Bahamas Usufruct Interest Act, 2026

On March 23, 2026, The Bahamas enacted the Usufruct Interest Act, 2026 (Act No. 9 of 2026), establishing the first comprehensive statutory framework for usufructs in the jurisdiction. The Act enables individuals and legal entities to separate the right to use, enjoy, and derive income from an asset from its legal ownership — a powerful tool for estate planning, asset protection, wealth structuring, and cross-border fiduciary arrangements. This guide explains what a Bahamian usufruct is, who can benefit from it, and the step-by-step process to constitute and register one.

Background: Why the Bahamas Usufruct Interest Act Matters

The Usufruct Interest Act, 2026 fills a significant legislative gap in Bahamian law. For the first time, parties can formally establish, manage, and publicly register usufructs over a wide range of assets — including equity interests, securities, intellectual property rights, digital assets, receivables, insurance policy rights, and both real and personal property, whether situated in or outside The Bahamas. This broad scope makes the Bahamian usufruct one of the most flexible fiduciary instruments available in the offshore world today.

What Is a Usufruct? Key Concepts Under Bahamian Law

A usufruct is a real right (ius in rem) of limited duration that grants a person — the usufructuary — the right to use property, derive income from it, or exercise governing control over it, while the legal owner retains title. Key features under the Act include:

1. No transfer of ownership: the usufruct confers complete enjoyment but does not convey title.

2. Duration: up to 99 years for natural persons; up to 30 years for legal entities.

3. Duty of care: the usufructuary bears ordinary maintenance costs and taxes on account of possession or income.

4. Asset classes covered: equities, securities, IP rights, digital assets, receivables, insurance policy rights, and real or personal property inside or outside The Bahamas.

Who Can Benefit from a Bahamas Usufruct?

The Bahamian usufruct is particularly well-suited for high-net-worth individuals and families engaged in intergenerational wealth planning, business owners wishing to separate economic rights from governance rights over corporate shares, multinational groups looking to allocate IP income streams, trustees and fiduciaries seeking flexible asset-holding structures, and investors requiring enforceable security arrangements over financial assets or digital assets.

How to Create and Register a Usufruct in The Bahamas: Step-by-Step Process

The following is a summary of the key steps required under the Usufruct Interest Act, 2026 to formally constitute and register a usufruct in The Bahamas.

Step 1 — Draft the Usufruct Agreement

The usufruct must be created in writing, either through an agreement, a will, or a trust disposition. The written instrument must include: (i) the names and details of the legal owner and the usufructuary; (ii) a full description of the property; (iii) the duties and obligations of each party; (iv) the duration and termination provisions; (v) the rights and any restrictions granted to the usufructuary; (vi) accounting and reporting requirements; and (vii) a mechanism for dispute resolution.

Step 2 — Prepare the Inventory

Prior to taking possession, the usufructuary must prepare, at its own expense, a detailed inventory of the assets received, determining their condition. The inventory must be notarised by a counsel and attorney-at-law admitted to practice in The Bahamas.

Step 3 — Provide Security

If required by the legal owner, the usufructuary must provide a surety or guarantee — personal or real — to ensure the preservation and restitution of the property upon termination of the usufruct.

Step 4 — Apply for Registration

The usufruct must be registered with the appropriate authority: (a) the Registrar of Companies, for usufructs involving legal entities; (b) the Registrar of Records, for usufructs over other assets; or (c) the applicable Registry, for usufructs over immovable property. The application must include the legal name and address of the applicant, the nature of the usufruct, and the relevant corporate details of the entity involved.

Step 5 — Registrar Reviews and Registers the Usufruct

If satisfied that the usufruct complies with the Act, the Registrar enters on the register: the details of the owner and usufructuary, the nature of the interest, the duration, and any economic, voting, or other rights affected.

Step 6 — Certificate of Receipt Is Issued

Upon registration, the Registrar issues a Certificate of Receipt and Acknowledgment of Registration Submission, confirming receipt thereof. A copy is placed on the public file maintained by the Registrar.

Step 7 — The Usufruct Becomes Enforceable Against Third Parties

From the date of registration, the usufruct is enforceable against third parties, subject to any prior registered security interests or encumbrances. This protection is essential in multi-party commercial transactions and cross-border structures.

Step 8 — Ongoing Obligations and Termination

Throughout the life of the usufruct, the usufructuary bears ordinary maintenance costs and taxes on account of possession or income. The owner retains the right, upon reasonable notice, to receive information and reports necessary to verify proper preservation and administration. Upon termination, a written notice of de-registration must be filed with the applicable Registry.

Frequently Asked Questions

Can a usufruct be created over digital assets or cryptocurrency in The Bahamas?

Yes. The Usufruct Interest Act, 2026 expressly includes digital assets within its scope. This makes The Bahamas one of the few jurisdictions worldwide to provide a statutory framework for usufructs over cryptocurrency and other digital assets.

How long can a Bahamian usufruct last?

The Act permits usufructs of up to 99 years for natural persons and up to 30 years for legal entities such as companies or foundations.

Does a Bahamian usufruct transfer ownership of the asset?

No. A usufruct is a right of enjoyment and use, not a transfer of title. The legal owner retains ownership at all times. This separation of rights is the hallmark of the usufruct structure and its primary advantage for wealth planning.

Is a Bahamian usufruct enforceable against third parties?

Yes, once registered with the appropriate Bahamian Registry, the usufruct is enforceable against third parties, subject to any prior registered security interests or encumbrances.

Guidance on Bahamian Usufruct Structures

Icaza, González-Ruiz & Alemán (IGA) has provided legal and fiduciary services since 1920. Our team advises on the full range of Bahamian offshore structures, including the constitution, registration, and management of usufructs under the new Act. Should you wish to explore how a Bahamian usufruct may serve your wealth planning, asset protection, or commercial objectives, please do not hesitate to contact us. We will be pleased to guide you through every step of the process.