Bahamas Corporate Taxation – Complete Guide

Published on October 2, 2025 and written by Cyril Jarnias

The Bahamas, an idyllic Caribbean archipelago, offers more than just dream beaches and sunny weather. This country has also built a reputation as an attractive tax destination for businesses worldwide. In 2025, the Bahamas continue to draw investors with favorable tax policies and streamlined procedures. Let’s dive into the details of corporate taxation in the Bahamas and discover why this tropical paradise is giving international financial giants a run for their money.

An Enticing Tax System: Taxes That (Almost) Make Entrepreneurs Smile

In the Bahamas, the word “tax” seems almost taboo. Indeed, the country stands out for its particularly light corporate taxation. Unlike many jurisdictions, the Bahamas impose no corporate tax, no income tax, and no capital gains tax. This generous tax policy is one of the country’s main assets for attracting foreign investors.

However, in 2025, a major change was introduced to the Bahamian tax landscape. The government implemented a 15% corporate tax for multinational companies with annual revenue exceeding 750 million euros. This measure, in line with OECD recommendations, aims to combat tax evasion while preserving the Bahamas’ appeal for small and medium-sized enterprises.

For the majority of companies, the tax regime remains extremely favorable. The main taxes businesses may be subject to are:

• Value Added Tax (VAT) of 10%, applicable to most goods and services
• Customs duties on imports, varying by product
• Business license fees, with amounts depending on the type of activity

Registering in the Bahamas: Child’s Play for Savvy Entrepreneurs

One of the Bahamas’ strengths lies in the simplicity of its administrative procedures. Creating and registering a business in this country is a quick and efficient process designed to facilitate the setup for foreign investors.

The first step is to choose a legal structure. The most common forms are:

• The International Business Company (IBC), ideal for offshore activities
• The Limited Liability Company (LLC), offering increased flexibility
• The corporation, for larger-scale projects

Once the structure is chosen, registration is done with the Registrar General’s Department. Required documents typically include:

• Company bylaws
• Information on shareholders and directors
• Proof of payment of registration fees

The registration process can be completed in just a few days, thanks to the efficiency of Bahamian administrative services. Additionally, it’s possible to enlist specialized local agents to facilitate the process and ensure compliance with local regulations.

To register with the tax authorities, businesses must obtain a Tax Identification Number (TIN) from the Department of Inland Revenue. This number is essential for all transactions with tax authorities, particularly for VAT payments and other applicable taxes.

Tax Obligations: The Bare Minimum for Maximum Freedom

Corporate tax obligations in the Bahamas are relatively light, consistent with the country’s attractive tax policy. Nevertheless, it’s crucial to comply with them meticulously to avoid any issues with authorities.

VAT filing and payment constitute the main tax obligation for most businesses. Companies registered for VAT must submit monthly or quarterly returns, depending on their revenue. VAT payment must be made within 21 days following the end of the filing period.

For companies subject to the new 15% tax on multinational corporations, an annual return must be filed, accompanied by payment of the due tax. The specific details of this filing are still being finalized by Bahamian authorities.

Companies must also maintain up-to-date accounting records and keep their financial documents for at least 5 years. Although there’s no requirement to submit annual financial statements to tax authorities, these documents may be requested during an audit.

Businesses operating in certain regulated sectors, such as financial services or gambling, may be subject to additional reporting obligations to the relevant regulatory authorities.

Double Taxation Agreements: The Bahamas Play the International Cooperation Card

Although the Bahamas have long been perceived as an impenetrable tax haven, the country has made considerable efforts in recent years to improve its reputation and international tax cooperation. In 2025, the Bahamas have signed several Double Taxation Agreements (DTAs) and tax information exchange agreements with key countries.

Double taxation agreements aim to prevent businesses and individuals from being taxed twice on the same income in different countries. Although the Bahamas have no income tax, these agreements can benefit Bahamian companies operating internationally or foreign investors in the Bahamas.

Among the countries with which the Bahamas have concluded DTAs are:

• The United Kingdom
• Canada
• China
• Japan
• Several European Union countries

These agreements facilitate trade and investment between the Bahamas and these countries by offering greater legal and tax security to businesses.

Simultaneously, the Bahamas have signed numerous Tax Information Exchange Agreements (TIEAs) with countries worldwide. These agreements allow for the exchange of tax information upon request, thereby strengthening the fight against tax evasion and money laundering.

The Bahamas’ active participation in OECD initiatives on tax transparency, particularly the BEPS (Base Erosion and Profit Shifting) program, demonstrates the country’s commitment to complying with international standards while preserving its tax attractiveness.

The Bahamas vs. Competition: A Tax Haven That Keeps Its Charm

In a world where competition between offshore jurisdictions intensifies, the Bahamas manage to maintain their position as an attractive tax destination. Let’s compare the advantages offered by the Bahamas with those of other jurisdictions renowned for their favorable taxation.

Compared to the Cayman Islands, another Caribbean tax haven, the Bahamas stand out with more developed infrastructure and a more diversified economy. Although both jurisdictions offer no corporate tax, the Bahamas benefit from a better international reputation due to their transparency efforts.

Compared to Singapore, often considered an Asian alternative to traditional tax havens, the Bahamas maintain the advantage of lighter taxation. Indeed, Singapore imposes a corporate tax rate of 17%, compared to 0% in the Bahamas for most businesses. However, Singapore offers a more sophisticated business environment and a strategic position in Asia.

Compared to Ireland, famous for its 12.5% corporate tax rate, the Bahamas remain more attractive from a purely tax perspective. Nevertheless, Ireland benefits from being an EU member, offering easier access to the European single market.

Delaware, in the United States, is often cited as a competitor to the Bahamas for company incorporation. Although Delaware offers great flexibility in corporate law, it cannot compete with the Bahamas’ complete absence of corporate tax.

In summary, the Bahamas maintain their attractiveness thanks to a unique combination of tax benefits, political stability, favorable regulatory framework, and compliance efforts with international standards. The recent introduction of the 15% tax on large multinationals, far from being a handicap, could even strengthen the country’s credibility on the international stage.

Conclusion: The Bahamas, a Strategic Choice for Visionary Entrepreneurs

In 2025, the Bahamas continue to establish themselves as a prime destination for entrepreneurs and investors seeking advantageous taxation. The absence of corporate tax for most businesses, coupled with simplified administrative procedures and a commitment to international standards compliance, makes the Bahamas an offshore jurisdiction that is both attractive and credible.

The recent introduction of a 15% tax on large multinationals, far from being a deterrent, demonstrates the country’s ability to adapt to international tax developments while preserving its advantages for small and medium-sized enterprises. This measure could even strengthen the Bahamas’ position in the long term by improving its reputation and attracting companies concerned about their image.

For visionary entrepreneurs, the Bahamas offer much more than just a tax advantage. It’s the opportunity to benefit from a stable business environment, modern infrastructure, and strategic access to American and Latin American markets. The combination of these factors makes the Bahamas an ideal platform for international business development.

However, it’s crucial to remember that establishing a structure in the Bahamas must be part of a coherent global strategy that respects international regulations. Consultation with international tax and business law experts is highly recommended to fully leverage the benefits offered by this jurisdiction while remaining compliant with legal and tax obligations.