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How to Start a Business in The Bahamas

If you've ever tried to figure out how to register a business in The Bahamas, you know the information is out there, but it's scattered across government portals, PDF forms, and word of mouth. This guide attempts to pull it all together: trade name registration, business licence, NIB, VAT, and annual compliance. Every claim is sourced so you can verify it yourself.

Disclaimer

This guide is not official government guidance and does not replace professional legal or accounting advice. Laws and procedures change. Always verify current requirements with the Department of Inland Revenue. Last updated: March 2026.

Part 1: Getting Started

Step 1: Choose Your Business Structure

Before you register anything, you need to decide how your business will be structured. There are three main options in The Bahamas:

Sole proprietorship. This is the simplest structure and the most common for small businesses. You and the business are legally the same thing. If the business owes money, you owe money. If someone sues the business, they're suing you. The upside? Minimal paperwork, no incorporation fees, and you keep all the profits. Most Bahamian food vendors, barbers, freelancers, and small shop owners operate as sole proprietors.

Partnership. Two or more people running a business together. You share the work, the profits, and the liability. If your partner makes a bad decision that costs money, you're on the hook too. A written partnership agreement isn't legally required, but skipping one is asking for trouble.

Limited company. A separate legal entity from you. It can own property, enter contracts, and be sued on its own. Your personal assets are protected if the company runs into problems (with some exceptions). The tradeoff is more paperwork and higher costs. You'll need to incorporate through the Registrar General's Department, file annual returns, and maintain proper corporate records.

If you're just starting out and working by yourself, sole proprietorship is probably the right fit. You can always change your structure later as your business grows. The DIR publishes a full list of required documents by business type (PDF) if you want to see exactly what's needed for your category.

Step 2: Register Your Trade Name

"But I already sell things without a licence..."

You might. A lot of people do. But here's the thing: operating without a business licence in The Bahamas carries a $5,000 fine plus $100 per day for every day you continue operating. That's the law. Whether it gets enforced on every roadside vendor is a different question, but it's a risk you're choosing to take.

The first step to going legal is registering your trade name (your business name). Here's how:

  1. Go directly to the Trade Name Application on the government portal.
  2. Fill out the form and submit. There's a $25 fee, which gets assessed when your final licence application is processed.
  3. Wait about 24 hours for an email confirming your trade name has been approved, along with your reference number. You'll need that reference number for the next steps.

Important: If you don't apply for your business licence within 90 days of trade name approval, your name gets removed from the registry and you have to start over. Don't sit on it.

This step applies to sole proprietors and partnerships. If you registered a limited company through the Registrar General's Department, your company name was approved during incorporation, so you skip this.

[Source: Department of Inland Revenue, First-Time Application Guide]

Step 3: Register with NIB

Every employer in The Bahamas must register with the National Insurance Board. Self-employed persons must register themselves too. You'll need your NIB R1 Form completed for the agency approval process in Step 4, so do this first.

Here's what to do:

  1. Download the R1 Registration Form (PDF) from the NIB website. Fill it out before you go in.
  2. Visit your nearest NIB office with the completed form. Let them know you're registering a new business.
  3. They'll assign you an agent to walk you through the process. The whole thing typically takes under two hours, depending on how busy the office is.

There's no online submission for the R1 form at this time. You can also email the completed form to registration@nib-bahamas.com, but visiting in person tends to get things sorted faster.

If you also need to set up the Employer Self-Service portal for managing contributions online, grab the R1B Enrollment Form and email it to ess@nib-bahamas.com.

If you want to understand what NIB actually gives you back at retirement, the NIB retirement guide breaks down the numbers. You can estimate your future benefit at nibcalc.saltnfork.com.

Step 4: Get Your Agency Approvals

Before your licence can be issued, you need clearance from government agencies through the Consolidated Agency Application. Some are required for every business. Others depend on what your business actually does.

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Required for all businesses:

Depends on your business function:

You can also check the DIR's other agency requirements page for a full list of what each business type needs.

What nobody tells you

If you're running a business from home, you still need Physical Planning approval confirming your residential zone allows commercial activity. Industrial businesses cannot operate from homes. Many people skip this step and find out when their licence application gets rejected. Check your zoning before you invest time and money into the rest of the process.

