The Bahamas
& Nassau

The Bahamas is an independent nation of 700 islands and 2,400 cays scattered across 260,000 square kilometres of the Atlantic Ocean, beginning just 80 kilometres off the coast of Florida. The capital, Nassau, sits on New Providence Island and is home to roughly two-thirds of the country's 400,000 inhabitants. The country is a member of the British Commonwealth, uses the Bahamian dollar (pegged 1:1 to the US dollar), and operates under English common law — a legal framework that is familiar and reliable for international investors and residents.

The Bahamas has been a zero-tax jurisdiction for decades. There is no personal income tax, no capital gains tax, no inheritance tax, no wealth tax, no corporate income tax, and no VAT on most goods. The government funds itself primarily through import duties, stamp duty on real estate transactions, and tourism revenue. For high-net-worth individuals, entrepreneurs, and investors seeking a legitimate zero-tax base with proximity to the United States, the Bahamas is one of the most straightforward options available.

The country is politically stable, English-speaking, and well-connected. Nassau has direct flights to New York, Miami, London, and Toronto. The legal and financial infrastructure is mature — the Bahamas has been an international financial centre for over 50 years and hosts numerous private banks, trust companies, and fund administrators.

What to be aware of

Crime in Nassau — particularly in certain areas — is a real concern, and security is a consideration for families. Hurricane risk is significant: the northern islands are periodically struck by major storms, and property insurance costs reflect this. The cost of living is high — almost everything is imported, and prices for food, goods, and services are substantially above European levels. Healthcare in Nassau is adequate but limited outside the capital. And while the Bahamas has no income tax, stamp duty on real estate can reach 10% on higher-value transactions.

The Bahamas does not ease you in. It hits you the moment the plane descends — that particular shade of blue that exists nowhere else on earth, a turquoise so saturated it looks artificial, the shallow banks glowing from below as if lit from within. You land and the heat wraps around you like a held breath, and the smell of salt and frangipani and something indefinably tropical tells you immediately that you are somewhere that operates by different rules.

The islands stretch in a long arc from Grand Bahama in the north — flat, pine-forested, close enough to Florida that on a clear night you can see the glow of Fort Lauderdale — down through the Abacos, the Exumas, and the Out Islands to the south. The Exumas in particular have a quality that photographers struggle to capture honestly: sandbars that appear and disappear with the tide, water that shifts from jade to cobalt to white depending on the depth, and a silence broken only by the sound of the wind and the occasional splash of a spotted eagle ray. Nassau itself is a city of colonial architecture painted in faded pastels, a covered straw market, and a harbour busy with cruise ships and private yachts moored side by side.

The Bahamian people carry a particular ease — unhurried, warm, and deeply proud of their independence, which came in 1973 after centuries of British colonial rule. The culture is a layered thing: African rhythms in the Junkanoo festival that takes over Nassau's streets on Boxing Day and New Year's Day, British common law in the courts, American accents on the television, and something distinctly Bahamian underneath all of it — a people who have learned to live well at the edge of the ocean, who know how to read the weather and the water, and who have a particular talent for hospitality that does not feel performed.

Life in the Bahamas moves at the pace of the tide. Nassau has traffic and noise and a financial district where serious business gets done. But twenty minutes by boat, the world simplifies dramatically. On the Out Islands, a day might consist of nothing more than a morning swim, a lunch of freshly caught grouper, and an afternoon watching the light change on the water. The proximity to the United States — Miami is closer than many European capitals are to each other — means you are never truly cut off. But the Bahamas has a way of making that distance feel much greater than the map suggests.

"From space, the Bahamas is the most beautiful place on Earth."

"Harbour Island in the Bahamas is beautiful, with turquoise water and pink sand."

"The sea was very beautiful and the light on the water was good."

The Bahamas offers something rare in the modern world: a complete absence of direct taxation. There is no income tax, no capital gains tax, no inheritance tax, no wealth tax, and no corporate income tax. This is not a temporary incentive or a special regime — it is the permanent, baseline tax system of a sovereign nation that has operated this way for generations.

