What do you get when you mix a tax haven with a tropical haven? The Bahamas.
With 700 islands, award-winning beaches, and almost no taxes, the Bahamas offers a life that is a dream come true for many.
Although natural beauty is a huge factor driving millions of excited tourists to the shores of the Bahamas each year, the country is also world-renowned for one other specialty – financial services.
Tourism is the largest industry in the Bahamas, followed by financial services and the country’s Gross National Product (GNP) is one of the highest in the region.
Also, did you know that the Bahamas was a former British colony? Even now, the Bahamas has a British monarch as the head of state, but that may change soon.
On September 15, 2022, following the death of Queen Elizabeth, the Bahamian Prime Minister expressed his will to hold a referendum on whether the Bahamas should become a Republic by removing King Charles as the Head of State.
Most tourists visiting the Bahamas each year are Americans. Major US cities like New York and Miami are only a flight (up to 3 hours) away from the tropical haven, making it one of the most connected and accessible countries for US citizens where they can lie in a hammock, enjoy the clear blue waters, and forget their woes.
After all, who wouldn’t want to be a part of a tax-free country that protects their assets while also giving them a chance to explore hundreds of islands, sandy beaches, and a vibrant culture full of dancing and music?
Does the idea of living in the Bahamas sound attractive to you by the minute? This article will discuss establishing a temporary or permanent residency in the Bahamas, but first, let’s go over some of the most significant benefits of a Bahamian residency.
Benefits of Living in the Bahamas
Live a Tax-Free Life
The Bahamas may be a tropical paradise, but that alone has never been enough to attract foreign investors and entrepreneurs. The main allure of the Bahamas lies in its tax-free regime.
Ready to know all the taxes you don’t have to pay in the Bahamas? Here it is – no personal income tax, corporate income tax, capital gains tax, sales tax, withholding tax, gift or inheritance tax, or other probate fees. They don’t call it a tax haven for no reason.
The Bahamian government earns revenue through indirect taxes like VAT, stamp duty, real estate tax, customs duty, and excise duty.
In some countries, tax residency comes with a hefty bill and has to be avoided at all costs, but in the Bahamas, thanks to the country’s tax-free regime, you don’t have to fret about it. You become a tax resident by spending more than 183 days a year in the Bahamas.
Easy to Adapt
The official language spoken in the Bahamas is English, and the currency is the Bahamian dollar (pegged 1:1 with USD), making the transition very easy for English-speaking foreign investors, entrepreneurs, and retirees looking to live there.
Moreover, the country and its people are very open to foreigners. Still, if you miss your home, you can readily catch a flight to major cities like New York, Dallas, etc., that’ll take you to your home country within a few hours.
According to the Nomad Passport Index, Bahamian citizens can enjoy visa-free travel to 142 countries, including China, Japan, Singapore, etc.
Since the Bahamas is a part of the Commonwealth of Nations, Bahamian citizens can stay visa-free in the UK for 180 days and can travel to the US without a US visa through Nassau International Airport or Freeport. Moreover, the citizens of the Bahamas only require an electronic permit while traveling to Canada.
With perks like these, on top of a tax-free regime, it’s no wonder why many people want to obtain Bahamian citizenship.
How to Establish Residency in the Bahamas
The Bahamian government issues residence permits allowing you to enter and stay in the country for different durations. One is the Bahamas residency by investment program, the latest addition to the Bahamian Immigration Act.
Below, we’ll discuss three of the most popular residence permits issued by the Bahamian government that allow you to stay in the country for up to one year or more.
Annual Permit (Permit to Reside)
An annual permit is a one-year renewable residence permit issued to foreigners who want to stay long-term in the country without working.
Since an annual permit holder cannot work in the country, this permit option is popular among the family members (spouses and dependants) of foreigners with work obligations in the Bahamas. You must submit a $200 non-refundable processing fee to apply for the permit.
The Bahamian Department of Immigration processes and issues the annual permits.
Homeowner’s ID Card
As the name indicates, the Homeowner’s ID Card is given to a foreigner who owns a home (residential real estate) in the Bahamas. The card can be renewed annually, and the card holders can enter and stay in the country for up to one year. You must submit a $200 non-refundable processing fee to apply for the Homeowner’s permit.
