Caribbean Review: The Bahamas’ Quest for Tech Stardom
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Forget Singapore, Saudi Arabia, and the UAE—The Bahamas is set to become the world-renowned hub for the technology of tomorrow. This is an aspiration being fiercely pursued by the archipelago nation, keen on expanding its source of GDP from mostly tourism to the digital economy.
The Caribbean, a region heavily reliant on stopovers and cruise ships for much of its revenue, is actively seeking ways to diversify its economies and build sustainable futures, with a strong focus on adopting green technology. As the host of CANTO 2025, the annual business and technology conference for the region, The Bahamas will pitch as a technological leader in the region to attract investment in its digital assets and human capital. However, the island nation will need to deal with many obstacles to establish itself as a reliable and safe partner for the private sector.
Expanding the Bahamian Talent Pool
According to the World Development Report 2023, the Bahamas exhibits high levels of high-skilled emigration to OECD countries like the U.S. and Canada about other Caribbean nations. The report details that 57% of total female migrants represent highly skilled labor flowing out of the nation as well as 58% of male migrants.
Showcasing The Bahamas commitment to such a future is the University of The Bahamas’ FinTech Regulatory Innovation Programme (UBFTRI), where students learn about the various business and regulatory climates for the FinTech industry. The programme is facilitated in partnership with Cambridge Centre for Alternative Finance (CCAF), Cambridge University, and the Securities Commission of The Bahamas in hopes of steering young professionals in the Bahamas into the lucrative digital finance sector. A result that would fulfill the objective of the Bahamas to retain its human capital for its economy instead of losing many young professionals to the higher-paying jobs of the U.S. and Canada.
At CANTO 2024, Prime Minister Philip Davis laid out that education and training in digital skills was, “critical in ensuring people across the Caribbean are not left behind,” as disparities in internet access between countries in the Global North and Global South continue. These aspirations fall in line with the UN Secretary-General’s Digital Compact for the Future which is aimed at unlocking the enormous potential for digital technology in affecting progress and providing internet access to the 2.6 Billion people worldwide who are still offline. For The Bahamas, it is a matter of leveraging its growing technology sector to increase digital literacy and education efforts for a more well-connected populace.
The Future of Digital Assets
To set out the path to becoming a TechHub in the Caribbean and averting the effects of brain drain, Prime Minister Davis’ administration authored “The Future of Digital Assets Policy White Paper” in 2022 for how to succeed in a digital future. The paper presents a comprehensive list of policy objectives and a strategic framework aimed at enhancing The Bahamas' investment climate, retaining its highly educated population, and attracting entrepreneurs and companies to create more high-paying jobs.
With its minimal direct taxes, proximity to the United States, and strong tradition of democratic values, The Bahamas offers prime conditions for investment—opportunities that the U.S. State Department actively encourages American businesses to seize. However, businesses looking to invest in these pioneering sectors must be aware of The Bahamas’ minimal institutional enforcement of FDI regulations and lack of transparent investment procedures.
To foster a welcoming and secure environment for new businesses in the digital sector, the Securities Commission is eager to see the passage of the 2024 Digital Assets and Registered Exchanges Act (DARE), aiming to strengthen regulatory oversight as The Bahamas continues to expand its leadership in digital assets.
However, this legislation still feels behind the curve compared to the global advancements in regulating and monitoring lucrative digital assets. In the context of the 2023 FTX implosion that landed founder Samuel Bankman-Fried in a Manhattan prison for a quarter century on charges of wire and securities fraud, some have questioned The Bahamas’ reputation to maintain a burgeoning yet tempered tech sphere.
The Race for Investment
According to the July 30th, 2024 press release regarding the passage of the DARE Act, The Bahamas is committed to, “continue evolving the regulatory framework, offering enhanced protections for consumers and investors.” While the biggest tech companies like Google, Apple and Amazon may remain on the horizon in terms of locating to The Bahamas, the last decade has seen established firms, startups and consultant companies in the tech industry be attracted to the competitive advantage that the Government and business community in The Bahamas offers.
Companies like CloudCarib, SunIslandPower, and Nassau Guardian have established a promising community of tech companies looking to capitalize on favorable business conditions in The Bahamas before its predicted rise as one of the world’s prominent tech destinations. While companies like these—including FTX in 2021—are drawn to The Bahamas for its lack of income, capital gains, and wealth taxes, the Prime Minister and the public have shown limited enthusiasm for introducing new revenue streams, such as business taxes, to fund the objectives outlined in the Prime Minister’s White Policy Paper.
Education programs, digital literacy, higher education opportunities and access to further resources in order to groom the Bahamian human capital and limit brain drain are all on the Prime Minister’s wishlist in the White Paper but are all initiatives that would require some type of funding. These obstacles should be noted in the context of costly Bahamian efforts to rebuild the nation after the devastating Hurricane Dorian that have largely drained governmental revenues thus pausing the Prime Minister’s other ambitious goals and has redirected his focus into climate financing. The total damages from Hurricane Dorian caused 3.4 billion dollars in damages, while the 2024/2025 approved governmental budget for the Bahamas was 3.54 billion dollars.
Conclusion
While The Bahamas has had some reputational lapses in the tech business community with the dramatic fallout of FTX, initiatives like the Prime Minister’s policy white paper, the University of The Bahamas’ UBFTRI program, a Securities Commission empowered by the new DARE act and an overall positive business-friendly ecosystem, The Bahamas holds many competitive advantages for its goals in the digital sector. Yet, the island archipelago of 400,000, hindered by the onset of costly and deadly hurricanes faces the overwhelming rise of Artificial Intelligence that could further complicate the arduous task of regulation in the tech sector.