• ›Zero personal income tax — employment income, self-employment income, dividends, interest, and rental income are all untaxed at the personal level.
• ›Zero capital gains tax — gains on shares, property, cryptocurrency, and other assets are not taxed.
• ›Zero inheritance and estate tax — wealth transfers to heirs are not taxed by the Bahamian government.
• ›Zero corporate income tax — Bahamian companies pay no tax on profits.
• ›USD-pegged currency — the Bahamian dollar is fixed 1:1 to the US dollar, eliminating currency risk for USD-denominated income and assets.
• ›English common law — a familiar and reliable legal framework for contracts, property ownership, and dispute resolution.
• ›Proximity to the United States — direct flights to Miami (35 minutes), New York (3 hours), and other major US cities.

The Bahamas does not have a formal income tax system, so the concept of "tax residency" in the Bahamas operates differently from most countries. There is no Bahamian tax authority that will assess you on your worldwide income — because there is no income tax to assess. What matters from a Bahamian perspective is physical presence and legal residence status.

To establish the Bahamas as your country of residence for international purposes — and to use it as the basis for severing tax residency in your home country — you need a valid residence permit and, in practice, you need to spend a meaningful amount of time in the Bahamas. The standard benchmark used by most tax advisers is at least 183 days per year in the Bahamas, combined with a genuine home there and the absence of a habitual abode in your previous country of residence.

The Bahamas has no comprehensive double tax agreements (DTAs) with any major country. This is a direct consequence of having no income tax — there is nothing to double-tax, and therefore no basis for a conventional DTA. The Bahamas has signed a number of Tax Information Exchange Agreements (TIEAs) with countries including the United States, the United Kingdom, Germany, France, and others, but these are transparency agreements, not tax relief treaties.

The absence of DTAs means that income flowing from your home country to the Bahamas — dividends from a German company, for example, or pension payments from a UK pension — may be subject to withholding tax in the source country at the domestic rate, without any treaty reduction. This is a material consideration for anyone with significant foreign-source income, and it must be factored into the overall tax planning before relocating to the Bahamas.

In practice, many residents of the Bahamas manage this through careful structuring — holding income-producing assets in jurisdictions that do have favourable treaty networks, or using holding companies in treaty-friendly locations. These are legitimate planning tools, but they require proper professional advice to implement correctly.

Relocating to the Bahamas does not automatically end your tax obligations elsewhere. The critical question is whether you have genuinely severed tax residency in your country of origin — and this is determined not by where you have registered an address, but by where you actually live, where your ties are, and how your life is organised.

Most countries use a combination of objective tests to determine tax residency: the number of days you spend on their territory, where your family lives, where your habitual abode is, where your business is managed, and where your social and economic life is centred. If you spend more than 183 days in your home country, maintain a family home there, or continue to manage a business from there, you may remain fully tax resident — regardless of what your Bahamian residence permit says.

A key principle that many people overlook: retaining an available dwelling in your home country — whether owned or rented — is one of the most common triggers for continued tax residency. In Germany, Austria, Switzerland, and many other countries, simply having a flat available to you (even if you rarely use it) can be sufficient to maintain unlimited tax liability there. Giving up your home in your previous country is not optional — it is essential.

A sham relocation — registering an address in the Bahamas while continuing to live, work, and maintain your life elsewhere — does not achieve tax freedom. It creates legal risk. We only work with clients who are serious about making a real move to the Bahamas.

Before you relocate to the Bahamas, you need to understand what tax consequences arise in your current country of residence at the point of departure. These rules vary significantly by country and must be assessed individually.

Many countries impose an exit tax or deemed disposal charge when a tax resident leaves. This typically applies to unrealised capital gains on shares, business interests, real estate, or other assets — taxing you as if you had sold everything on the day you departed.

