The Tribune

The Government was last night urged to clarify whether the new $1 million investment threshold for accelerated permanent residency consideration represented an increase or decrease from the previous benchmark.

Carla Sweeting, the Bahamas Real Estate Association’s (BREA) president, was among those suggesting that the new threshold represented a decrease from the previous one - not an increase, as suggested last week by the Minister of Financial Services.

Hope Strachan told a seminar staged by the Higgs & Johnson law firm last Thursday that the Christie Cabinet had given permission to ‘double’ the threshold from its current $500,000 to $1 million.

She said of the $500,000: “This threshold is no longer achieving the intended objective, which is to attract high net worth individuals to our country and to support the real estate market in a tangible way, while maintaining the integrity and profile of the Bahamas as a premier financial centre.”

However, Ms Sweeting pointed to an April 2011 address in the House of Assembly given by former prime minister, Hubert Ingraham, in which he revealed changes to the Bahamas’ National Investment Policy.

Mr Ingraham said the real estate investment threshold, above which foreign residents could “seek accelerated consideration of permanent resident status” had been increased (tripled) from $500,000 to $1.5 million.

Ms Sweeting said she was unaware of any change to that $1.5 million benchmark prior to Ms Strachan’s announcement last Thursday. If correct, this means the new $1 million threshold represents a decrease - not an increase.

“When did it change?” Ms Sweeting asked of the $1.5 million benchmark set by Mr Ingraham. “If it was back down to $500,000, when did it happen?”

The BREA chief was backed by Bahamian financial services provider Paul Moss, who said he also thought the previous benchmark was $1.5 million.

“Unless I’m in a time warp, I recall that threshold was raised to $1.5 million under the previous administration,” the Dominion Management Services president told Tribune Business.

“If I’m correct, they raised that to $1.5 million for someone wanting to buy real estate or invest. Either I’m missing someone or I’m in a time warp.”

The resulting uncertainty over whether the new $1 million threshold represents an increase or decrease is ‘bad for business’ for the Bahamas, as all investors operate on confidence and predictability.

Any confusion will result in mixed marketing and promotional messages from Bahamian realtors and attorneys to their foreign clients, while the notion of an ‘increase’ could also deter investment.

“In this business environment, where investor confidence is so poor, that might be a good thing,” Ms Sweeting said of the ‘decrease’ to $1 million.

“In good times, you can raise that bar, but not in bad times. That’s my personal opinion.”

The confusion is likely to reignite debate about whether the Bahamas’ National Investment Policy needs to be codified and become law, as the various international trade agreements this nation is entering - or poised to enter - are demanding.

Mr Ingraham, in his 2011 address, acknowledged that the National Investment Policy was something governments “can change when they see fit”.

Putting his finger on the problem, the former prime minister added: “The policies were first articulated and published in a formal way in 1993, as my government sought to bring increased certainty and transparency to our business and investment environment, thereby enhancing the country’s attractiveness to the foreign direct investment required to foster economic growth.

“It would be most appreciated if Honourable Members [MPs] and the public become familiar with the terms of the Investment Policy of the Bahamas. Much misinformation is communicated from time to time about the investment policies of the Bahamas.”