Unlike many other Caribbean countries, foreigners can buy real estate in the Bahamas without a license or government approval unless they plan to rent it out, develop it commercially, or purchase over two acres of land.
Certificate of Permanent Residence
According to the official site of the Bahamian Department of Immigration, the certificate of permanent residence will be issued to foreigners for a lifetime unless revoked. It will allow them to live and work in the country without a work permit. Moreover, residents must live ninety days per year in the country to maintain permanent residency status.
The permanent residence permit will be issued to foreigners willing to invest a considerable amount into the country, making it the first Bahamas residency by investment program.
Below, we’ll discuss the program’s investment amount and other details.
Bahamas Residency By Investment Program
Starting from July 2021, a new clause in the Bahamian Immigration Act allows foreigners to apply for permanent residency by investment in the Bahamas. Before this addition to the law, there was no direct path to permanent residence in the country, so this new development has come as a pleasant surprise for wealthy foreigners looking to plant flags in this beautiful tropical haven.
Let’s see what the Bahamas permanent residency by investment program is about.
How to Get the Bahamas Residency by Investment
The Bahamas Permanent Residency program targets wealthy foreigners willing to invest considerable capital in the country in exchange for permanent residency.
This, in turn, offers many perks ranging from a tropical base to a tax-free lifestyle.
If you want to acquire the Bahamas residency by investment, you need to keep the following things in mind:
Neither the law nor the official site of the Bahamian Department of Immigration mentions a precise minimum investment amount for the permanent residency program. However, the official site states that a residential property valuing BSD 750,000 or more will get your application a speedy consideration.
In practice, if your investment in the Bahamian residential property is valued at or over $1.5 million USD or more, a response from the Immigration Department is guaranteed within twenty-one days of submission of a complete application.
Your application must accompany proof of real estate purchase and real estate tax payment.
Use of Property
You can rent out the property you purchased for residential purposes and use it for income generation. This does not affect the maintenance of the residence permit.
Holding Period for Investment
The holding period for investments under this program is ten years.Moreover, the permanent residence permit is issued for life and does not need to be renewed. Still, the permit holder must report to the Bahamian Migration Service every ten years to prove that the information on the residence application is still accurate.
All your family members who permanently live with you and are financially dependent on you can get permanent residence permits (along with you).
Minimum Stay Requirements
To maintain your permanent residency status, you must live ninety days per year in the Bahamas.
Time to Obtain Permanent Residence Permit
You can expect to receive your permanent residence permit up to three months from your application to the Bahamas Migration Service.
Permanent Residency Revocation
The Bahamas may issue permanent residency for life, but that doesn’t mean the state can’t revoke it. Your permanent residence may be revoked if you fail to hold the residential property for ten years, live outside the Bahamas for three or more years, or become imprisoned in another country for a year or more. Moreover, your family members may lose residence status if they are no longer financially dependent on you.
Path to Citizenship
After ten years of legally residing in the Bahamas as a permanent resident, you may apply for Bahamian citizenship. Of those ten years, you must have lived at least six of those years in the country. The Bahamas does not allow dual citizenship. That’s why you must renounce your previous nationality before becoming a Bahamian citizen. Documents to obtain Bahamian citizenship include proof of net worth, birth certificate, marriage certificate, etc.
Live in a Tropical Tax Haven
Some countries are tropical havens, while some may be tax havens. The Bahamas is a tropical tax haven offering all the serenity and beauty of a tropical paradise and the safety and incentives of a tax haven. The country’s stable government, regulatory structure, and friendly tax policies have attracted hundreds of foreign banks, investors, and financial institutions to its shores.
The Bahamas permanent residency by investment program is an excellent option for foreigners looking to enjoy the country’s beauty and tax-free regime. However, if you want something more than permanent residency, like citizenship by investment, you’ll find plenty in the neighboring regions of the Bahamas.
Most prominent Caribbean Citizenship by Investment programs include the Dominica Citizenship by Investment program, St. Kitts and Nevis Citizenship by Investment program, etc.