• ›Germany — Applies an exit tax on unrealised gains in shareholdings of 1% or more under §6 AStG. A ten-year look-back period can apply even after departure.
• ›United States — The expatriation tax under IRC §877A treats long-term residents and citizens as having sold all worldwide assets at fair market value on the day they relinquish citizenship or residency.
• ›France — Exit tax applies to unrealised gains on securities and company rights above €800,000 when a French tax resident relocates abroad.
• ›Netherlands — Deemed disposal applies to substantial shareholdings (5% or more) at the point of emigration.
• ›Australia — Departing residents are treated as having disposed of most assets at market value on the date they cease to be Australian tax residents.
• ›Canada — The departure tax deems most property to have been disposed of at fair market value on the date of emigration.

The Bahamas has no corporate income tax. Companies incorporated in the Bahamas pay no tax on profits, regardless of where those profits are generated. The main corporate structures available are:

• ›International Business Company (IBC) — the most commonly used structure for international tax planning. Zero corporate tax, no requirement to file public accounts, and straightforward to incorporate. IBCs cannot conduct business within the Bahamas itself.
• ›Bahamian Business Company (BBC) — for businesses operating locally within the Bahamas. Subject to business licence fees but no income tax.
• ›Limited Partnership — used for fund structures and investment vehicles. Flexible and tax-transparent.
• ›Executive Entity — a relatively new structure designed for family offices and private wealth management.

The key caveat for Bahamian companies is substance. Under OECD BEPS rules and the Bahamas' own Economic Substance Act, companies in certain sectors must demonstrate genuine economic substance in the Bahamas — meaning real management, real employees, and real operations. A brass-plate company with no genuine activity will not satisfy substance requirements and may be challenged by your home country's tax authority.

The Bahamas works well for a specific profile of person. It does not work for everyone.

Good fit for:

• ›US-adjacent entrepreneurs and investors who need to remain close to the American market while eliminating personal income tax.
• ›High-net-worth individuals with passive income (dividends, capital gains, investment income) who want a zero-tax base with a stable legal system.
• ›Retirees with substantial assets who want a warm climate, English-speaking environment, and no tax on pension or investment income.
• ›Remote workers and digital entrepreneurs earning in USD who want to eliminate income tax entirely.

Poor fit for:

• ›Those with significant European-source income — the absence of DTAs means withholding taxes at source can erode the benefit.
• ›Families with children who require high-quality international schooling — options in Nassau are limited and expensive.
• ›Those who cannot genuinely relocate — the Bahamas requires real presence and real ties to work as a tax base.
• ›Those with complex healthcare needs — medical facilities outside Nassau are limited, and serious conditions require evacuation.

Most Western nationals can enter the Bahamas without a visa for stays of up to 90 days. For longer-term residence, the main options are:

• ›Annual Residence Permit — available to individuals who wish to reside in the Bahamas without working. Renewed annually. Requires proof of financial self-sufficiency.
• ›Permanent Residence Permit — the most secure long-term option. Available to those who purchase real estate valued at BSD $750,000 or more. Applications can be fast-tracked for property purchases of BSD $1.5 million or more. Permanent residence does not grant the right to work.
• ›Work Permit — required for any employment or self-employment in the Bahamas. Employer-sponsored. The Bahamas prioritises Bahamian nationals for employment, so work permits for non-Bahamians are granted selectively.
• ›Spouse / Dependent Permit — available to spouses and dependants of permit holders.

The Bahamian immigration system is administered by the Department of Immigration. Processing times vary, and applications for permanent residence tied to property purchases can take 6–18 months unless fast-tracked. Professional immigration assistance is strongly recommended.

Bahamian citizenship is not easily obtained by foreign nationals. The standard naturalisation route requires ten years of lawful residence in the Bahamas, followed by an application to the Cabinet. The process is discretionary — there is no automatic right to citizenship after meeting the residence requirement, and applications can be refused without stated reasons.

Spouses of Bahamian citizens may apply for citizenship after five years of marriage and residence. Children born in the Bahamas to non-Bahamian parents do not automatically acquire citizenship.

The Bahamas does not offer a citizenship by investment programme. There is no route to a Bahamian passport through a financial contribution alone. For most long-term residents, permanent residence — which can be obtained through property ownership — is the practical goal, rather than citizenship.

The Bahamas does not recognise dual nationality in all cases. Bahamians who acquire a foreign citizenship may lose their Bahamian citizenship. This is an important consideration for anyone planning to naturalise.

