Nassau, Bahamas — "Welcome to the Bahamas," reads the large blue-and-white banner atop the Senate Building in Parliament Square. For non-Bahamians with investments in the islands or those contemplating the prospect, there is a certain irony to the greeting.
A bill before Parliament would make it impossible for foreigners to buy or inherit Bahamian property without government approval.
The Act to Regulate the Acquisition of Immovable Property by Foreign Persons is intended to put an end to the speculative land grabs of the past.
But critics, many of them among the leadership of the governing Progress Liberal Party, fear the restrictions will stunt economic growth at a time when the country's moneymaking tourist industry may be headed for another slump.
The proposed legislation would require all property purchases by foreigners and foreign-owned companies to be approved by an investment board headed by Prime Minister Lynden Pindling and including other ministerial appointees.
To enforce the law the government proposes to amend the seven-year-old Constitution so as to allow broad discriminatory powers against non-Bahamians.
The policy of screening real estate purchases by foreigners has been in effect unofficially for more than a year. The full scope of the government's intentions became apparent, however, only when the enabling legislation was introduced.
Besides approval to buy in the first instance, a foreigner or foreign-owned company would also need government consent to retain Bahamanian property acquired through inheritance, court order, mortgage, or other means.
Refusal would mean having to sell the propoerty within three years, unless granted an extension, or paying an annual 10 percent tax on the declared value.
A company would be regarded as foreign-owned even in cases where the non-Bahamian shareholders held only a minority interest.
Wholly Bahamian-owned companies that later acquired foreign shareholders would have two options: apply for a permit and risk refusal or have the foreign shareholders relinquish all company rights and sell their shares to Bahamians within six months.
Foreigners leasing domestic or commercial premises would also be affected by the restrictions.
Under the proposed legislation, house, trade, or business leases could not exceed seven years without permission of the investment board.
For developers of time-sharing projects this could mean as many as 2,500 applications for just one 50-unit building.
Although the bill promises spcial consideration for industrial, banking, or tourist projects, the board would reserve the right at any time to vary the terms and conditions of approval.
If unfilfilled by the date specified, an annual 10 percent tax would be levied on the purchase price of the property or its declared value (whichever is higher) until the requirements were met or the property sold to Bahamian interests.
The business community is gravely concerned about the economic effect of the proposed restrictions, which would also affect Bahamians whose chil dren or spouses may be foreign nationals.