Foreign Ownership Regulations in The Bahamas

Published on October 2, 2025 and written by Cyril Jarnias

Here is the requested article on foreign ownership regulations in the Bahamas:

The Bahamas, a paradise archipelago located in the Atlantic Ocean, has long attracted foreign investors due to its favorable tax climate and business-friendly regulatory framework. This article explores in detail the rules governing foreign ownership in this country, providing a valuable guide for international entrepreneurs and investors looking to expand their operations there.

A Paradise for Foreign Investors

The Bahamas has established a particularly welcoming environment for foreign capital. The country practices no discrimination between local and foreign investors, offering the latter the same rights and opportunities. This liberal approach translates into the absence of major restrictions on foreign ownership in most economic sectors.

Foreign investors can hold up to 100% of the capital of a Bahamian company in almost all business areas. This open policy aims to stimulate foreign direct investment and promote the country’s economic development. The Bahamas actively seeks to attract international capital, considered an essential driver of growth and job creation.

Nevertheless, specific regulations apply in sectors considered strategic or sensitive. It is important for any potential investor to fully understand these rules before embarking on a project in the Bahamas.

Regulated Sectors: Navigating Bahamian Waters

Although generally open, the Bahamian investment regime includes some restrictions in certain key areas:

Real Estate: An Accessible but Regulated Market

The real estate sector in the Bahamas is largely open to foreigners, but with some nuances:

• Non-residents can freely purchase residential or commercial properties.
• For land purchases exceeding 2 acres (approximately 0.8 hectares), approval from the Investments Board is required.
• Real estate transactions involving foreigners must be registered with the Central Bank of the Bahamas.

These measures aim to maintain some control over large land acquisitions while allowing foreign investors to actively participate in the local real estate market.

Banking and Financial Sector: Enhanced Regulation

The financial sector, a pillar of the Bahamian economy, is subject to increased oversight:

• Foreign banks and financial institutions must obtain a license from the Central Bank of the Bahamas to operate in the country.
• Strict requirements regarding capital, governance, and compliance apply.
• Bahamian authorities have strengthened their anti-money laundering and counter-terrorism financing regulations in recent years.

These measures aim to preserve the integrity of the Bahamian financial system while maintaining its international appeal.

Fishing and Agriculture: Protecting Local Resources

These traditional sectors are subject to greater restrictions:

• Commercial fishing is reserved for Bahamian citizens.
• Foreign investments in agriculture are subject to government approval and generally limited to large-scale or innovative projects.

These limitations aim to protect local small producers and ensure sustainable management of the country’s natural resources.

Approval Process: Navigating Administrative Waters

For foreign investors looking to establish themselves in the Bahamas, understanding the approval process is crucial. Although generally straightforward, some projects require official validation.

The Investments Board: Guardian of the Bahamian Economy

The Bahamas Investment Authority (BIA) plays a central role in evaluating and approving foreign investment projects:

• All investment projects exceeding 10 million Bahamian dollars (approximately 10 million US dollars) must be submitted to the BIA for approval.
• Investments in regulated or sensitive sectors, regardless of size, also require the BIA’s endorsement.
• The evaluation process considers the economic, environmental, and social impact of the proposed project.

The BIA aims to facilitate investments while ensuring they align with the country’s development objectives.

Approval Procedure: A Multi-Step Journey

The approval process for foreign investments generally follows these steps:

• Submission of a detailed proposal to the BIA, including a business plan, financial projections, and an impact study.
• Initial review by the BIA and consultation with relevant ministries.
• Presentation of the project to the National Economic Council if necessary.
• Final decision communicated to the investor, typically within 4 to 6 weeks.

Bahamian authorities strive to maintain a transparent and efficient process to attract quality investments.

Priority Sectors: The Fast Track

The Bahamian government has identified several priority sectors benefiting from expedited treatment:

• Tourism and luxury hospitality
• Information and communication technologies
• Renewable energy
• High-value-added manufacturing industries

Projects in these areas may benefit from a faster approval process and additional tax incentives.

Rights and Obligations: The Legal Framework for Foreign Investors

Once established in the Bahamas, foreign investors benefit from a stable and favorable legal framework but must also comply with certain obligations.

Investment Protection: A Secure Environment

The Bahamas offers strong guarantees to foreign investors:

• Protection against expropriation without fair and equitable compensation.
• Freedom to repatriate profits and invested capital.
• Access to local and international courts for dispute resolution.

The country has signed several bilateral investment treaties and investment protection agreements, strengthening legal security for international investors.

Tax Obligations: An Attractive but Evolving Regime

The Bahamian tax regime is known for its leniency, but investors must remain vigilant:

• No income tax, corporate tax, capital gains tax, or inheritance tax.
• A 12% value-added tax (VAT) applies to most goods and services.
• Stamp duties and registration taxes are levied on certain transactions.

It is important to note that the international tax landscape is evolving rapidly. The Bahamas is gradually adapting to international standards on tax transparency.

Compliance and Reporting: Increasing Requirements

Foreign investors must comply with increasingly strict reporting obligations:

• Annual declaration of beneficial owners for companies registered in the Bahamas.
• Compliance with anti-money laundering and counter-terrorism financing standards.
• Obligation to maintain detailed accounting records and retain them for at least 5 years.

These measures aim to maintain the Bahamas’ reputation as a responsible financial jurisdiction.

Expert Advice: Maximizing Your Investment in the Bahamas

Drawing on my experience in establishing companies abroad, I share some essential tips for successfully setting up in the Bahamas:

Choosing the Right Legal Structure

The Bahamas offers several types of corporate structures suitable for foreign investors:

• International Business Company (IBC): Ideal for offshore activities and benefiting from tax advantages.
• Limited Liability Company (LLC): Flexible and offering enhanced protection to owners.
• Exempted Limited Partnership: Suitable for investment funds.

The choice of structure will depend on your objectives, the nature of your activity, and your overall tax strategy.

Surrounding Yourself with Local Experts

The success of your project in the Bahamas depends on a good understanding of the local environment:

• Engage a Bahamian lawyer to navigate the subtleties of local law.
• Hire an accountant familiar with the country’s tax and reporting requirements.
• Establish relationships with local banks to facilitate your financial operations.

These professionals will help you avoid common pitfalls and optimize your structure.

Staying Informed of Regulatory Developments

The regulatory environment in the Bahamas, like in many offshore jurisdictions, is evolving rapidly:

• Closely monitor legislative changes, particularly in taxation and compliance.
• Anticipate new reporting and transparency requirements.
• Adapt your strategy accordingly to remain compliant while optimizing your benefits.

Regular monitoring will allow you to maintain your competitiveness while avoiding regulatory risks.

Conclusion: The Bahamas, a Promising Investment Destination

The Bahamas offers an attractive environment for foreign investors, combining a favorable tax regime, business-friendly regulations, and political stability. Although some sectors remain subject to restrictions, the majority of economic areas are open to international capital.

The key to success lies in a thorough understanding of the local regulatory framework and constant adaptation to the evolving international landscape. Savvy investors will know how to leverage the opportunities offered by this Caribbean paradise while skillfully navigating its regulatory waters.

With adequate preparation and expert support, the Bahamas can become a strategic pillar of your international development, offering a springboard to new business horizons.