Bahamas Corporate Tax Guide 2026

Overview — No Corporate Income Tax

The Bahamas is one of the few countries with no corporate income tax. Companies incorporated in the Bahamas are not taxed on their worldwide profits, regardless of where the profits are earned. This applies to both resident companies (incorporated in the Bahamas) and non-resident companies operating through a branch. The absence of CIT makes the Bahamas a premier jurisdiction for holding companies, offshore investment vehicles, and international business operations. The government's revenue from businesses comes primarily through the annual business license fee, which is based on gross turnover (not profit), making it a predictable and simple tax for companies.

Business License Fee — 0.75% to 1.25% of Turnover

The business license fee is the main annual cost for Bahamian companies. It is calculated as a percentage of gross annual turnover (revenue, not profit). The rate depends on the business sector:

• 0.75% — wholesale trade, manufacturing, agriculture, fishing, and construction
• 1.00% — retail trade, professional services, consultancy, and most service industries
• 1.25% — financial services, insurance, banking, and real estate
• BSD 100 flat fee — small businesses with turnover below BSD 100,000
• BSD 200 flat fee — IBCs with no Bahamas-source income (in lieu of turnover-based fee)

The fee is payable annually and is due within 30 days of the company's anniversary of incorporation. There is no fee on capital gains, dividends, or retained earnings. The business license is renewable annually through the Bahamas Investment Authority or the Registrar General's Department.

International Business Company (IBC)

The International Business Company (IBC) is a special corporate structure under the IBC Act, 2000 (as amended). IBCs are designed for non-resident businesses that do not conduct business within the Bahamas. Key features of IBCs include:

• Zero taxation on all income — no CIT, no business license fee on foreign-source income (BSD 200 flat fee)
• No exchange controls — IBCs may hold and transfer any currency freely
• No requirement to file financial statements publicly (confidential filing only)
• Minimum of one director (can be corporate) and one shareholder
• No minimum capital requirement
• Exemption from stamp duty on transfers of shares and assets

IBCs are commonly used for international holding structures, asset protection, investment funds, and intellectual property holding. However, an IBC that conducts business within the Bahamas or earns Bahamas-source income is subject to the standard business license fee.

Regular Companies — Companies Act

Companies incorporated under the Companies Act, 1992 (as amended) are the standard corporate vehicle for businesses operating in the Bahamas. Regular companies are also subject to zero CIT but must pay the business license fee based on turnover. Key features include:

• Minimum of one director and one shareholder (can be non-resident)
• Annual return filing with the Registrar General (includes financial statements)
• Public filing of financial statements for certain company types
• Stamp duty on share transfers (1% typically)
• Subject to exchange control regulations (if resident)

Regular companies are suitable for businesses that have a physical presence in the Bahamas, employ local staff, or generate Bahamas-source revenue.

Transfer Pricing & International Compliance

Although the Bahamas has no CIT, it has committed to international tax transparency standards. The Bahamas is a member of the OECD Inclusive Framework on BEPS and has implemented Country-by-Country (CbC) Reporting for multinational groups with consolidated revenue exceeding EUR 750 million. The Bahamas has also signed the Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of CbC reports. There is no transfer pricing legislation per se (since there is no CIT adjustment needed), but related-party transactions must be properly documented for CbC reporting purposes. The Bahamas has also implemented Economic Substance Requirements for certain types of income (banking, insurance, shipping, fund management, financing, leasing, headquarters, and IP). Entities generating these types of income must demonstrate economic substance in the Bahamas.

FAQs

Is there any corporate income tax in the Bahamas?

No, there is zero corporate income tax on profits. The only annual business cost is the business license fee (0.75–1.25% of turnover) or the flat BSD 100–200 fee for small businesses and IBCs.

Can I incorporate a company in the Bahamas as a non-resident?

Yes, non-residents can incorporate both regular companies and IBCs in the Bahamas. There are no restrictions on foreign ownership. A registered office and agent in the Bahamas are required.

Does the Bahamas have economic substance requirements?

Yes, companies engaged in certain activities (banking, insurance, shipping, fund management, financing, leasing, headquarters, IP) must demonstrate economic substance in the Bahamas, including physical presence, qualified staff, and core income-generating activities conducted locally.

Disclaimer

This guide provides general information about Bahamian corporate tax for the 2026 tax year. Tax laws and business license rates may change. Always consult with a qualified Bahamian corporate advisor or the Ministry of Finance for advice specific to your situation. InvestmentKit does not provide tax advice.