--- title: "Freeport Free Trade Zone: What Buyers Must Verify" description: "Freeport free trade zone: what the 2026 arbitration award settled, which Hawksbill Creek concessions run to 2054, and the seven points buyers must verify." image: https://cphinvestmentgroup.com/hubfs/AI-Generated%20Media/Images/Turquoise%20Waters%20And%20Palm%20Trees%20Along%20Grand%20Bahama%20Coastline.png --- [![CPH (1)](https://cphinvestmentgroup.com/hubfs/CPH%20(1).png)](https://cphinvestmentgroup.com) ![menu](https://f.hubspotusercontent40.net/hubfs/7479797/menu.png) ![close\_24px](https://7479797.fs1.hubspotusercontent-na1.net/hubfs/7479797/close_24px.svg) - START HERE Show submenu for START HERE - [Alma Residences](https://cphinvestmentgroup.com/alma-residences-renderings) - [Signature Series Miami](https://cphinvestmentgroup.com/gables-signature-accredited-investors) - ABOUT Show submenu for ABOUT - [About CPH Invest](https://cphinvestmentgroup.com/en/christoph-pamela-building-investment-income-through-real-estate) - [Testimonials](https://cphinvestmentgroup.com/testimonials) - CONTACT Show submenu for CONTACT - [Accredited Investors Access](https://cphinvestmentgroup.com/accredited-investors-access) - [Investor Portal Access](https://cphinvestmentgroup.com/portal) - [Ask Christoph & Pamela Directly](https://egsqs.share.hsforms.com/2pZMlphqMTqG21h3qZEoJGw) - START HERE Show submenu for START HERE - [Alma Residences](https://cphinvestmentgroup.com/alma-residences-renderings) - [Signature Series Miami](https://cphinvestmentgroup.com/gables-signature-accredited-investors) - ABOUT Show submenu for ABOUT - [About CPH Invest](https://cphinvestmentgroup.com/en/christoph-pamela-building-investment-income-through-real-estate) - [Testimonials](https://cphinvestmentgroup.com/testimonials) - CONTACT Show submenu for CONTACT - [Accredited Investors Access](https://cphinvestmentgroup.com/accredited-investors-access) - [Investor Portal Access](https://cphinvestmentgroup.com/portal) - [Ask Christoph & Pamela Directly](https://egsqs.share.hsforms.com/2pZMlphqMTqG21h3qZEoJGw) [Bahamas Real Estate](https://cphinvestmentgroup.com/en/blog/tag/bahamas-real-estate) [CPH Invest](https://cphinvestmentgroup.com/en/blog/tag/cph-invest) # Freeport Free Trade Zone: What Buyers Must Verify [Christoph Albeck](https://cphinvestmentgroup.com/en/blog/author/christoph-albeck) Oct 2, 2026, 10:47:37 AM Grand Bahama is usually sold as a tax story. For property inside the Port Area of Freeport it is more precisely a contract story: a 1955 agreement between the Bahamian government and a private developer, amended repeatedly, and in 2026 stress-tested in international arbitration. The tribunal's partial award of 27 February 2026 set out who regulates what in Freeport. Anyone underwriting Grand Bahama property this year should read that framework first. ## What the Freeport free trade zone actually is The Hawksbill Creek Agreement (HCA) was signed in 1955. It granted Wallace Groves roughly 50,000 acres on Grand Bahama, with an option on a further 50,000, and created the Grand Bahama Port Authority (GBPA) to develop and administer the land. The result is the City of Freeport: a defined Port Area in which licensees operate under GBPA licences and receive duty and tax concessions that do not apply elsewhere in The Bahamas. Two structural features matter before any number is modelled: - The concessions attach to the **Port Area**, not to Grand Bahama as a whole. Land outside the boundary is treated under national rules, with no Freeport relief. - Commercial benefits generally require a GBPA licence, a declaration of use and, for importers, a customs bond. Qualifying activity must be conducted within the City of Freeport. That is a different proposition from a conventional purchase elsewhere in the country, as our [Grand Bahama market overview](https://cphinvestmentgroup.com/en/blog/grand-bahama-market-us-canadian-investors) sets out. ## What the 2026 arbitration award settled The long-running dispute between the Government and the GBPA went to arbitration. The partial award was issued on 27 February 2026 and announced publicly on 3 March 2026. Three findings bear directly on due diligence. - The tribunal confirmed the Government's right to recover administrative expenses through annual payments from the GBPA for the remainder of the HCA term, which it identified as running **until 2054**. - The Government's $357m reimbursement claim was dismissed as framed. Determination of historical amounts owed moves to a later phase of the proceedings, so the quantum question is deferred rather than closed. - The GBPA's counterclaim, originally pleaded above $1bn, was dismissed except for one limited aspect concerning delayed consideration of environmental bylaws. Its claim to exclusive administrative authority over Freeport was rejected: the tribunal confirmed that the Government retains legislative and regulatory authority over licensing, immigration, customs, land acquisition, environmental regulation, development approvals and utility tariffs. The GBPA subsequently told licensees that the ruling "did not fundamentally