Investing in the Bahamas as a Foreigner 2026: Property, Funds and the Zero-Tax Frame

Investing in the Bahamas means no tax on income or gains. The real costs come at the door: transfer VAT, property tax, permits and insurance.

Investing in the Bahamas starts with a simple promise: no personal income, capital-gains or inheritance tax. The price of entry is paid elsewhere, through transfer VAT, property tax, paperwork and exposure to hurricanes and American tourism.

The Bahamas is an archipelago of about 403,000 people, according to World Bank data for 2025. That is slightly more than Iceland’s 392,000 on the same data, spread across many islands.

Output per person was about US$39,455 in 2024, less than half the US level of about US$86,170. The whole economy measured about US$15.8 billion that year, on the same World Bank data.

The Bahamas levies no personal income, capital-gains, inheritance or gift tax, according to PwC’s tax summary reviewed in July 2026. There are no personal income tax returns to file.

The state lives instead on value added tax (VAT), a sales tax charged at each stage of supply. The Department of Inland Revenue sets the standard rate at 10%. A reduced 5% rate covers listed items such as some medicines.

Unprepared grocery food has been free of VAT since 1 April 2026, the government’s May 2026 budget statement said. In the 2025/26 period it reviewed, VAT raised about US$1.1 billion, or 43.8% of all government revenue.

The zero-tax frame covers Bahamian tax only. The United States taxes its citizens on worldwide income wherever they live. Other home countries apply their own residence and exit rules.

Large multinational groups are the main exception. The Domestic Minimum Top-Up Tax Act, 2024 sets a minimum effective tax rate of 15% for groups under the OECD’s global rules.

The low-tax model draws outside scrutiny. The Council of the European Union listed the Bahamas as a non-cooperative tax jurisdiction on 4 October 2022. The reason given was a failure to enforce economic-substance rules for zero-tax companies.

It was removed on 20 February 2024 after progress on enforcement. In the EU’s 17 February 2026 review, it sat among cooperative jurisdictions with no pending commitments. The next review is due in October 2026.

The Bahamian dollar has been fixed at par with the US dollar since 1973, according to the Central Bank of The Bahamas. On 25 September 2026, open.er-api.com quoted exactly 1.00 Bahamian dollar per US dollar.

The central bank itself buys US dollars from commercial banks at the same one-for-one rate. Bahamian law sets fees and thresholds in Bahamian dollars, so this guide quotes them directly in US$.

The peg is protected by exchange control, run by the central bank’s Exchange Control Department. A non-resident who brings in foreign currency to buy property registers that investment, a status called Approved Investment Status.

That status guarantees the right, on application, to repatriate sale proceeds and rental income, the central bank says. The investor must document that the money came from abroad.

Since October 2019, residential deals involving non-residents no longer need prior central-bank approval. Commercial banks may sell foreign currency to repatriate residential sale proceeds, but non-resident-owned companies may not buy property with Bahamian-dollar loans.

From 1 April 2024, non-residents buying non-residential or mixed-use property with foreign money can also close without the central bank. Development projects and purchases using local financing still need its approval.

Foreign ownership of land is governed by the International Persons Landholding Act of 1993. The Investments Board of the Bahamas Investment Authority administers it through two routes: a Certificate of Registration or a permit.

A non-Bahamian buying a first home for personal use registers the purchase after closing. The exception is undeveloped land that would leave the buyer holding two or more contiguous acres, which needs a permit.

A permit is also required for a second property or any purchase for investment or commercial use. It must be granted before closing, or the purchase is void under the Act.

Each document costs US$1,000, according to law firm Lennox Paton’s chapter for the Legal 500 guide. Since July 2024, a permit lapses if the buyer misses a 180-day deadline. By then the VAT must be paid, the Chief Valuation Officer notified and property tax paid.

Since July 2025, an unused permit can be extended for 180 days, at most twice, by filing a notice and paying a fee. Large developments also go to the National Economic Council, usually made up of the prime minister, other ministers and senior officials.

Transfer VAT is the largest closing cost. Non-Bahamian buyers pay 10% of the value, so a US$1 million house carries US$100,000 in VAT. Mortgages attract 1% of the sum secured.

Bahamian buyers of homes pay tiered rates from 2.5% to 10%. Since 1 July 2025, a provisional VAT invoice from the Department of Inland Revenue must be obtained before any conveyance is signed.

The assessed VAT must be paid within 180 days of signing, and the deed recorded within the same period. Unpaid transfer VAT ranks ahead of mortgages and other claims on the property.

Owners pay annual real property tax, based on market value, use and the owner’s status. Bahamians are exempt on vacant land and on property in the Family Islands, the islands outside New Providence.

On 1 July 2026, the Real Property Tax (Amendment) Act created a new class called foreign owner-occupied property. It covers non-Bahamians with a residence permit, annual work permit or Home Owner Resident Permit who live in the home.

The occupation can be permanent or seasonal. This replaced the old test of spending 180 days a year in the country, the May 2026 budget statement said.

That class pays 0.625% on value up to US$1 million and 1% above, capped at US$200,000 a year. On those rates, a US$2 million home would owe about US$16,250 a year.

Bahamians and permanent residents with the right to work pay the owner-occupied rate on the home they live in. The first US$300,000 of value is exempt, with 0.625% on the next US$200,000 and 1% above, capped at US$150,000 a year.

Most foreign-owned homes outside the new class, such as rentals, are treated as commercial property. The Department of Inland Revenue lists 0.75% on the first US$500,000, 1% on the next US$1.5 million and 1.5% above.

Foreign-owned vacant land pays US$100 on the first US$7,000 of value and 2% on the rest, on the same schedule. Bills must be paid by 31 December to avoid an extra 5% interest charge.

Arrears are costly. Under the 2026 amendment, the Treasurer may sell a property after more than 12 months of unpaid tax. The budget statement said foreign-owned collections had fallen short.

Funds and securities are supervised by the Securities Commission of The Bahamas (SCB), a statutory regulator set up in 1995. It administers the Investment Funds Act, 2019, the Securities Industry Act, 2024 and the digital-asset law.

Every fund operating in or from the Bahamas must be licensed or registered, as a professional, standard, SMART or master fund. A professional fund may be sold only to eligible investors.

Eligible individuals include those worth more than US$1 million, or those earning over US$200,000 in each of the last two years. Banks, insurers, regulated funds and securities firms also qualify.

SMART stands for Specific Mandate Alternative Regulatory Test. A financial institution or adviser proposes a fund structure for the SCB to approve. Funds built on that template must then follow its written rules.

Digital assets came under the Digital Assets and Registered Exchanges Act, 2020, known as the DARE Act. FTX Digital Markets, the Bahamian arm of the FTX crypto exchange, was incorporated in July 2021 and registered under it.

On 10 November 2022, the SCB froze FTX Digital Markets’ assets, suspended its registration and sought a court-appointed provisional liquidator. The regulator says this was the first action taken anywhere against an FTX entity.

Two days later, the SCB moved the firm’s digital assets into digital wallets under its exclusive control. FTX founder Sam Bankman-Fried was arrested in the Bahamas on 12 December 2022 at the request of the US government.