Restoring commerce is vital to the islands of Abaco and Grand Bahama and to facilitate the social and economic recovery of those islands affected by Hurricane Dorian, the government identified them as special economic recovery zones.

“I am pleased to announce that East Grand Bahama, Abaco, and the Abaco Cays will be designated as special economic recovery zones for an initial period of three years,” Prime Minister Dr. Hubert Minnis said during a press conference yesterday at the Office of the Prime Minister. 

“This designation, modeled after what is already in place for the Over-the-Hill initiative, will enable the communities impacted by Hurricane Dorian to benefit from a broad range of tax breaks and incentives.

“They will also benefit from other means of support that will restore the various economies, and indeed, over time, make these economies more vibrant.”

According to the prime minister, the special economic recovery zones will benefit from a number of incentives which includes the duty free purchase of all materials, fixtures, furniture, vehicles and equipment for all business needs and for all business and residential construction or rehabilitation efforts.

“For the duty free purchases of commercial items and construction materials, we are taking steps to ensure that Bahamian wholesalers and distributors benefit from these provisions so that those who want to access the concessions will be able to buy locally,” the prime minister added.  

“Accordingly, for East Grand Bahama, and for the Abacos, we will extend the ‘bonded’ items facility that is a feature of the Port Authority Area of Grand Bahama. 

“Thus, a resident of Abaco or East Grand Bahama who is setting up his or her business or undertaking their construction project will be able to buy their items on the island at the duty free prices.  

“Those with approved projects in the special zones will also be able to buy their goods in New Providence and elsewhere – through participating vendors – and be able to obtain duty free prices.”

Business license fees for businesses operating in the special economic recovery zones will be waived.

Dr. Minnis added that there will also be a “waiver on real property tax payable on all eligible properties that are reconstructed, restored or otherwise are inhabitable by October 2020.”

In addition, “a VAT credit of up to 50 percent on the sale of real property, provided that such sale will be immediately followed by material construction, on or enhancements to the property, or the utilization of the purchased property to material commercial activity,” will be a part of the special recovery zone benefits, according to Dr. Minnis.    

“To maintain the credit, the qualifying activity must commence within 75 days of the close of the sale and must be followed through to scheduled completion.  Otherwise the full VAT becomes payable,” he said. 

As part of the special economic recovery zone, the government will also establish a $10 million loan guarantee and equity financing program.

The prime minister said the program will allow qualifying Bahamian small and medium size businesses to secure up to $500,000 in financing under the program to fund the restoration of businesses or the creation of new businesses.

“Through the Small Business Development Centre, the Bahamas Venture Capital Fund, the Bahamas Development Bank and our commercial banking sector, the government will provide up to $10 million,” he explained.

“This $10 million in funds will facilitate grants, loan guarantees, and equity capital, particularly geared at those entrepreneurs and business segments that would not normally qualify for regular bank credit.” 

Dr. Minnis also pointed out that the Provisional Business License Program will be extended for all businesses with limited exceptions within the zones to allow qualifying businesses to get started within two business days of a completed application.

A business assistance One Stop Shop will also be established in Grand Bahama and Abaco.

Dr. Minnis explained that the One Stop Shop will house representatives of the Small Business Development Centre (SBDC), the Bahamas Investment Authority, the Ministry of Finance, the Bahamas Investment Authority, the Department of Inland Revenue, the Department of Environmental Health and building permits units of the various agencies.   

“This one stop shop will be equipped and empowered to ensure that all existing and new businesses will be able to work through any regulatory requirements within five working days,” he added.

“The provisions under the special economic recovery zone are intended to encourage and facilitate the rapid restoration of commerce in the affected areas so as to fulfill the government’s core objective of ensuring that Grand Bahamians and Abaconians can restart their lives on their own home islands.   

“Those who have been displaced will be able to move back with the employment and entrepreneurial opportunities that will allow them to maintain themselves once they return home.

“Our policy is to create the environment that will restore these islands as quickly as humanly possible, so that those who are there can remain and those who have left can return.”