Company Registration

Foreign Ownership Rules in Bahamas: Sector Restrictions, Shareholding Laws & Compliance 

The Bahamas is one of the Caribbean’s most established international business centers. It is an appealing base for investors looking to operate globally. For this, investors need to understand the foreign ownership rules in the Bahamas. It helps them settle in and establish their business presence quickly.  

Under the International Business Companies Act, 2000, the Companies Act, 1992, and the National Investment Policy (NIP), the Bahamas welcomes foreigners to own companies, with 100% foreign shareholding in certain cases. This is just the tip of the iceberg. Read the blog to know more about the foreign ownership rules in Bahamas.  

Emerging Sectors with respect to Foreign Ownership Rules in Bahamas 

The Bahamas is an amazing place to do business. Business enthusiasts seeking company formation in the Bahamas must know about the major sectors of the Bahamas. Key Emerging Sectors attracting investment include the following:  

• Niche tourism 

• Non-oil and renewable energy 

• Extractive industries 

• Digital technology 

The government is prioritizing non-oil energy projects, including a transition from diesel to liquified natural gas (LNG), solar projects, major road work, and significant healthcare infrastructure initiatives. 

Onshore and Offshore: Distinction under Foreign Ownership Rules in Bahamas 

The country distinguishes between offshore and onshore activity: 

• Offshore activity (international operations) generally allows full foreign ownership through an International Business Company (IBC) with minimal restrictions. 

• Onshore economic activity (local commerce, hiring, or physical presence) may require government approvals and is subject to the Bahamian-only “Reserved List.” 

Legal Framework for Foreign Ownership Rules in Bahamas 

The Bahamas has two legal company regimes: the IBC Act (offshore) and the Companies Act (onshore). 

• Unless the activity is on the official “Areas Reserved for Bahamians” list in Section 5 of the National Investment Policy, foreigners can fully own companies under both the above-mentioned governing Acts. For example, retail and wholesale operations, domestic real estate agencies, and commercial fishing are all expressly listed in Section 5: Areas Reserved for Bahamians. 

• Operating offshore through an IBC avoids many restrictions. On the other hand, compliance requirements like BIA approval are required in order to operate onshore, making it a more restricted pathway to operate a business in the Bahamas. 

Sector Restrictions under Foreign Ownership Rules in Bahamas 

The Bahamas allows full foreign ownership except where the law protects Bahamian entrepreneurial sectors.  

The list contains the following sectors: 

• Wholesale and Retail Operations 

• Import/Export/Trade commission agencies  

• Real Estate and Domestic property management agencies 

• Domestic newspaper and magazine publication 

• Domestic advertising and public relations firms 

• Construction companies (except for specialized projects for which international expertise is required) 

• Nightclubs and restaurants, except specialty, gourmet and ethnic restaurants; restaurants operating in a hotel, resort complex or tourist attraction 

• Security services. 

• Personal cosmetic/beauty establishment 

• Domestic distribution of building supplies 

• Auto and Appliance service operations 

• Commercial fishing 

• Public Transportation 

• Gaming operations 

All non-reserved sectors are open to 100% foreign ownership, subject to approvals from the relevant regulatory body. This reserved list shapes how foreigners structure their Bahamian businesses. Structuring an offshore business will fall under IBC and cannot be with respect to a sector mentioned in the list of “reserved” sectors. 

Shareholding & Corporate Structure under Foreign Ownership Rules in Bahamas 

• Unless in restricted sectors, foreigners can own 100% of shares in Bahamian companies. 

• The shareholding framework is flexible: multiple classes, voting rights, nominees allowed. 

• Companies require only one director, and the directors can be of any nationality. 

• Under the foreign ownership rules in Bahamas, every company is mandated to maintain a Bahamian registered agent and a registered office. 

Approval & Compliance Requirements under Foreign Ownership Rules in Bahamas 

Foreign investors must understand four key compliance regimes when operating domestically: 

1. The BIA approval is required for all foreign participation in onshore business. This is in place to ensure foreign investment is aligned with national policy, economic/ environmental impact is assessed, and regulatory approvals are secured. 

2. Exchange control is required to be complied with and is regulated by the Central Bank of The Bahamas. It ensures that businesses are operating in line with the Exchange Control Regulations. This governs aspects such as capital flows, share transfers, and dividends, to monitor foreign currency flows, maintain the parity of the Bahamian dollar, protect reserves etc. 

3. Under the Register of Beneficial Ownership Act, 2018, every Bahamian company, including international business companies, must give their registered agent details .  An agent is an individual who owns or controls them. In case of any change in ownership or control, the company has to update this information within 15 days. 

4. Economic substance imposes itself upon companies conducting “relevant” activities. These certain companies and their activities must prove local substances.  

The relevant activities include nine categories of business activities as below: 

• Banking Business 

• Insurance Business 

• Fund Management Business 

• Finance and Leasing 

• Headquarters Business 

• Shipping Business 

• Distribution and Service Center Business 

• Intellectual Property Business 

• Holding Business 

The “economic substance test” requires: 

• Direction & Management: To comply with the economic substance test under the Bahamas shareholding rules, a company must show real management presence in the Bahamas. You can organize board meetings while ensuring board directors attend, and have skilled staff. Also, it is essential to keep records locally.  

• Core income generating activities (CIGA): Core income-generating activities (CIGAs) are the main business functions. A company must conduct these business functions in the Bahamas. It proves the substantial economic operations, which exist not just on paper. Examples of CIGA in the Bahamas: Banking, Insurance, Fund Mmanagement, Shipping & Headquarters business. 

• Adequate Level under the Bahamas Shareholding Rules: To comply with shareholding rules, the company must represent real business activities. It includes employing qualified local staff, spending appropriately on operations, and maintaining proper physical offices. 

Taxation & Licensing Environment under Foreign Ownership Rules in Bahamas 

The Bahamas is known for maintaining a largely tax-neutral regime with no personal or corporate income tax. Instead of relying upon individual or corporate income tax, it imposes indirect taxes, such as VAT, applicable at the 10% rate. Along with VAT, a turnover-based business licence is taxed under the Business Licence Act, 2023. 

While the environment remains investor-friendly, tax and accounting compliance requirements have become more structured. From January 2025, large multinational groups with global revenue above EUR 750 million are subject to a new 15% Domestic Minimum Top-Up Tax. Businesses must register for VAT if annual supplies exceed BSD 100,000, and comply with customs, stamp duty, and property tax obligations.  

Choosing the Right Legal Structure Under Foreign Ownership Rules in Bahamas 

The Bahamas provides multiple company structures for investors, each serving different purposes.  

• An International Business Company (IBC) is best suited for offshore operations and tax efficiency.  

• A Limited Liability Company (LLC) offers flexibility and shields owners from personal liability.  

• An Exempted Limited Partnership works well for fund management and investment ventures.  

Conclusion 

The Bahamas has positioned itself as a competitive, and investor-friendly destination for foreign investors, while its reserve-sector policy safeguards the commercial interests of local businesses. This balance between domestic protection and international openness has supported steady and sustainable growth. International Business Companies enjoy a fast, flexible, and low-friction operating environment, with clear yet firm compliance measures such as BIA approvals, Central Bank oversight, and beneficial ownership reporting. 

Although the Bahamas used to have weaker transparency rules that led international bodies like the OECD and the European Union to put it on blacklists. In response, the Bahamas strengthened its regulatory framework, introducing economic substance and ownership disclosure rules that align with modern global norms.  

For getting expert help in business setup in the Bahamas or any insights on the regulations, consult our network of professionals at Enterslice. 

All You Need To About Foreign Ownership Rules in Bahamas