[Source: Department of Inland Revenue, First-Time Application Guide]

Step 5: Apply for Your Business Licence

Once your trade name is approved, your business has its NIB number, and your agency clearances are in order (especially Physical Planning), you can apply for the licence itself. Everything happens through the Online Tax Administration System (OTAS) at vat.revenue.gov.bs.

Before you start: have your personal NIB number and your NIB business registration information (from Step 3) ready. You'll need both during the application.

If you're creating a new account

  1. Go to vat.revenue.gov.bs and click "Create Account."
  2. Complete the registration form, accept the terms, and submit.
  3. Check your email and activate your account.
  4. Log in with the username and password you created.
  5. Click "Start Registration."
  6. Select "Register a Person" and click "Start."
  7. Choose "Sole Trader" (or the appropriate business type) and click "Continue."
  8. Work through the eligibility form. Select "Continue Registration" then "Continue Application."
  9. Complete the form details and click "Save and Continue."
  10. Upload your supporting documents (proof of citizenship, agency approvals, any other documents required for your business type). Click "Save and Continue."
  11. Read and agree to the Declaration, then click "Submit Request."
What nobody tells you

The portal experience can be different depending on whether you're a first-time user or you already have an existing OTAS account (for example, from a previous business or VAT registration). The steps above are for brand new accounts. If you already have an account and can't find where to apply for a new licence, try going to Services > Register New Tax Type and selecting "Business Licence Annual." If that doesn't work, call the DIR helpline at 242-225-7280. The portal isn't always intuitive, and you're not the only one who's gotten stuck.

After you submit: processing takes about 7 working days. The Department will contact you through your online account if they need anything else, so check your messages and email regularly. Once approved, make payment online or at any Royal Bank of Canada branch (allow 2 to 3 business days for RBC payments). Your approved business licence will be sent as a PDF to your account and email.

New businesses pay an initial tax of $100. This excludes temporary, occasional, and non-resident businesses, which have their own fee schedules.

If you're on a Family Island, work with your local administrator to submit your application. Abaco, Exuma, and Grand Bahama residents can apply online. If you operate in multiple locations across different islands, you need a separate licence for each island.

Contact: Department of Inland Revenue, 242-225-7280 (toll-free) or taxinquiries@bahamas.gov.bs

The DIR also has a video walkthrough on YouTube showing the new account process, and their How-To Videos page may have additional guides.

[Source: Department of Inland Revenue, First-Time Application Guide]

You're in business

Once you have your business licence, you're legally operating. Steps 6 and 7 below apply depending on your situation. Most small businesses starting out won't need VAT registration right away, and a dedicated business bank account, while strongly recommended, isn't a legal requirement.

Step 6: Register for VAT (If Applicable)

VAT registration is required if your turnover exceeds $100,000 in any 12-month period. The current VAT rate is 10%.

If you cross that threshold, you have 14 days to register or face penalties. Register through the same online portal: vat.revenue.gov.bs.

Once registered, you charge VAT on your sales and can claim back VAT you paid on business purchases. That's the basic idea. But here's a detail people miss: if you don't have a copy of an invoice showing the VAT amount, you cannot recover VAT on those costs. Keep copies of every sales invoice, receipt, and purchase invoice. This is not optional.

[Source: Department of Inland Revenue VAT FAQs]

Step 7: Open a Business Bank Account

You'd think this part would be straightforward. You have your licence, your NIB registration, your documents in order. You walk into the bank and open an account. Simple.

It's not.

Opening a business bank account in The Bahamas can be genuinely difficult. One prominent accountant writing in the Nassau Guardian called it "a veritable nightmare" with "disproportionate delays." Even existing customers sometimes have to start from scratch when they want to add a business account. This is a well-known frustration across the country.

Requirements vary by bank, so call ahead or check their website before you visit. At minimum, you'll likely need your valid ID, your business licence, and proof of address. Some banks may also ask for NIB registration, a reference letter, or additional documentation. Bring everything you have. The more you walk in with, the fewer trips you'll make.

What nobody tells you

Be prepared for this to take multiple visits. Don't let that discourage you, but don't expect it to be a one-day task either.