alter the status quo". The useful investor reading is narrower: the HCA term to 2054 is now acknowledged in an award, and the division of authority is documented rather than asserted. Governance of Freeport remains an open policy question regardless — it was named again in the Speech from the Throne in May 2026 — so treat the ownership and administration of the GBPA as a variable, not a constant. ## Which concessions run to 2054, and which are time-limited The Government's own incentive schedule separates HCA relief into two classes. The distinction is where informal advice most often fails. - **Running to 2054:** exemptions from customs duties, excise taxes, export taxes and stamp duties for qualifying Port Area activity. - **Granted on application, for periods of up to 20 years:** relief from real property tax, personal property tax and taxes on earnings. "No real property tax in Freeport" is therefore not a permanent attribute of the land. It is a grant with a holder, a parcel and an expiry date. Before any saving is capitalised into a yield, the instrument itself should be produced, with the dates on it. The same discipline applies to the residency question covered in our [tax and residency guide](https://cphinvestmentgroup.com/en/blog/the-ultimate-guide-to-tax-residency-in-the-bahamas-for-us-canadian-investors): the entitlement is documentary, not ambient. ## The demand side: committed capital, slipping timelines The case for Grand Bahama rests less on the legal framework than on who is spending money there. The verifiable items as of late 2026: - Carnival's Celebration Key reported 2.4 million guests in its first year of operation, to July 2026. - Grand Bahama recorded roughly 1.1 million total arrivals in 2025, passing one million for the first time in more than two decades, with air arrivals up about 20% year on year and more than 30% above 2019. - Nationally, the Central Bank reported 8.5 million arrivals in the year to July 2026, up 14.8%, split between 7.2 million sea visitors (up 16.4%) and 1.2 million air visitors (up 5.8%). - MSC's disclosed Bahamas commitments across Ocean Cay, Sandy Cay, Freeport Harbour, the Grand Lucayan and its Grand Bahama Shipyard shareholding approach $1.5bn in aggregate. - The Grand Lucayan redevelopment is planned by Concord Wilshire Capital at $827m on a 56-acre beachfront site, with 350 guestrooms and 120 residential units, and a 2028 completion target under the 2025 announcement. Timelines, however, have moved. A government deadline for a Grand Lucayan update passed in March 2026 without one; the April 2026 agreement restructured the project into multiple sites with new partners and made demolition conditional on environmental approvals. Committed capital and delivered capital are not the same line item, and an underwriting model should not assume the stabilised case arrives on the announced date. ## Cost and supply risk on the ground Construction inputs on Grand Bahama are concentrated. Bahama Rock halted aggregate production on 18 September 2026 and furloughed 69 workers for up to 60 days pending environmental approval to access new reserves. Industry participants warned within days that the interruption would raise construction costs nationally and could delay building projects; a competitor has since pledged a $9m outlay to fill part of the gap. Two implications follow for a buyer. First, a renovation or build-to-rent budget quoted before late September 2026 may understate materials cost. Second, concentration risk in a single input supplier is a legitimate line in a risk register for an island market, alongside the shortage of habitable stock described in our [analysis of the Grand Bahama housing shortage](https://cphinvestmentgroup.com/en/blog/grand-bahamas-housing-crisis). Property insurance is the related constraint: Bahamian insurers signalled at the end of 2025 that meaningful reductions in catastrophe-exposed property premiums were unlikely, so insurance should be priced as a standing operating cost rather than a rounding error. ## Tax treatment outside the Port Area For comparison, property acquired outside the Port Area falls under the national schedule. VAT on conveyance of real property to an individual is tiered, from 2.5% at or below $100,000 to 10% above $1m; transfers to a company are charged at 10%. Annual real property tax on an owner-occupied property is exempt up to $300,000, then 0.625% to $500,000 and 1% above that, subject to a cap. Mortgages attract 1%. Non-Bahamian acquisitions also fall under the International Persons Landholding Act, where certain approvals are now conditional on VAT being paid within 18 months. Set against those figures, the Port Area concessions are material. They are also conditional, time-limited and parcel-specific, which is precisely why they belong in the due diligence file rather than in the headline. ## What to verify before signing - Written confirmation that the parcel sits inside the Port Area boundary, not merely on Grand Bahama. - The GBPA licence status relevant to the intended use, and whether the use requires one at all. - The actual