The Bahamas has a well-developed banking sector with over 200 licensed financial institutions, including major international banks. The currency is the Bahamian dollar, pegged 1:1 to the US dollar, and USD accounts are widely available and commonly used. Opening a personal bank account in the Bahamas as a resident is straightforward for most nationalities, though compliance requirements have increased significantly in recent years.

Major banks operating in the Bahamas include Commonwealth Bank, Scotiabank, Royal Bank of Canada (RBC), and Citibank. Private banking services are available through a number of international institutions, and the Bahamas remains an important centre for offshore private banking and wealth management.

The Bahamas participates in the OECD Common Reporting Standard (CRS) and has signed TIEAs with numerous countries. Financial institutions in the Bahamas are required to report account information for foreign tax residents to the relevant authorities. This is not a problem for genuine Bahamian residents — it is a problem only for those who are using a Bahamian address while actually residing elsewhere.

Beyond the tax advantages, the Bahamas has a number of qualities that make it a genuinely attractive place to live — not just a tax address.

• ›English-speaking: The Bahamas is an English common law jurisdiction with English as the official language — a significant practical advantage for most international residents.
• ›US proximity: Miami is 35 minutes by plane. New York is 3 hours. For those with US business or family connections, this proximity is invaluable.
• ›Climate: Warm year-round, with average temperatures of 25–30°C. The hurricane season (June–November) is the main weather risk, particularly for the northern islands.
• ›Natural beauty: The Exumas, the Abacos, and the Out Islands offer some of the most spectacular water and marine environments in the world.
• ›Stable legal system: English common law, an independent judiciary, and a long history as an international financial centre provide a reliable legal framework.
• ›USD economy: The 1:1 peg to the US dollar eliminates currency risk for USD earners and investors.

The Bahamas is an expensive country to live in. Almost everything is imported, and import duties add significantly to the cost of goods. Food, electronics, vehicles, and building materials are all substantially more expensive than in the United States or Europe.

• ›Rent (Nassau, 2-bed apartment): BSD $2,500–$5,000/month
• ›Groceries: Approximately 40–60% more expensive than comparable US prices
• ›Dining out: BSD $30–$80 per person at a mid-range restaurant
• ›Healthcare: Private health insurance is essential; costs are high. The main private hospital is Doctors Hospital in Nassau.
• ›Comfortable lifestyle (couple, Nassau): BSD $8,000–$15,000/month, excluding property costs

Foreign nationals can purchase real estate in the Bahamas without restriction. There is no requirement to obtain government approval for most residential purchases, and the process follows English common law conveyancing procedures. Title searches, surveys, and legal due diligence are standard and recommended.

The main cost of buying real estate in the Bahamas is stamp duty, which applies to both buyer and seller:

• ›Properties up to BSD $100,000: 2.5% (buyer) + 2.5% (seller)
• ›Properties BSD $100,001–$300,000: 4% (buyer) + 4% (seller)
• ›Properties above BSD $300,000: 10% (buyer) + 10% (seller)

Property prices vary enormously by island and location. Nassau and Paradise Island command the highest prices — waterfront properties regularly exceed BSD $5 million. The Out Islands offer better value, but infrastructure and services are more limited. Purchasing property of BSD $750,000 or more qualifies you to apply for Permanent Residence — making real estate the most straightforward route to long-term legal residence in the Bahamas.

The Bahamas is a popular retirement destination for North Americans and, increasingly, Europeans. The combination of zero income tax on pension and investment income, a warm climate, English language, and proximity to the United States makes it genuinely attractive for retirees with sufficient assets.

• ›Pension income: The Bahamas imposes no tax on pension income. However, your source country may withhold tax at source — this depends on the type of pension and your home country's domestic rules.
• ›Healthcare: Private health insurance is essential. The main private hospital is Doctors Hospital in Nassau. Serious conditions may require medical evacuation to the United States.
• ›Residence permit: Retirees typically apply for the Annual Residence Permit or, if purchasing property, the Permanent Residence Permit.
• ›Cost of living: High. Budget at least BSD $8,000–$12,000/month for a comfortable retirement lifestyle in Nassau.

