Do I Need a Local Entity to Hire in Bahamas?

In the Bahamas, a "local entity" refers to a recognized business presence that can legally employ individuals; this typically means establishing a subsidiary or branch office. This setup allows your company to be recognized as an employer in the Bahamas, enabling you to manage payroll, tax, and employment obligations effectively.

Without a local entity, you can't typically register as an employer, manage mandatory payroll processes, or comply with local employment laws. An Employer of Record (EOR) can serve as a solution, allowing you to hire without the complexities of establishing a local entity.

What is Required to Employ Someone in Bahamas?

• Local employing entity required to directly employ? Yes (a local entity is needed for direct employment)
• Payroll registration required? Yes (registration with the National Insurance Board is mandatory)
• Withholding/tax remittance required? Yes (employers must withhold income tax and remit to the government)
• Social contributions required? Yes (mandatory contributions to the National Insurance Board apply)
• Local employment agreement required? Yes (written contracts are standard practice)
• Mandatory benefits to budget? Yes (includes vacation pay, sick leave, and health benefits)
• Works council/collective agreements considerations? Usually (specific sectors may have collective agreements)

Best Options If You're Hiring in Bahamas

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but be cautious about misclassification risks.

While you can hire contractors without a local entity, the Bahamas has strict labor laws. If the contractor's work resembles that of an employee, you may face legal challenges.

• Ensure the contractor operates independently and is not integrated into your business.
• Be mindful of how much control you exert over their work.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in the Bahamas, depending on the type of business and necessary registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 1,000–2,500 BSD per month ($1,000–$2,500)
• Payroll provider: Estimated 150–400 BSD per employee per month ($150–$400)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated 500–1,500 BSD per year ($500–$1,500)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 p/month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Bahamas

Hiring in Bahamas can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Bahamas quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.