The Bahamas remains a leading international financial services hub and jurisdiction of choice for international wealth planning structures. Overall, according to the Central Bank of The Bahamas Regulatory and Supervisory Update, 4 February 2026, the domestic economy maintained its positive growth trajectory through 2025, driven primarily by the tourism sector. Against this background, a number of global downside risks continue to shape the outlook; including higher tariffs on international trade, uncertainty surrounding global trade policy, elevated geopolitical tensions, global oil price volatility and the existential threat of climate change.
In The Bahamas, several key themes have dominated developments in the legal and regulatory framework for financial services so far in 2026. Among these are the continued refinement of the regulatory framework in keeping with international best practices, the expansion of the digital assets legislative framework to provide for decentralised autonomous organisations, commonly known as DAOs and, central to this article, the enhancement of the financial services product toolkit through the introduction of the usufruct.
Introduction of a new usufruct product
Over the last three decades, The Bahamas has been at the forefront of financial services product innovation, developing new products designed to meet the evolving global environment and client needs. Examples include, smart funds (introduced in 2004), Bahamian foundations (introduced in 2004), Bahamian investment condominiums or “ICONS” (introduced in 2014) and the Sand Dollar (launched in 2020) which was the first digital currency issued by a central bank.
In 2026, the Usufruct Interest Act, 2026 (UA) introduced the concept of the usufruct, a civil law institution established in continental European and Latin American legal systems, including Brazil, into Bahamian law. The UA allows for the creation, registration and termination of a usufruct.
A usufruct is a right in rem (ie, a right that can be enforceable against everyone, not just a specific individual), of limited duration, that allows the usufructuary to use, benefit from and/or hold governing control of property, while the legal owner retains the legal ownership of the property. The usufruct therefore involves the separation of the legal ownership of an asset (which is retained by the owner), from the right to use and enjoy that asset and to collect its benefits (referred to in some civil law jurisdictions as “fruits”) which vest in the usufructuary. The usufructuary has the legal right to use and benefit from the legal owner’s property and has a duty of care to preserve the property.
A usufruct may be established in writing by an agreement or by will or trust disposition, in the case of a natural person for up to 99 years or in the case of a legal person for up to 30 years, in respect of a wide range of assets located in The Bahamas or to which Bahamian law is applicable; including, among others, movable or immovable assets, debts, shares, receivables and digital assets.
Registration of a usufruct is optional. There is no legal requirement for public registration of the agreement or will by which the usufruct is created. Where a usufruct is created over shares in a Bahamian incorporated or registered company, the company may apply to the Registrar of Companies in the prescribed manner, and pay the prescribed fee to register the usufruct. Where the usufruct is created over any other asset, the application must be made to the Registrar of Records. Registration confers the added benefit of making the usufruct enforceable against third parties from the date of registration, subject to any prior registered security interests or encumbrances, unless otherwise provided by law. It should be noted that while the Regulations under the UA have not been promulgated, as a part of the application for registration, the nature of the usufruct interest will be required to be disclosed.
The UA provides for the register of usufructs that will be maintained by the Registrar of Companies and the Registrar of Records in respect of all usufructs submitted for registration. The following details will be included in the register of usufructs in respect of all registered usufructs:
- the name of the legal owner;
- the name of the usufructuary;
- the nature of the corporate interest;
- the duration of the usufruct; and
- any economic, voting or other rights affected.
While the register is publicly available for inspection for the purpose of verifying registration, detailed economic arrangements regarding the usufruct will not be available for inspection.
The usufruct structure is a useful option for clients who wish to incorporate the separation of use and ownership rights into their governance or intergenerational wealth planning strategies, or who reside in jurisdictions where the concept is more widely recognised and understood. While a usufruct arrangement shares certain objectives with a trust, particularly in facilitating succession planning and the transfer of wealth across generations, it is not intended to replace a trust structure. Rather, it provides an additional tool that may be better suited to the legal, cultural, or practical objectives of certain clients.
One of the most common use cases in Brazil, for example, is for parents to transfer legal ownership of property to their children during their lifetime. This achieves certain financial and estate planning objectives, while enabling the parents to retain the use, enjoyment and control of the property for the remainder of their lives.
Conclusion
The legislative developments in the financial services sector in 2026 illustrate the continued evolution of the Bahamian regulatory framework to include new products to address evolving client needs, while reinforcing the overall commitment to compliance with global standards.
Excerpt from Chambers Banking & Finance Global Guide, 2026
AUTHORS
Christel Sands-Feaste and Julia Koga da Silva
The information above 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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