Farage, 57, was seen tucking into a meal and drinking on a terrace in the late afternoon sunshine last Saturday while pubs back in the UK were still closed.
He was accompanied by a grey-haired American businessman, his partner and her two young children who were playing on tablet screens as they sat under a Heineken parasol.
Farage seemed in good humour, cracking jokes and talking loudly while soaking up the party atmosphere at the St Maarten Yacht Club Bar and Restaurant.
It is currently illegal for residents of the UK to go on foreign holidays although overseas trips for business are permitted.
Nigel Farage was pictured wearing a baseball cap and casual polo shirt at the St Maarten Yacht Club Bar and Restaurant on Saturday afternoon
The 57 year old former UKP and Brexit Party leader spoke animatedly over some drinks to a white-haired American businessman who was there with his family
Two party-goers in the Caribbean couldn’t resist the opportunity to get their photo taken with the outspoken politician and captioned the picture ‘lovely night out with a great geezer’
Farage told MailOnline that he was on a lengthy business trip, saying: ‘I’m away for some time.
‘There are all sorts of restrictions you have to go through at the moment like quarantine restrictions or whatever.
‘But most of the Caribbean islands at the minute are very, very low on Covid and are acceptable destinations to travel to from other countries. I am away for several weeks.’
When asked to elaborate on the type of business trip he was on, he added: ‘I’ve got one or two speaking engagements coming up, and all will be revealed.
‘It is a business trip, I’m here and I’m working. The hours are pretty antisocial, I can tell you. You have to start at four in the morning.
‘I’m here for a couple of weeks, I’m nearly done actually, and then I will be off doing some public speaking engagements which are yet to be announced.
‘I’m not going to say where right now, but it doesn’t take much working out.’
Farage denied that he had been staying on a superyacht, but refused to elaborate about where he was staying.
He declined to identify his companions in the bar other than saying that he was with an American businessman who had his partner and her children with him.
The territory of St Maarten on the southern side of the island of St Martin has few British visitors and is a popular retreat for rich Americans and Russians who are often ferried to shore from their superyachts.
Wearing a baseball cap, a pink striped polo shirt and shorts, the charismatic former politician may have thought he would go unrecognised in the Dutch enclave.
But he was spotted by British yacht engineer Ray Godsall, 60, who was enjoying a drink in the same bar late on Saturday afternoon.
Mr Godsall said: ‘It was quite a surprise to see Nigel Farage sitting there. He was talking quite loudly. He was not drunk, but he had clearly had a few drinks.
Farage told MailOnline he was there on business as he complained about the travel restrictions that he had to endure to get there during the global Covid pandemic
‘I recognised him and his voice immediately. He was certainly in a very good mood and was very jovial.’
Mr Godsall who is originally from Arundel, West Sussex, has been living on St Martin since November while looking for work on a yacht after quitting his last post.
He said that he arrived in the bar at 4pm when Farage was already at his table with his dining companions.
Mr Godsall added: ‘He was with a man who appeared to be an American businessman. There was also an attractive woman who appeared to be the American’s wife or partner. She was Slavic or Russian.
‘The bar served American type food and it is not too expensive with a beer costing about $4 US.
‘Nigel was dressed very casually and the American guy was a bit more dressed up. The Slavic woman was dressed to the nines as they usually are.
‘People usually get brought from the yachts by tender to have a drink or meal on shore.
A lot of business gets done on yachts
‘It is a very popular spot. There must currently be around 20 superyachts on the dock. It is a real millionaire’s playground.
‘He and his group must have left at around 6pm. The island of St Martin is half French and half Dutch, and has very few British visitors. He probably thought that nobody would know who he was.
‘But he seemed to enjoy being out and about. I later went to another bar and a guy from Birmingham showed me a picture he had taken of him with his arm around Nigel.’
Visitors who arrive in St Maarten after having been in the UK must show a negative PCR test result for coronavirus taken within the previous 72 hours.
But there is no requirement to quarantine, even though the authorities on St Maarten consider the UK to be a ‘high risk’ country for Covid-19.
Visitors from the UK are instead only required to self-monitor themselves for high temperatures and ‘possible flu like symptoms’ for 14 days while in the territory.
Mr Godsall added: ‘It is all very relaxed compared to other islands. There are no direct airline flights from the UK – but you can fly direct by private jet. The airport is full of private jets.’