The Bahamas
Zero Tax in the Atlantic

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, and no general corporate income tax. VAT applies at 10% standard (5% on certain essentials including basic foods, medical supplies, hygiene products, baby and adult diapers, and feminine hygiene products) and is the country's main source of government revenue, alongside import duties, business licence fees, real property tax, and VAT/stamp duty on real estate transactions. A 15% Domestic Minimum Top-Up Tax was introduced from 2024 under the DMTT Act, applying only to multinational groups with global revenues of €750 million or more — ordinary residents and most companies are not affected. 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.

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 on individuals. There is no personal income tax, no capital gains tax, no inheritance tax, no wealth tax, and no general 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. Government revenue comes from VAT (10% standard), import duties, business licence fees, real property tax, and stamp duty / VAT on real estate transactions. The 2024 implementation of OECD Pillar Two introduced a 15% domestic minimum top-up tax for in-scope multinational groups only — it does not affect ordinary residents or small to mid-size companies.

• ›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, estate, and gift tax — wealth transfers to heirs are not taxed by the Bahamian government.
• ›Zero general corporate income tax — most Bahamian companies pay no tax on profits. The only exception is the 15% Domestic Minimum Top-Up Tax (DMTT) introduced under the DMTT Act 2024, which applies exclusively to multinational groups with annual global revenues of €750 million or more.
• ›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, anchored in over three centuries of British legal tradition.
• ›Proximity to the United States — direct flights to Miami (35 minutes), New York (3 hours), London (8 hours), and other major hubs make the Bahamas one of the most accessible zero-tax jurisdictions in the world.
• ›No double tax agreements — but extensive TIEAs — the Bahamas does not have comprehensive DTAs (there is nothing to double-tax), but it has Tax Information Exchange Agreements with the US, UK, Germany, France, and many other countries. Source-country withholding on foreign income flowing to Bahamian residents must be planned for separately.

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.
• ›Domestic Minimum Top-Up Tax (DMTT) — multinationals only: Companies that are part of multinational enterprise groups with annual global revenues of €750 million or more in two of the last four years are subject to a 15% domestic minimum top-up tax under the DMTT Act 2024 (enacted 29 November 2024), implementing OECD Pillar Two. Ordinary trading companies and SMEs are not affected. In-scope MNEs must file the GloBE Information Return within 15 months of fiscal year-end.
• ›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.

Is a local company always the right answer?

Not necessarily. For many internationally mobile entrepreneurs, the local company is not the most efficient operating vehicle. A local company is useful when you have local staff, local premises, local customers, or regulated local activity. If your business earns income internationally, an international structure may be cleaner.

• ›US LLC — often suitable for non-US owners with non-US income who need simple administration and good payment access.
• ›Singapore company — useful where banking reputation, Asian counterparties, and strong legal infrastructure matter.
• ›UAE company — useful for zero-tax or low-tax operating structures when substance, management, and banking can be handled properly.

Learn more about our company setup services →

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 — for individuals who wish to reside in the Bahamas without working, renewable annually. Requires proof of financial self-sufficiency. Useful as an entry-level long-stay option below the PR investment threshold.
• ›Economic Permanent Residence (EPR) — the primary route for high-net-worth individuals. The minimum qualifying investment was raised to BSD $1,000,000 effective 1 January 2025 (up from $750,000), in either approved residential real estate or Zero-Coupon Bonds issued by the Central Bank of the Bahamas. The investment must be maintained for at least 10 years. Government fee: $20,000 standard, $25,000 with work rights. Applications above $1.5 million qualify for accelerated processing (typically 3 weeks to 3 months versus the standard 6–18 months). Permanent residency is granted for life subject to maintaining the investment, the 10-year hold, and approximately 90 days per year of presence.
• ›Bahamas Extended Access Travel Stay (BEATS) — a remote-worker permit valid for one year, requiring minimum income that is effectively nominal. Designed for digital nomads and remote employees of foreign companies. Does not lead to permanent residency.
• ›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, with family members typically included on the principal EPR application for an additional fee per dependant.

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 is a zero-income-tax jurisdiction, but it is not a low-cost jurisdiction. Almost everything is imported, property and insurance are expensive, and Nassau or the better islands require a serious budget.

