Bahamas vs Cayman Islands taxes (2026): income, corporate and VAT

Bahamas vs Cayman Islands tax rates at a glance

Tax	🇧🇸 Bahamas	🇰🇾 Cayman Islands
Income tax	Personal income tax: 0% Salary tax: 0% Self-employment tax: 0% Foreign income tax: 0% Dividend income tax: 0% Interest income tax: 0%	Personal income tax: 0% Foreign income tax: 0% Salary tax: 0% Employee pension: 5% Employer pension: 5%
Corporate tax	Corporate income tax: 0% DMTT for large MNEs: 15% Oil and gas tax: 0% Withholding tax: 0% Dividend remittance stamp duty: 5% over BSD 500,000	Corporate profits tax: 0% Standard company tax: 0% Dividend withholding tax: 0% Foreign company tax: 0%
Capital gains tax	Capital gains tax: 0% Crypto gains tax: 0% Share gains tax: 0% Real estate gains: 0%	Capital gains tax: 0% Crypto capital gains tax: 0% Shares and securities gains: 0% Real estate gains: 0%
Dividend tax	Dividend withholding tax: 0% Domestic dividend tax: 0% Foreign dividend tax: 0% Dividend remittance stamp duty: 5% over BSD 500,000	Dividend withholding tax: 0% Domestic dividend tax: 0% Foreign dividend tax: 0%
Wealth tax	Net wealth tax: 0% Net worth tax: 0% Annual asset tax: 0% Wealth return: 0%	Net wealth tax: 0% Net worth tax: 0% Annual asset tax: 0%
Inheritance / estate tax	Inheritance tax: 0% Estate tax: 0% Gift tax: 0% Probate tax: 0%	Inheritance tax: 0% Estate tax: 0% Gift tax: 0% Probate tax: 0%
VAT / GST / sales tax	VAT: 10%	VAT: 0%
VAT / GST	10% VAT	0%
General corporate income tax	0%	0%

Who wins on each tax

Personal income taxTie

Both jurisdictions have 0% personal income tax.

Corporate taxTie

Neither has a general corporate income tax, though fees and licence costs still matter.

Capital gains taxTie

Both generally have 0% capital gains tax.

VAT / sales taxCayman Islands

Cayman has no VAT or GST; the Bahamas applies VAT.

Fund and holding structuresCayman Islands

Cayman is the more established tax-neutral fund and holding-company jurisdiction.

The verdict

Both jurisdictions are attractive because they have no personal income tax, no general capital gains tax, no inheritance tax and no net wealth tax. For a passive investor or retiree, the headline personal-tax answer is close.

Cayman usually wins for pure tax neutrality. It has no corporate income tax and no VAT, although import duties, stamp duty, work-permit fees and annual government fees can still be material. The Bahamas also has no corporate income tax, but VAT and business licence rules make the operating picture less clean.

Choose Cayman for fund, holding-company and zero-tax corporate neutrality. Choose the Bahamas when lifestyle, proximity, real estate or a specific residence route matters more than the cleanest offshore tax profile.

How to read this comparison

The Bahamas and Cayman Islands both sell a low-tax Caribbean outcome, but Cayman is usually the cleaner tax-neutral platform. The Bahamas can still be attractive, especially when lifestyle and residence matter more than pure corporate neutrality.

Which one fits you

🇧🇸 Choose Bahamas if you're a…

Lifestyle-led residents who want a Caribbean base
Real estate buyers comparing residence options
Founders with a Bahamas operating reason

🇰🇾 Choose Cayman Islands if you're a…

Fund managers and holding companies
Investors needing a tax-neutral corporate platform
People prioritising no VAT or GST

Frequently asked questions

Is the Bahamas or Cayman Islands better for tax?

Cayman is usually cleaner for tax-neutral companies, funds and investors because it has no income tax, no corporate tax and no VAT. The Bahamas is still low-tax, but VAT and business licence costs can matter.

Do the Cayman Islands have income tax?

No. Cayman does not levy personal income tax, corporate income tax, capital gains tax, withholding tax or VAT/GST.

Does the Bahamas have corporate tax?

The Bahamas does not have a general corporate income tax, but businesses may face VAT, business licence fees, real property tax, stamp duty and import duties.