January 2019 | By

Foreign Direct Investment in the Real Estate Market

The Bahamas thrives as a stable economy that is supported by a strong legal system, sound monetary and fiscal policies, a skilled professional workforce and sovereign governance. As a developing nation, foreign direct investment (FDI) remains one of the key catalysts to the growth and sustainability of the Bahamian economy.

The Bahamas National Investment Policy seeks to boost the economy through investments and provide favorable returns for investors.  It encourages FDI in key areas in the real estate market, including

  • Touristic Resorts
  • Upscale condominiums, timeshares and second-home development
  • Marinas

The World Investment Report 2018 refers to The Bahamas as a leading destination for FDI in small island developing states. The impact of FDI in the real estate market could be seen in developments such as Albany, Atlantis, Baha Mar, Harborside Resort at Atlantis, Ocean Club Estates, Ocean Club Residences and Marina, One Cable Beach, The Pointe and the future completion of Margaritaville Beach Resort and Marina, to name a few.

The development of luxury resort communities and condominiums and the acquisition of private islands and cays have made The Bahamas an attractive place to invest in the second home market. Along with minimal property taxes, foreign investors are eligible for:

  • Permanent residency upon obtaining over $500,000 in real estate investments;
  • Fast-tracked permanent residency applications for investments at or above $1.5 million; and
  • Limited restrictions on foreign ownership that includes being offered tax concessions.

Key pieces of legislation that benefit foreign investors in the real estate market are:

  • The Hotels Encouragement Act provides for the exemption of customs duties with respect to materials necessary for the construction, furnishing and completion of new hotels. Furthermore, investors are exempted from the payment of real property taxes for a period of 10-20 years.  No taxes will be levied against earnings for a period of 20 years for new or existing hotels. A hotel must not have less than 10 rooms in New Providence and at least 4 rooms in the Family Islands.


  • The Family Islands Development Encouragement Act allows exemptions from customs duty and excise tax on building materials and machinery for land clearing on specified Family Islands.


  • The City of Nassau Revitalization Act encourages the revival of the City of Nassau with respect to the construction, renovation and repair of residential and commercial buildings by exempting customs duty for building materials. The Act further encourages exemption of real property taxes.

The Bahamas Investment Authority (BIA) regulates FDI. It is important that foreign investors seeking to acquire property obtain the advice of local counsel and provide all required documents for a project proposal to be submitted to the BIA. Legal counsel will also assist with obtaining regulatory approvals and permanent residency for the investor.

There are vast benefits to FDI in the real estate market and foreigners are encouraged to invest in the developing islands of The Bahamas.




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