The best solution that I can see is that you tell BIL that the situation with the job is no longer possible. That he has been moved through every role you can find and he continues to have a detrimental effect. Not neutral, detrimental - he is actually losing you money because staff leave.
You get him out of the house, you find alternative (cheaper!!!) accommodation and you pay him a monthly amount which will cover his rent and SMALL living expenses.
You've already said your DH won't let him sink so this makes sense financially, where simply sacking him isn't on the table. Doing this will, if managed right, SAVE you money as:
a. He'll be out of the business and you don't have to put money and energy into mitigating his effect all the time;
b. He'll be out of the house - so you have the option to raise that rent as much as possible and possibly even look at renting externally, or bring in someone to his vacant post on slightly different terms, either a slightly lower salary overall or slightly higher rent;
c. Your 'BIL outlay' will lessen in absolute terms. Right now you're paying out and it's actually damaging your business at the same time and tying up a valuable asset. Instead you can offer a stipend which you know can get him eg a small 2-bed or a 1-bed centrally, and it's his choice, but I bet it will cost a lot less than the effective house rental.
The next advantage of this is that it frees you up to leave if you wish. Once he's not employed, a decision to return to the UK/sell the business/ whatever simply won't affect him. No guilt for your DH. He can also move his DD in to his flat/house if he wishes and that will be up to him - does he want to choose a property in a slightly less good location so he can afford a bedrooom for her, or is he going to prioritise possibly finding his own job and living centrally in a smaller place? His issue.
But the most important aspect to it will be that it will correct the dynamic here, and I think the emotional and mental effect of that on both of you will be hugely positive (and maybe positive for BIL too, but that later). Right now, you and especially your DH have ended up in a situation where you're being forced to collude in a dynamic which is a big pack of lies, all created at huge cost to you to shield this pathetic, using, taking, useless grown man from real life. He gets to swan around 'managing' - but actually his brother is completely carrying him. He MUST be, at some level, completely entitled to be ok with this - and I think he is, from your story about him taking time out from the job he can't fucking do to swan around YOUR property showing it off as if it's his. I would be absolutely boiling at the temerity of that and would want to tell the new squeeze exactly how much of a parasite he was! Cheeky shit.
Well, this new arrangement would bring all that to an end. It would be obvious to everyone who mattered what the real, honest situation was here. No more pretending to be someone with a job (unless he actually went out and got one of his own). No more swanning round your property, letting people think he is a key part of you business. The situation would be an honest one at last. No more pretence within the family that the brothers are somehow on an equal footing - which right now must be so so infuriating and corroding for your DH, and any brother relationship. They could get back to building a brother relationship where it would have to be tacitly acknowledged that if it wasn't for your younger brother DH he'd be on his arse. No wonder your DH is constantly at him - the unfairness of the sibling dynamic as it stands would kill me. All the real effort covered up to make the golden twat look better. I would be so RAGING at seeing that 'very, very well' paid wage go out every month while he sits there complacently fucking everything up.
And, it might just have an effect on BIL. His choice would now be to publicly live as it's really always been - dependant on your DH. If he really is an absolute entitled parasite, he'll do that. Fine, you can play pretend families sometimes and leave him to it and have the choice not to really see him, and be able at last to answer honestly when people ask what the arrangement is.
Or, it might just be too embarrassing to have the pretence stripped away at nearly 50, have people asking him how he's managing to live now he's moved on from working with his brother, and he might actually have enough shame (and enough desire to not have to live a very basic life) to actually get a job, or at least look for one.
If I were you I would do some sums. What is a cheap-ish but ok rental for a 1/2 bed in a place where he would be able (theoretically) to get a job? Add on a basic living stipend. I would bet it will be money well spent to solve this issue for good.