Part 2: Keeping It Legal

Getting your business set up is the hard part. But staying legal takes ongoing work. Here's what you need to do every year to keep things in order.

Annual Business Licence Renewal

Your licence expires on December 31 every year, regardless of when you first obtained it. Here are the deadlines:

And here's what happens if you miss them:

If you close your business, you must notify the Department of Inland Revenue within 14 days or by December 31 of that year. Fail to do so and you're looking at a $100 penalty.

What nobody tells you

In January 2024, the Department of Inland Revenue's online system went down for days during the renewal deadline, leaving business owners worried about late fees. The system works most of the time, but don't wait until January 31 to file. Get it done early in January. You'll sleep better.

[Source: Department of Inland Revenue, Fees, Fines and Penalties]

Business Licence Tax Rates

The Bahamas doesn't have income tax or corporate tax. Your business licence tax is essentially your annual fee for operating legally. The rates are based on your annual turnover (total revenue, not profit):

Annual Turnover Tax Rate
Under $50,000 $100 flat fee
$50,001 to $500,000 0.50% of turnover
$500,001 to $5,000,000 0.75% of turnover
Over $5,000,000 1.25% of turnover

These rates apply to regular (non-IBC) Bahamian businesses. Financial institutions and International Business Companies have different schedules.

Here's a quick example. If your business made $200,000 last year, your business licence tax is $200,000 x 0.50% = $1,000. That's it. No income tax on top of it. No corporate tax. This is your total annual government cost for operating legally.

[Source: Department of Inland Revenue, Business Licence Act 2023]

Financial Reporting Requirements

The Business Licence Act 2023 introduced tiered financial reporting based on your turnover. The bigger your business, the more detailed your financial records need to be:

Annual Turnover What You Need
Under $100,000 Exempt from business licence tax (still need the licence)
$100,000 to $250,000 Management accounts
$250,000 to $500,000 Accounting certification by an independent accountant
$500,000 to $2.5 million Compilation report by an independent accountant
$2.5 million to $5 million Review statement by an independent accountant
Over $5 million Full audited financial statements (IFRS)
What nobody tells you

When these requirements were first announced, the Bahamas Chamber of Commerce called the timeline "too aggressive." Three-quarters of large businesses needed extensions. Many Bahamian companies had never maintained detailed financial records before this law. If you're just starting out, get your record-keeping right from day one. It's much easier to maintain records as you go than to reconstruct them later.

[Source: Business Licence Act 2023, Chambers & Partners]

VAT Filing

If you're registered for VAT, you file returns quarterly (or monthly if your turnover exceeds $5 million). Returns are due within 21 days of the end of each tax period.

File through vat.revenue.gov.bs. You can request an extension to file, but there is no extension to pay. The money is due whether or not you've finished your paperwork.

Keep all VAT records for at least 5 years, and they must be in English.

NIB Contributions

As an employer, you deduct employee contributions from their pay and add the employer portion on top. Self-employed persons pay both portions themselves. These contributions are ongoing for as long as you're operating.

If you want to see what those contributions actually add up to at retirement, head to nibcalc.saltnfork.com. It takes about two minutes. For a deeper look at how self-employed NIB rates work, the freelance pricing guide covers the numbers.

Record-Keeping Requirements

The Business Licence Act 2023, Section 27, requires every licensee to maintain up-to-date accounting records. Your records must include:

For VAT purposes, keep copies of all sales invoices, debit and credit notes, receipts, and purchase invoices for 5 years. If you don't hold a copy showing the VAT amount, you cannot recover VAT on those costs. There's no exception to this rule.

Tracking your business finances doesn't need to be complicated. If you're already using something like the 3 Bucket Budget app at budget.saltnfork.com to manage personal spending, consider keeping your business transactions separate and organized from day one.

You can read the full text of the Business Licence Act 2023 and the Value Added Tax Act on Law Search.

Tools and Resources

Salt n' Fork Tools for Business Owners

Government Contacts and Links

Sources

This guide is for educational purposes only and does not constitute professional legal or accounting advice. Laws and procedures change. Always verify current requirements with the Department of Inland Revenue before making business decisions.