The Boundary Element Method (BEM) is a well-established, accurate numerical method for solving engineering problems described by linear partial differential equations. However, the application of BEM to non-linear problems leads to the appearance of volume integrals in the integral formulation, and combined with the non-local character of the method the required computational effort is dramatically increased. In this work, a Local Domain BEM (LD-BEM) is proposed for solving incompressible fluid flow problems. The domain of interest is fragmented into small subdomains, in each of which the integral representation of the solution is considered separately. Eliminating the fluxes at all subdomain interfaces, the proposed LD-BEM leads to sparse linear system coefficient matrices and reduced computational complexity, overcoming some of the well-known disadvantages of the conventional BEM. The proposed method is applied to the solution of the well-known two-dimensional (2D) lid-driven cavity problem, for Reynolds numbers up to Re=125 × 103, with a discretization involving more than 10 million unknowns.