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The Bahamas is an island country in the Caribbean with an estimated population of over 400,000 people as of 2024. While the Bahamas is known as a hotspot for tourism and hospitality, its proximity to the US makes it attractive to foreign investors.
The Bahamas has business-friendly regulations, such as little to no income tax requirements for companies. In addition, the well-structured legal and financial frameworks benefit foreign companies doing business in the country.
Here’s a detailed guide to doing business in the Bahamas in 2025, including employment regulations that you need to comply with as an employer.
As a business owner, there are several pathways through which you can explore the market in the Bahamas. Choosing the right path is important to ensure smooth hiring and compliance with the country’s labour laws. Here’s a breakdown of the options available to you:
You can access the Bahamas market by registering a legal entity through which you can conduct business in the country. The most viable company type that you can adopt as a foreign investor is an International Business Company (IBC).
Other common company types in the country are Limited Liability Companies (LLCs) and Exempted Limited Partnerships (ELPs).
An alternative to registering a company in the Bahamas is to set up a branch of your company, which is already registered in a foreign country. While opening a branch tends to be a faster process than registering a legal entity, your branch office will not have as much flexibility and legal protection.
An Employer of Record (EOR) acts as a legal employer for your employees in the Bahamas, handling processes like hiring, onboarding, payroll, and benefits on your behalf. The advantages of using an EOR include speed, convenience, and compliance for businesses exploring the Bahamas.
A Professional Employer Organisation (PEO) is similar to an EOR, but the difference is that, with a PEO, you still retain ownership and legal responsibility for your employees. A PEO performs HR processes like payroll, benefits administration, and taxation.
The standards of employment and the relations between employers and employees in the Bahamas are dictated by the Bahamas Employment Act. The purpose of the Employment Act is to regulate the terms of employment that workers and employers have to comply with across the country.
The main aspects of employment in the Bahamas that are covered by the act include standard hours of work, mandatory benefits such as sick and vacation leave, and age limits for employment.
The headings below explain some important terms that you should know as an employer in the Bahamas.
Like in many countries, the maximum duration of normal working hours for employees is 8 hours a day and 40 hours a week. As such, working hours are typically split into 5 days of work in a week (Monday to Friday), lasting 8 hours each.
The law dictates that employers must offer employees at least 48 hours of rest within a 7-day period. The mandatory 48 hours of rest must contain at least 24 consecutive hours, called a day off.
The purpose of a working hours limit in the Bahamas is to prevent employees from overworking, as this can affect their quality of life.
According to the Standard Working Hours section in the Bahamas Employment Act, work done outside the 8 hours per day or 40 hours per week qualifies for overtime pay.
To account for the excess working hours, overtime pay must be double an employee’s normal pay if overtime falls on a public holiday or on the employee’s day off. In any other case of overtime work, the pay must be one-and-a-half times an employee’s normal pay.
Employees in the Bahamas are entitled to several benefits, including;
As of September 24, 2025, the minimum wage in the Bahamas is B$260 per day. The current minimum wage in the Bahamas became effective on January 1, 2023. Before 2023, the country’s minimum wage was B$210 per day. The country’s currency, the Bahamian Dollar, is pegged to the US Dollar.
The Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) is in charge of regulating the minimum wage in the country, depending on economic and financial demands.
The change from B$210 to B$260 in 2023 was the second change in recent years, as the minimum wage went from B$150 to B$210 in 2015. There are considerations for an increase in minimum wage in 2025, so employers can expect to pay employees more in the coming months.
There is no corporate or personal income tax in the Bahamas, and this is one of the company’s biggest selling points for business owners. As an employer, this means that neither your company nor your employees need to pay tax on income earned.
The current value of Value Added Tax (VAT) in the Bahamas is 10%, and this applies to most products purchased in the country.
While the authorities in the Bahamas do not require you or your employees to pay income tax, you do have to make social security contributions.
Social security contributions in the Bahamas are made to the National Insurance Board (NIB) as a percentage of an employee’s wages every month. Employer contributions towards social security are 6.65% while employees contribute 4.65%.
The Bahamas remains a top destination for foreign investment prospects, particularly with the absence of income taxes and proper legal and financial structures.
An Employer of Record (EOR) or a Professional Recruitment Organisation (PEO) enables you to do business in the Bahamas without registering a local entity or opening a branch.
