Storm Warning in Paradise: How New Boating Laws and Tax Policy Are Affecting Yacht Tourism in the Bahamas

By Anna Ingles 4 July 2025

The Bahamas has long held a revered status as one of the premier yachting destinations in the world. With its turquoise waters, sheltered anchorages, and a constellation of 700 islands, it has offered yacht owners and luxury yacht charter guests a dreamlike escape.

However, recent policy changes threaten to unravel the reputation of idyllic Bahamas yacht charters. A sweeping overhaul of boating regulations, paired with previous tax hikes, is reshaping the financial landscape of chartering in Bahamian waters—and not in its favor.

Yacht Charter Fleet takes a look at the implications of the new legislation and what the future may hold for Bahamas and Caribbean yacht charters.

Legislative Tides: What the 2025 Boating Overhaul Means for the Yachting Industry

On July 1, 2025, the Bahamas implemented one of the most comprehensive maritime regulation updates in its history. While intended to modernize oversight and increase government revenue, the new policies are introducing a complex web of compliance, cost increases, and legal exposure for motor and sailing yacht charter operators and private yacht owners alike.

AIS & Tracking Requirements
All foreign-flagged vessels 50ft (15.24m) or longer must now maintain a functioning AIS signal at all times, even when anchored. Non-compliance can lead to $1,000 fines and shared liability for both vessel owners and captains.

Escalating Fees & Passenger Charges
A raft of user fee increases impacts cruising permits (up to $3,000), anchoring (up to $1,500), and fishing (up to $300). A $30 tax per non-resident passenger now applies beyond the first three guests aboard.

FDCC Program Adds Cost Without Cutting Red Tape
The newly introduced Frequent Digital Cruising Card (FDCC) promises multi-entry clearance at premium prices. However, it fails to eliminate the need for customs check-ins, reducing its intended efficiency.

Seabed Lease Enforcement Introduces Legal Exposure
Structures like docks and moorings now require formal seabed leases. Failure to comply can lead to fines of up to $50,000 per acre and criminal liability for unlicensed installations.

The combined weight of these reforms is already being felt throughout the Bahamas and Exumas yacht charter industry.

The cost inflation resulting from mandatory AIS upgrades, expanded permits, and higher passenger taxes is driving up operational costs across the board, with operators forced to absorb or pass on these new costs, which risks pricing the Bahamas out of an increasingly competitive market. Resulting in operators actively shifting superyacht charters to other Caribbean jurisdictions.

The VAT Wake: How a 2022 Tax Sparked a Charter Exodus

While the 2025 reforms are making headlines, the root of the charter slump in the Bahamas began three years prior. In mid-2022, the Bahamian government implemented a 10% Value-Added Tax on yacht charters, in addition to a longstanding 4% port department fee. This 14% total charter tax instantly became the highest in the Caribbean.

The Aftermath:

Charter bookings plunged by 40% within a year.
Marina traffic declined by 20–25%.
Charter brokers described the 2022–23 winter season as one of the worst in decades.

The 2025 legislation, while intended to provide structure and long-term benefits, only adds fuel to a fire that was already threatening to consume a key tourism sector. The combined effect of the previous VAT increases and the recently added extra charges has created a perfect storm:

Upfront fee escalation: Owners now face AIS retrofitting, customs attendance costs, anchorage and fishing permit bundling, and seabed lease compliance.
Operational unpredictability: Variable charges per-entry or per-service (e.g., Customs attendance, additional passenger tax) complicate pricing and budgeting.
Client impact: Charter rates must be raised—not just to cover the VAT, but also these new surcharges, making the Bahamas and its captivating islands like Bimini and Eleuthera less competitive against regional alternatives.

By adding this new layer of cost and complexity, the latest legislation deepens the charter-market crisis begun by the VAT increase. Unless addressed, many yacht charter operators may skip the Bahamas entirely, further eroding what was once a thriving hub for luxury yacht charters.

Navigating Around the Bahamas: Destinations Gaining Favor

As costs rise and regulations tighten in the Bahamas, charter operators are increasingly evaluating alternative Caribbean destinations that offer more predictable rules, lower taxes, and a friendlier environment for maritime tourism.

Many of these yacht charter destinations provide comparable natural beauty and high-quality cruising conditions, without the administrative hurdles now facing the Bahamian sector. Yacht Charter Fleet takes a closer look at four standout alternatives:

Turks & Caicos

No VAT on charters

Offering comparable cruising conditions and shorter itineraries, Turks & Caicos Islands yacht charters have quickly become a favored escape thanks to their stunning, untouched beaches and proximity to Florida. The absence of VAT makes it especially appealing to value-conscious charters.

Colored buildings in the Turks & Caicos Islands

U.S. Virgin Islands & Puerto Rico

U.S.-flagged vessels enjoy streamlined compliance
Minimal local charter taxation

With the U.S. Virgin Islands & Puerto Rico being U.S. territories, they offer familiar legal systems, strong infrastructure, and limited local taxes, making them easy and efficient for USA yacht charter operators to navigate.

Motor yacht charters berthed in the US Virgin Islands

St. Maarten / Sint Martin

Central Caribbean hub with robust infrastructure

Favorable tax environment with dual Dutch-French governance and world-class marina services, St. Maarten yacht charters offer a strategic base for exploring throughout the northeastern Caribbean. Its tax regime remains one of the most operator-friendly in the region.

Overview of the coastline surrounding Saint Martin

Antigua & Barbuda

Established charter sector
Customs and import duty exemptions for charter companies

Known for its regattas and deepwater anchorages, Antigua yacht charters remain a popular option for winter sun, especially when booked in conjunction with the iconic St Barts New Year's Eve festivities. Policy support for the charter industry, including customs relief, enhances its appeal further.

Overhead view of Nelson's Dockyard, Antigua

The combined effect of the 2022 VAT hike and 2025’s regulatory overhaul is creating a challenging environment for charter operations in the Bahamas. The intent behind the changes—greater oversight, higher revenues, better-managed resources—is understandable. But the execution risks alienating the very stakeholders who contribute most to the country’s tourism economy.

If you're looking to book an indulgent escape for the forthcoming winter season, contact your preferred yacht charter broker today for the latest availability and further information surrounding yacht charter costs.

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