concession instrument: holder, parcel, scope and expiry date, plus whether it transfers on sale. - A current real property tax position and any arrears attaching to the title. - An insurance quotation obtained before exchange, not after, with the wind deductible stated. - A construction budget re-tendered on post-September 2026 materials pricing, with a contingency for aggregate supply. - Utility tariffs and connection timelines, which the award confirms sit with the Government rather than the GBPA. ## Discussing a specific parcel Port Area status, concession expiry and insurance terms are parcel-level questions that cannot be answered from a listing. If you are assessing a specific property or site on Grand Bahama and want the documentary position reviewed before you commit capital, request access below and we will respond with the relevant material for your case. *This article is for information only. It is not investment, tax or legal advice, and it is not an offer to sell or a solicitation of an offer to buy any security or any interest in any property. Figures cited are drawn from public sources as at the dates stated and may have changed. Tax treatment depends on individual circumstances, including residence and citizenship, and must be confirmed with qualified legal and tax advisors in the relevant jurisdictions before any decision is taken.* Previous Post ###### [Mallorca Real Estate Market 2026: Prices, Trends & Investment](https://cphinvestmentgroup.com/en/blog/mallorca-real-estate-market-2026-prices-investment-development) ### Similar Blog Posts [![Residence by Investment Project on Flamingo Lane, Freeport Bahamas](https://cphinvestmentgroup.com/hs-fs/hubfs/AI-Generated%20Media/Images/The%20image%20captures%20a%20serene%20coastal%20scene%20on%20Flamingo%20Lane%20Freeport%20surrounded%20by%20lush%20tropical%20greenery%20and%20elegant%20caribbean%20style%20villas%20A%20picturesque%20bridge%20leads%20to%20a%20private%20peninsula%20where%20children%20play%20freely%20on%20the%20quiet%20streets%20In%20the%20foreg-1.jpeg?width=352&name=The%20image%20captures%20a%20serene%20coastal%20scene%20on%20Flamingo%20Lane%20Freeport%20surrounded%20by%20lush%20tropical%20greenery%20and%20elegant%20caribbean%20style%20villas%20A%20picturesque%20bridge%20leads%20to%20a%20private%20peninsula%20where%20children%20play%20freely%20on%20the%20quiet%20streets%20In%20the%20foreg-1.jpeg)](https://cphinvestmentgroup.com/en/blog/residence-by-investment-project-on-flamingo-lane-freeport-bahamas) ##### [Residence by Investment Project on Flamingo Lane, Freeport Bahamas](https://cphinvestmentgroup.com/en/blog/residence-by-investment-project-on-flamingo-lane-freeport-bahamas) [![Tax-Free Investing](https://cphinvestmentgroup.com/hs-fs/hubfs/AI-Generated%20Media/Images/The%20image%20showcases%20a%20serene%20Bahamian%20landscape%20featuring%20a%20luxurious%20beachfront%20property%20framed%20by%20swaying%20palm%20trees%20and%20soft%20white%20sand%20The%20turquoise%20ocean%20sparkles%20under%20the%20bright%20sun%20creating%20a%20vibrant%20contrast%20against%20the%20clear%20blue%20sky%20In%20the.jpeg?width=352&name=The%20image%20showcases%20a%20serene%20Bahamian%20landscape%20featuring%20a%20luxurious%20beachfront%20property%20framed%20by%20swaying%20palm%20trees%20and%20soft%20white%20sand%20The%20turquoise%20ocean%20sparkles%20under%20the%20bright%20sun%20creating%20a%20vibrant%20contrast%20against%20the%20clear%20blue%20sky%20In%20the.jpeg)](https://cphinvestmentgroup.com/en/blog/tax-free-investing-through-a-liechtenstein-foundation) ##### [Tax-Free Investing Through a Liechtenstein Foundation](https://cphinvestmentgroup.com/en/blog/tax-free-investing-through-a-liechtenstein-foundation) [![No Property Tax on Real Estate in Freeport, Grand Bahama](https://cphinvestmentgroup.com/hs-fs/hubfs/AI-Generated%20Media/Images/The%20image%20depicts%20a%20serene%20beach%20scene%20in%20the%20Bahamas%20showcasing%20soft%20white%20sand%20gently%20meeting%20turquoise%20waters%20under%20a%20clear%20blue%20sky%20Palm%20trees%20sway%20in%20the%20warm%20breeze%20casting%20playful%20shadows%20on%20the%20beach%20In%20the%20foreground%20a%20luxurious%20modern%20villa.jpeg?width=352&name=The%20image%20depicts%20a%20serene%20beach%20scene%20in%20the%20Bahamas%20showcasing%20soft%20white%20sand%20gently%20meeting%20turquoise%20waters%20under%20a%20clear%20blue%20sky%20Palm%20trees%20sway%20in%20the%20warm%20breeze%20casting%20playful%20shadows%20on%20the%20beach%20In%20the%20foreground%20a%20luxurious%20modern%20villa.jpeg)](https://cphinvestmentgroup.com/en/blog/no-property-tax-on-real-estate-in-freeport-grand-bahama) ##### [No Property Tax on Real Estate in Freeport, Grand Bahama](https://cphinvestmentgroup.com/en/blog/no-property-tax-on-real-estate-in-freeport-grand-bahama) ###### Join the Circle - [What Our Investors Say](https://www.provenexpert.com/en-us/cph-invest/) - [Stay Close to the Deal Flow](https://share.hsforms.com/2nkfi9OLHR1CQlD9pE_kTeAegsqs) - [FAQ](https://cphinvestmentgroup.com/faq) CPH Investment Group - We love Real Estate. 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