Current Perspective
According to the Central Bank of The Bahamas, Quarterly Economic Review, June 2025, the country’s economic growth showed signs of moderation. While tourism—The Bahamas’ primary economic driver—continued to perform well, its previously strong momentum has eased, particularly in the high-value stopover segment, which faced capacity constraints. Meanwhile, average consumer price inflation trended downward, largely due to reduced cost pressures from imported fuel and other goods and services. Against this background, some of the global downside risks impacting the outlook for the future including, energy prices, public sector debt and borrowing costs, the impact of higher tariffs, elevated geopolitical tensions and the existential threat of climate change, persist. Despite the uncertainty, The Bahamas has continued to reinforce its standing as a leading international financial services jurisdiction through the refinement of the regulatory framework affecting the sector.
In 2025, two major themes have shaped the legal and regulatory landscape for financial services in The Bahamas. First, the overhaul of legislation governing segregated accounts companies has introduced significant reforms aimed at enhancing operational clarity and investor confidence. Second, the modernization of the data protection regulatory framework reflects a broader commitment to aligning with global standards and strengthening safeguards around personal and corporate data. Together, these developments signal a forward-looking approach to financial regulation, reinforcing The Bahamas’ position as a competitive and compliant international financial centre.
Overhaul of the legislation relating to segregated accounts companies
Segregated accounts companies have been a corporate structuring option available in The Bahamas to entities operating in prescribed regulated sectors for over two decades, under the Segregated Accounts Companies Act, 2004 (the “Prior Act”). This enabled certain regulated corporate entities to incorporate as a single legal entity (a segregated accounts company or “SAC”) but establish one or more segregated accounts (referred to in some jurisdictions as segregated cells), where the assets and liabilities of each segregated account are segregated (or ringfenced) from those linked to other segregated accounts, but without each segregated account having separate legal personality. This structuring option has been used extensively in the investment funds sector in The Bahamas to facilitate the pursuit of different investment objectives and strategies, within different segregated accounts of the same investment fund.
The Segregated Accounts Companies Act, 2025 (the “New SAC Act”), an entirely new statute, came into force on 28th August, 2005 and will repeal and replace the Prior Act. While the New SAC Act retains a number of the basic provisions relating to the registration of SACs from the Prior Act, it also introduces a number of exciting features, including:
- Enabling a broader range of regulated entities as well as non-regulated entities to opt for registration or incorporation under the New Act
- Providing for the incorporation of each segregated account within a SAC as a separate legal entity (referred to in the New SAC Act as an ISAC)
- Permitting the merger of an ISAC with another ISAC
- Permitting the merger of an incorporated segregated account of an ISAC with another incorporated segregated account of its ISAC or another ISAC
- Permitting the spin-off of segregated accounts within a SAC by way of demerger into separate legal entities
- Permitting foreign companies to register as a SAC or an ISAC upon continuation into The Bahamas
These amendments will strengthen asset protection characteristics of SACs, introduce many of the same legal restructuring options to SACs that are available to stand alone private investment companies and increase the range of product offerings available to clients seeking wealth planning solutions. The New SAC Act is also another example of policy makers working with the private sector to continue to enhance the regulatory framework in The Bahamas.
Modernization of the data protection regulatory framework in The Bahamas
The current legislative framework relating to data protection in The Bahamas has been in force since 2003. In order to address the significant technological innovations since then, the supersonic speed at which technology continues to evolve, global international standards, the importance of data protection, particularly in the financial services sector, and to modernize the regime overall, this past summer the Data Protection Commissioner circulated a draft new Data Protection Bill, 2025 (the “DPA Bill”) for consultation. This development is welcomed and represents another step towards reinforcing a fundamental element of the financial services sector and heightened concerns regarding cybersecurity. Further details of the DPA Bill will be provided once the consultation period concludes and the DPA Bill is finalized.
Conclusion
These two pieces of legislation demonstrate the ability of The Bahamas to provide robust product solutions to address client needs and expectations, the constantly changing regulatory changes in the jurisdictions where clients are based and The Bahamas’ commitment to adhering to international best practices.
AUTHOR
The information contained in this article is provided for the general interest of our readers but is not intended to constitute legal advice. Clients and the general public are encouraged to seek specific advice on matters of concern. This article can in no way serve as a substitute in such cases.
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