroad.
  • Residents permitted to purchase of residential property outside The Bahamas, subject to meeting certain criteria, CBB approval and via the ICM.

  • Without prior CBB approval, resident businesses may open and maintain foreign currency accounts with local banks for operating transactions earned in foreign currency, with account balances of up to $100,000 in the aggregate.
  • Subject to CBB approval, residents may maintain existing foreign currency assets, without penalty, with the right to repatriate the assets or to maintain the holdings outside The Bahamas. Deposits and other assets repatriated to The Bahamas may be retained in foreign currency.
  • Subject to CBB approval, residential or time share purchases may be made at the official rate, up to a limit of $ 0.5 million. Payments in excess of this amount will require use of the ICM.

3

Signatories on Deposit Accounts CBB approval required for resident signatories on foreign currency accounts CBB approval no longer required. (Note: CBB approval is still however required for the establishment of such accounts by Resident entities.)

4

Renewal of Authorization to Maintain Deposit Facility Resident entities must request annual approvals to open and maintain operating foreign currency accounts. Only CBB approval to establish the foreign currency account is required, thereafter, the account can continue to be operated for as long as the account holder continues to operate in The Bahamas and annual approval is not required.

5

Bahamian Dollar mortgage loans to Temporary Residents Residing and working in The Bahamas for at least 3 years for owner-occupied property for up to $250,000 up to $1 million

A copy of the Central Bank’s press release can be found at: http://centralbankbahamas.com/publications.php?cmd=view&id=16813

For more information please contact: info@delaneypartners.com .


[1] Note there have been no changes to payment limits relating to payments for medical expenses or educational institutions. The limit remains ‘amount on bill’.

© Delaney Partners, March 2018

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