Typical monthly costs for an internationally mobile professional or family in the Bahamas (2026 planning ranges):

Comfortable single professional (no children): BSD 6,000–10,000/month (£4,700–7,800 / $6,000–10,000)

Family of four with private schooling: BSD 14,000–24,000/month (£10,900–18,700 / $14,000–24,000)

These figures are planning ranges, not promises. The actual budget in the Bahamas depends heavily on housing quality, neighbourhood, school choice, healthcare needs, car ownership, travel frequency, and whether you are trying to live like a local or maintain a Western expatriate standard.

Buying real estate in the Bahamas can be useful for lifestyle, residence planning, and long-term anchoring, but it should not be treated as a simple shortcut to tax residence. Property is a factual tie; it can support a relocation story when used properly, but it can also create tax, inheritance, financing, and exit issues if bought before the wider plan is clear.

For internationally mobile buyers, the main points in the Bahamas are:

• ›Ownership rules: Foreigners can buy freehold property, and property ownership is often used as part of broader residence planning.
• ›Transaction costs: Stamp duty/VAT on conveyances, legal fees, and broker commissions make entry costs significant, especially in high-end island markets.
• ›Market and rental profile: Nassau, Paradise Island, Exuma, and Abaco are the most relevant markets for internationally mobile buyers, but liquidity varies sharply by island.
• ›Residence and tax angle: The main risks are hurricane exposure, insurance cost, title diligence, construction quality, and overpaying for lifestyle assets with limited resale depth.

The practical approach is to decide first whether the property is primarily for living, residence support, rental yield, asset protection, or lifestyle. Those are different purchases. A good real estate decision in the Bahamas begins with title due diligence, tax-residence planning, inheritance review, and a realistic exit strategy — not with glossy developer brochures.

Transaction cost table (Bahamas)

Retiring in the Bahamas can make sense for the right profile, but it should not be reduced to a simple tax headline. The real question is whether the country gives you the right combination of residence security, pension treatment, healthcare access, cost of living, climate, and day-to-day comfort. A retirement move is harder to reverse than a business relocation, so practical quality of life matters as much as tax.

For retirees considering the Bahamas, the main points are:

• ›Residence route: The practical route is usually the annual or permanent residence based on property ownership or independent means. This should be confirmed before making property commitments or moving assets, because a pleasant destination is not useful if the residence basis is weak.
• ›Pension income: Foreign pension income is not taxed locally because the bahamas has no personal income tax, although the source country may still tax it. The decisive point is often not only local tax, but whether the pension-paying country continues to tax the pension at source.
• ›Healthcare: Good private clinics in nassau and freeport, with serious specialist care often handled in florida. Retirees should arrange private insurance or a clear local healthcare pathway before arrival, especially where pre-existing conditions are involved.
• ›Cost of living and lifestyle: Beach lifestyle, english language, proximity to the us, and a familiar common-law environment. The country can work well where the retiree’s lifestyle expectations match the local rhythm rather than an imagined expatriate brochure.
• ›Climate and practical fit: Tropical climate with hurricane-season risk and higher island-living costs. Climate, language, bureaucracy, transport, and access to family often decide whether the move remains attractive after the first year.

The Bahamas should therefore be assessed as a full retirement platform, not merely as a tax jurisdiction. The best candidates are retirees who have stable foreign income, good health coverage, a realistic view of local bureaucracy, and a clear plan for where they will live, how they will receive care, and how their pension will be taxed both locally and at source.

US citizens and long-term green card holders are taxed by the United States on their worldwide income, regardless of where they live. Relocating to the Bahamas does not end US tax obligations — it changes the picture, but does not eliminate it.

Key considerations for US citizens in the Bahamas:

• ›Foreign Earned Income Exclusion (FEIE): US citizens who qualify as bona fide residents of the Bahamas or pass the physical presence test can exclude a significant amount of foreign earned income from US federal income tax. This applies to wages and self-employment income — not passive income such as dividends, interest, capital gains, pensions, or rental income.
• ›Foreign Tax Credit: Income tax paid in the Bahamas can generally be credited against US tax on the same income, reducing or eliminating double taxation. The credit is particularly important for income not covered by the FEIE and for taxpayers whose income exceeds the annual FEIE threshold.
• ›Treaty position: The United States and the Bahamas do not have a comprehensive income tax treaty. Planning usually relies on domestic US rules, the FEIE where available, and careful classification of income. A treaty does not automatically remove US filing obligations, and most treaties contain savings-clause rules that preserve US taxation of citizens.
• ›FBAR: US persons with bank accounts in the Bahamas exceeding $10,000 in aggregate must file FinCEN Form 114 (FBAR) annually. Failure to file can carry severe penalties, even when no tax is due.
• ›FATCA: US citizens may also need to report foreign financial assets on Form 8938. Banks in the Bahamas may separately identify US account holders under FATCA procedures and report account information through the relevant channels.
• ›Social Security and self-employment tax: The FEIE reduces income tax but does not automatically eliminate US self-employment tax. Whether US Social Security tax applies depends on employment status, entity structure, and any applicable totalization agreement.

