Business & Investment Real Estate

COMMERCIAL & RETAIL || HOTELS & DEVELOPMENTS || FOREIGN INVESTOR PERMIT

Starting a small business or working in the Bahamas as a non-Bahamian is not straightforward. Immigration and labor laws are actively enforced, and work permits are required for any form of employment or business operation. Unlike in some neighboring regions, “moonlighting” or informal work arrangements carry real risk. For this reason, the Bahamas is best suited for investors or entrepreneurs who already hold government approval to operate a specific type of business—or for those whose income derives from abroad.

That said, earning income through real estate investment is entirely open to foreign buyers. There are currently no restrictions on purchasing property for the purpose of renting, whether short-term vacation rentals or long-term leases. Many investors quietly build diversified portfolios across multiple islands, earning untaxed rental income or profit from property appreciation. Buying, renovating, and reselling property—or developing vacant land—is also permitted and common practice among foreign investors.

Historically, homeowners who rented their vacation properties intermittently were not required to register them as commercial enterprises. However, the government has begun implementing regulations to register all vacation rentals and apply a 12% VAT on rental income. While enforcement remains uneven, compliance is simple and advisable—and it signals participation in the country’s growing, legitimate vacation rental sector. Ideally, this initiative will not only broaden revenue for the nation but also help improve infrastructure and local services in residential areas.

Commercial & Retail Real Estate

Commercial opportunities in the Bahamas—particularly in Nassau—continue to expand as the economy diversifies and new developments take shape. The western corridor of New Providence has become the island’s leading hub for growth, with vibrant mixed-use centers such as Old Fort Bay Towne Centre, Windsor Park, and the Airport Industrial Park attracting both local and international tenants.

Investors will find a range of possibilities, from office and retail space to light industrial and logistics properties, catering to the island’s expanding financial, tourism, and service sectors. For those seeking long-term returns, developing and leasing commercial space in these high-demand areas offers a solid path for portfolio growth and participation in the country’s ongoing modernization.

Buying Property

Living in the Bahamas

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Hotel & Residential Developments

Hotel and residential projects remain among the most actively encouraged forms of Foreign Direct Investment (FDI) in the Bahamas. The government offers a variety of incentives to qualified investors—particularly those focused on tourism infrastructure, resort communities, and sustainable development in the Out Islands.

That said, even experienced international developers can underestimate the unique complexities of building in an island environment. Before acquiring large tracts of beachfront land, it is critical to understand local market demand, the regulatory landscape, logistical constraints, and the true costs of importing materials and labor.

While the Bahamas presents exceptional opportunities for well-planned resort and residential projects, successful ventures are typically those supported by comprehensive feasibility studies, local partnerships, and a clear understanding of government approval processes and infrastructure limitations.

When executed with foresight and collaboration, these developments not only offer significant long-term returns but also contribute to the continued growth and diversification of the Bahamian economy.

Foreign Investor Permit

A Foreign Investor Permit is technically required under Bahamian law for certain categories of property ownership by non-Bahamians. While the process is straightforward and typically handled by your conveyance attorney, it is important to understand when and why it applies.

In most cases, the permit functions as a registration and formal approval process, confirming the government’s awareness of the transaction rather than serving as an obstacle to ownership. Once approved, the property is recorded with the Investments Board under the Ministry of Finance.

A permit is required in the following instances:

Purchasing multiple properties: Each additional property must be registered separately, even if owned under the same name or entity. Your attorney will usually manage these filings as part of the title transfer process.
Acquiring undeveloped land exceeding five acres: Larger parcels trigger automatic review to ensure alignment with national development objectives and land use policy.
Purchasing property for commercial use: If your stated intent involves operating a business, offering full-time vacation rentals, or engaging in other income-generating activity, a permit is required prior to completion.

For the majority of second-home buyers and residential investors, the application is a formality rather than a hurdle. Only large-scale developments or transactions tied to significant commercial activity tend to attract closer scrutiny.

Once granted, the permit ensures compliance with Bahamian property laws and facilitates clear title registration—protecting both your investment and your ability to sell or transfer the property in the future.

Incentives & Heads of Agreement

The Bahamian Government actively encourages Foreign Direct Investment (FDI), particularly projects that generate local employment, support sustainable development, and contribute to the economic growth of the Out Islands. While there are no standardized incentive guidelines, the level of government engagement and available concessions often vary depending on the scale, location, and community impact of a project.

In general, smaller-scale residential or hospitality investments in Nassau or Paradise Island may proceed without significant government involvement. However, in the Out Islands, where economic activity is more limited, even modest developments can make a substantial impact. A $3 million investment in an eco-resort, boutique hotel, or residential enclave can attract the attention of local representatives and may qualify for benefits such as:

Import duty and VAT exemptions on building materials and equipment
Real property tax concessions
Infrastructure improvements (roads, docks, utilities) supported by local government
Work permits for key personnel and family members

For larger developments, these incentives are formalized through a Heads of Agreement (HOA) — a binding contract between the investor and the Government of The Bahamas outlining the obligations of both parties. The agreement typically specifies the scope of the project, investment commitments, timelines, and the range of concessions offered by the government.

It’s important to note that these negotiations should occur prior to land acquisition or commencement of development, as the government’s leverage and willingness to provide incentives generally diminish once a project has begun. Engaging experienced Bahamian legal counsel and development advisors early in the process is essential to ensure that the terms of the Heads of Agreement are both favorable and enforceable.

Real Property Tax for Commercial Property

Commercial properties in the Bahamas are subject to higher Real Property Tax (RPT) rates than residential holdings. The assessment is typically based on the current market value of the property, as determined at the time of purchase or by subsequent appraisal.

For properties valued below $500,000:
- A tax rate of 1% per annum of the property’s market value applies.
For properties valued above $500,000:
- A tax rate of 2% per annum is applied to the full market value.

In most cases, the valuation is determined by the initial purchase price; however, for development projects or large commercial holdings, the value is based on what the property would reasonably achieve if sold on the open market.

Owners should also be aware that property values may be periodically reassessed by the Department of Inland Revenue, particularly if substantial improvements or new construction have been undertaken.