Usufruct Arrives in The Bahamas: What Changes for Wealth and Succession Planning?
In March 2026, the Parliament of The Bahamas enacted the Usufruct Interest Act, 2026 (Act No. 9 of 2026), which came into force on 1 April 2026, introducing the right of usufruct into its legal system and opening new possibilities for generating and preserving wealth in that jurisdiction. The initiative reflects an institutional effort to attract investors and capital mainly from Latin America and Europe, regions largely governed by civil law systems, in which usufruct is widely known and used.
The innovation also gives The Bahamas a competitive advantage. Usufruct does not exist as a statutory institution in other common law jurisdictions typically chosen for offshore companies and fiduciary structures, such as the BVI and the Cayman Islands. In those jurisdictions, the absence of usufruct is usually offset by other mechanisms that allow non-owners to enjoy the economic benefits of assets, such as life interest trusts or share classes with separate economic and voting rights.
Broadly speaking, the Act preserves the main features that define usufruct under civil law. It is a temporary right in rem that does not entail a transfer of ownership of the underlying asset. In other words, the usufructuary is entitled to the voting and/or economic benefit of the asset or set of assets, through the receipt of its fruits and income, while ownership remains with the bare owner.
As for duration, a usufruct may last up to 99 years for individuals (although, unless otherwise expressly stipulated in favour of a surviving or successor usufructuary, it terminates upon the death of the usufructuary) and up to 30 years for legal entities.
Under the Act, a usufruct must be created in writing, by agreement, by will or through a trust. Registration is optional (except for real estate, where the usufruct is constituted by registration), but it is required for the usufruct to be enforceable against third parties. The competent authority is the Registrar of Companies for usufructs involving legal entities, the Registrar of Records for other assets, and the applicable land registry for real estate. The regulations under the Act have not yet been issued.
The usufruct may cover a wide range of tangible and intangible assets, whether located in or outside The Bahamas (in the latter case, provided Bahamian law is applicable), such as:
equity interests and securities;
movable and immovable property, or a specific part of a given property (floor, unit, section);
intellectual property rights;
receivables and contractual rights;
insurance policy rights;
digital assets and crypto assets.
Among the rights granted to the usufructuary, the following stand out:
the right to use, maintain and preserve the asset;
the right to receive the fruits, profits and income derived from the asset; and
the right to lease or sublease the asset, unless otherwise provided in the instrument granting the usufruct.
The usufructuary’s obligations include preparing, at their own expense, an inventory of the assets before taking possession; providing security, if required by the owner; bearing ordinary maintenance costs and preserving the integrity of the assets; and paying the taxes due on account of the possession of the assets and the income they generate. The owner, in turn, is entitled to receive the information and reports needed to verify that the assets are being properly preserved and managed.
In short, usufruct can offer a number of advantages:
Transfer of ownership while retaining the control and/or economic benefit of the asset. This is a typical family planning strategy, in which a parent transfers title to a given asset to a child while continuing to control the asset and receive the income from that asset for the rest of their life as usufructuary.
Retention of control over strategic decisions. Even after granting the usufruct to a third party, the bare owner retains, unless otherwise agreed, decision-making power over extraordinary matters, such as the sale, merger or liquidation of the asset. In the case of equity interests, however, the Act assigns voting rights to the usufructuary by default, which may be changed in the instrument granting the usufruct.
Flexible duration. Within the statutory limits, the parties are free to set a term tailored to their planning objectives, whether a fixed period or the lifetime of the usufructuary (up to 99 years).
Continuity of economic benefit after restructuring. The usufruct survives the reorganisation of the corporate structure through merger, amalgamation, demerger, conversion and similar transactions, unless the equity interest is eliminated without being replaced by any other asset or right.
The introduction of usufruct in The Bahamas opens a new window of opportunity for wealth and succession planning involving structures abroad, offering new tools for obtaining benefit from assets typically held by fiduciary entities and offshore companies.
Lorusso & Partners continues to monitor all developments on this topic and remains available to answer any questions, as well as to design tailored tax, wealth and succession planning strategies.
