Bahamas Residency: Annual Permit and Permanent Residency Options

The Bahamas is one of the original zero-tax jurisdictions. With no income tax, no capital gains tax, no wealth tax, and no inheritance tax, it has attracted UHNW individuals and families for decades. Residency is obtained through property investment, with the threshold and benefits varying by investment level.

Tax Environment

The Bahamas imposes:

• No personal income tax
• No capital gains tax
• No corporate income tax
• No inheritance or estate tax
• No wealth tax
• No withholding tax

Government revenue comes from VAT (10%), import duties, stamp taxes on property transfers, and business licence fees. The zero direct tax regime is constitutionally embedded and has been maintained since independence in 1973.

Residency Options

Annual Homeowner's Residence Card

• Requirement: Own property in the Bahamas (no minimum value for basic card)
• Duration: 1 year, renewable annually
• Rights: Right to reside in the Bahamas; does not include work rights
• Cost: BSD 500-1,000 annual fee
• Processing: 4-8 weeks

Permanent Residency — Standard

• Requirement: Own property valued at BSD 500,000+ (approximately USD 500,000, as the Bahamian dollar is pegged 1:1 to USD)
• Duration: Permanent (no renewal required)
• Rights: Right to reside permanently; does not include work rights
• Cost: Application fee of approximately BSD 1,000
• Processing: 6-18 months (considerable backlog)

Permanent Residency — Accelerated

• Requirement: Own property valued at BSD 1,500,000+ (USD 1,500,000)
• Duration: Permanent
• Rights: Same as standard PR, but applications are given expedited processing
• Cost: Application fee plus professional fees
• Processing: 3-6 months (expedited)

Economic Permanent Residence Card

• Requirement: Investment of BSD 500,000+ in a Bahamian business or property
• Duration: Permanent
• Rights: May include limited work rights depending on the investment type
• Processing: 6-12 months

Real Estate Market

Nassau and New Providence

• Luxury homes: USD 2M-20M+ (Lyford Cay, Old Fort Bay, Albany)
• Mid-range homes: USD 500,000-2M
• Condominiums: USD 300,000-1.5M
• Rental yields: 3-5% on residential, higher on short-term vacation rentals

Paradise Island

• Premium location with resort-adjacent properties
• Pricing: USD 500,000-5M+
• Limited inventory drives premium pricing

Exumas, Harbour Island, Eleuthera

• Island lifestyle with lower density
• Pricing: USD 300,000-10M+ depending on location and waterfront access
• More remote: Limited infrastructure outside Nassau

Property Transaction Costs

• Stamp duty: 2.5% (buyer) on first USD 100,000; 10% on excess for properties over USD 100,000 (rates have been adjusted periodically)
• Legal fees: 1-2.5% of purchase price
• Real estate commission: 6% (typically paid by seller)
• VAT: 10% on commercial property transactions

Banking

The Bahamas has a well-developed banking sector:

• Major banks: Scotiabank, RBC Royal Bank, Citibank (private banking), Deltec Bank
• Private banking: Available for UHNW clients with minimums of USD 1M+
• Account opening: Requires proof of identity, source of funds, and reference letters
• CRS compliance: The Bahamas participates in the Common Reporting Standard

The banking sector has consolidated significantly since the Bahamas was placed on the FATF grey list (removed in December 2023). Compliance standards are now rigorous.

Cost of Living

The Bahamas is expensive — one of the most costly Caribbean jurisdictions:

Item	Monthly Cost (Nassau)
Housing (3-bed, good area)	USD 3,000-8,000
Utilities (electricity is very expensive)	USD 500-1,500
Groceries (mostly imported)	USD 800-1,500
Dining out	USD 500-1,500
Healthcare (private)	USD 500-1,000
Transport	USD 300-600
Total	USD 5,600-14,100

Electricity costs are notably high (USD 0.30-0.45/kWh) due to reliance on imported diesel generation.

Proximity to the United States

The Bahamas' location — just 50 miles from Florida — is a major advantage:

• Flights: 45 minutes from Nassau to Miami; multiple daily flights
• Time zone: Eastern Time (same as New York and Miami)
• US banking access: Easy to maintain US bank accounts and investment accounts
• Healthcare: Access to US healthcare facilities (Miami) for complex procedures

For US citizens and residents, the Bahamas offers a tax-efficient offshore base with easy access to the mainland. However, US citizens remain subject to US worldwide taxation regardless of Bahamas residency.

Comparison with Cayman Islands

Feature	Bahamas	Cayman Islands
Income tax	0%	0%
Capital gains tax	0%	0%
PR threshold	USD 500,000	KYD 2M (~USD 2.4M)
Cost of living	High	Very High
Distance to Miami	50 miles	460 miles
Population	~400,000	~80,000
Banking sector	Large	Larger (financial centre)
FATF status	Clean (2023)	Clean

Key Takeaways

• The Bahamas offers a constitutionally embedded zero direct tax environment — no income tax, capital gains tax, inheritance tax, or wealth tax
• Permanent residency requires property ownership of USD 500,000+ (standard) or USD 1,500,000+ (accelerated processing)
• The zero-tax benefit is genuine and long-established, but the cost of living is high — budget USD 5,600-14,100/month for Nassau
• Proximity to the US (45-minute flight from Miami) and Eastern Time zone alignment make it practical for US-connected individuals
• The real estate market offers genuine lifestyle value in a stable, English-speaking environment
• US citizens do not benefit from the zero-tax environment personally (worldwide US taxation applies) but can benefit through corporate and trust structures
• Banking is well-developed and compliant, with rigorous CRS reporting — the Bahamas is not a secrecy jurisdiction