US citizens considering the Bahamas should work with a qualified US international tax adviser alongside local counsel. The interaction between US tax law and Bahamas tax law is manageable, but it requires careful planning before the move, not after the first filing deadline arrives.

The Bahamas participates in the OECD Common Reporting Standard (CRS), the global framework for automatic exchange of financial account information between tax authorities. The Bahamas has been exchanging information with partner jurisdictions since 2018.

In practical terms, this means: if you hold bank accounts or financial assets in the Bahamas, the financial institution in the Bahamas will report your account details — balance, income, and identifying information — to the local tax authority, which will then automatically share this information with the tax authority of your country of tax residence.

The key point is that CRS follows tax residence, not nationality or citizenship. For example, a Swedish citizen who has genuinely become tax resident in the Bahamas is treated, for CRS purposes, as a tax resident of the Bahamas — not as a Swedish reportable person merely because of the passport. The same principle applies to any non-US nationality: the account should be reported to the country of tax residence, not automatically to the country of citizenship.

CRS does not create a tax liability — it creates transparency. If you are properly tax resident in the Bahamas and have correctly severed residency in your home country, CRS reporting simply confirms what should already be declared. The risk arises when individuals attempt to maintain dual residency, leave old tax-residence indicators unresolved, or claim the Bahamas residency without genuinely living there.

US citizens are different. The United States does not participate in CRS in the same way. Americans are affected by FATCA instead: banks outside the United States generally identify US persons and report their account information through FATCA channels to the US authorities, regardless of whether the person is tax resident in the Bahamas or anywhere else.

Upon establishing residence in the Bahamas, you will need to obtain a TIN (Taxpayer Identification Number) from the competent local authority. This is required for most financial and legal transactions in the Bahamas, including opening bank accounts, signing contracts, registering with tax authorities, and dealing with public offices.

You will also need to obtain or complete the relevant Bahamian residence permit documentation process once your residence status has been approved. This document or registration record becomes your practical proof of residence in the Bahamas and is usually required for banking, telecom contracts, utilities, leases, property transactions, and day-to-day administrative matters.

• ›Driving licences from most countries are accepted only for a limited period after arrival. Once you become resident in the Bahamas, you should verify whether your licence can be exchanged directly or whether a local medical certificate, translation, theory test, or practical test is required.
• ›Health insurance should be arranged before arrival unless you are immediately covered by a local public system. In many cases, private international cover is the safest bridge solution while residence, employment, or social-security registration is still being completed.
• ›Importing personal effects should be planned before shipping anything to the Bahamas. Household goods may qualify for relief when imported shortly after taking up residence, but customs paperwork, inventory lists, timing rules, and vehicle-import duties can make late or informal shipping expensive.
• ›Proof of address and banking are often linked. Banks, telecom providers, and government offices may require a lease, utility bill, local address certificate, or residence registration before they will open an account or complete onboarding.
• ›Ongoing local compliance should not be treated as an afterthought. Calendar reminders for residence renewals, tax registrations, local filings, health-insurance renewals, and address updates help prevent administrative problems that can later undermine the tax-residency position.

We offer comprehensive tax and legal support for your relocation to the Bahamas. We follow a proven process — and where the Bahamas requires specialist local input, we involve appropriately qualified local tax, legal, immigration, and banking advisers on the ground, while remaining responsible for overall coordination.

The results speak for themselves: we have helped over 100 entrepreneurs and business owners significantly reduce their tax burden through carefully planned relocations. Careful planning, thorough advice, and comprehensive support are our standard. Legally sound structuring within the framework of international tax law is our highest priority.

Our services typically include one or more of the following:

Our fees are generally billed on a time basis; fixed prices apply for certain services such as company formation.

As a first step, we recommend booking a consultation to discuss your plans — by phone, Zoom, or Signal. Together we find the best approach and establish contact with our local partner. As project coordinator, we keep all the threads in hand that are necessary for the successful implementation of your plans.