The United States taxes its citizens on worldwide income regardless of where they live. Moving to the Bahamas does not end your US tax filing obligation.

The United States and the Bahamas do not have a bilateral income tax treaty. There is no US–Bahamas DTA in force. This means Americans in the Bahamas cannot rely on treaty relief to reduce withholding taxes or resolve double taxation — the primary planning tools are the FEIE and the Foreign Tax Credit.

The Foreign Earned Income Exclusion (FEIE)

The primary tool for most Americans living in the Bahamas is the the Foreign Earned Income Exclusion (FEIE) under IRC Section 911. For tax year 2025, the exclusion allows you to exclude up to $130,000 of foreign earned income from US federal income tax. For tax year 2026, the limit rises to $132,900 per qualifying person, adjusted annually for inflation.

• ›Earned income only: The FEIE applies to wages, salaries, and self-employment income earned while your tax home is abroad. It does not cover passive income — dividends, interest, capital gains, pensions, or rental income remain taxable by the US (though you may claim a Foreign Tax Credit for any taxes paid locally).
• ›Qualification tests: You must meet either the Bona Fide Residence Test (being a bona fide resident of a foreign country for an uninterrupted period covering an entire tax year) or the Physical Presence Test (being physically present in a foreign country for at least 330 full days in any 12-month period).
• ›Self-employment tax still applies: The FEIE reduces income tax but does not eliminate US self-employment tax (15.3%) on net self-employment income. This is a significant cost for freelancers and sole traders.
• ›FBAR and FATCA reporting: Americans with foreign bank accounts exceeding $10,000 must file an FBAR annually. FATCA reporting thresholds apply to foreign financial assets. Bahamian banks participate in CRS, and account information is exchanged internationally.

If you live in the Bahamas and are a genuine tax resident there, the OECD Common Reporting Standard (CRS) presents no problem. You are legally entitled to hold accounts abroad and receive capital income without Bahamian tax. Your status as a Bahamian resident will be known to your banks, and any information exchanged under CRS will simply confirm what you have already declared.

The CRS is a threat only to those who are not genuine residents of the Bahamas but are using a Bahamian address to conceal income from their actual country of residence. For legitimate residents of the Bahamas, CRS is irrelevant — you are not evading taxes, you are simply living in a country that does not impose them.

Beyond the tax and immigration steps, relocating to the Bahamas involves a number of practical formalities. These include deregistering from your home country's residents' register, notifying your home country's tax authority of your departure, closing or restructuring any business interests that could create continued tax nexus, and ensuring your financial accounts are correctly documented with your new Bahamian address.

In your home country, you will typically need to: file a final tax return for the year of departure, notify the tax authority of your change of residence, and — in countries with exit tax provisions — file the relevant exit tax return and pay any amounts due. Failure to complete these steps properly can result in continued tax liability in your home country even after you have physically moved to the Bahamas.

In the Bahamas, you will need to: obtain your residence permit, open a Bahamian bank account, register your address with the relevant authorities, and — if purchasing property — complete the conveyancing process and register the title. We assist with coordinating all of these steps as part of our relocation service.

A move to the Bahamas is not complicated — but it requires proper planning. The tax advantages are real, but they only materialise if the relocation is executed correctly. We work with clients at every stage of the process, from the initial feasibility assessment through to the final deregistration from their home country.

• ›Tax advice on the consequences of relocating to the Bahamas: analysis, projections, assessments
• ›Clarifying location questions for your business in the Bahamas based on factors such as market access, available workforce, and public subsidies — in collaboration with local experts
• ›Recommendations for local estate agents experienced with international clients, for both rental and purchase in the Bahamas
• ›Referrals to specialist immigration lawyers for Bahamian residency and permit matters
• ›Introductions to local tax advisers who handle the opening of bank accounts for both the company and you personally in the Bahamas
• ›Ongoing tax and administrative management of your Bahamian company
• ›Tax-efficient structuring and restructuring of assets via foreign companies, holding structures, and trusts