Tax affairs
One of Bermuda’s biggest attractions is its tax-neutral jurisdictional status, with zero tax on profits, income, dividends or capital gains. There is however a payroll tax (up to 14 percent, usually split between employer and employee).
Bermuda is a highly respected jurisdiction and a leader in global tax transparency. The Island has negotiated 41 bilateral tax information exchange agreements (TIEAs) with a host of global economies, many of which are also signatories to the Council of Europe’s Multilateral Convention on tax issues.
Bermuda was the first offshore jurisdiction elevated to the ‘white list’ category of the Organisation for Economic Cooperation and Development (OECD), which rates the Island as being on the same level of tax transparency as the UK, the US and Germany.
Bermuda has also signed intergovernmental accords with the US for foreign reporting (FATCA) conditions, and is on schedule to meet Europe’s Solvency II requirements. The fact that Bermuda has been at the forefront of Solvency II equivalence has not gone unnoticed by EU investors who see Bermuda as a well regulated, reputable and efficient jurisdiction.
Partially because of these reputational issues and due to Bermuda’s world-class insurance and reinsurance sector, institutional investors have sizeable investments in Bermuda funds, in particular, in ILS funds. Bermuda’s primary customers are the US, UK and Canada, but there has been a recent increase in Nordic, French and German pension funds subscribing to Bermuda ILS products and cat bonds.
Concerning capital markets, Bermuda has a clear advantage. The BSX is the world’s largest offshore, fully electronic securities market, offering the full range of listing and trading opportunities for international and domestic issuers of equity, debt, depository receipts, insurance securitisation and derivative warrants.
The BSX is a member of the World Federation of Exchanges and recognised by the SEC in the US, the UK’s FCA, and Canada’s Finance Ministry. The BSX carries numerous dual listings in Europe and Bermuda. BaFin (the German regulator) allows BSX-listed companies to dual list automatically in Frankfurt, with the Bermuda prospectus being sufficient for those purposes.
Bermuda leads
Regarding the Alternative Investment Fund Managers Directive (AIFMD), the EU and the BMA have signed a joint cooperation agreement. This agreement is a pre-condition in allowing non-EU AIFMs access to EU markets or to perform fund management activities on behalf of EU managers. As part of its AIFMD compliance initiatives, the BMA
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Regulatory and legislative amendments have reduced bureaucratic red tape, streamlined the process for fund setups and encouraged the influx and retention of intellectual capital through progressive changes.
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is developing an opt-in regime to enable Bermuda-based AIFMs to maintain seamless operations across the European market.
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Bermuda’s regulatory reputation owes much to the efforts of its regulator, the BMA, which is now a full member of the International Organisation of Securities Commissions (IOSCO) and a founding member of the International Association of Insurance Supervisors (IAIS).
While Bermuda ticks such tactical boxes for facilitating global business, a trump card is that the Island also happens to be a very desirable place to live.
For companies contemplating Bermuda as a domicile, the BDA delivers a concierge-style resource, providing pertinent information and connecting inquiring firms with market professionals. The agency has several business development managers to complement the work of Island industry leaders to actively assist companies seeking to add the appropriate offshore structure to their businesses model.
Specifically, the BDA has structured its business development approach into four strategic pillars—insurance, asset management, trusts and wealth management, and offshore commerce—exploring opportunities Bermuda offers for each. Corresponding corporate entities within those sectors will find an abundance of support from the agency.
We are committed to keeping international business here and are proactively advising the sophisticated international business community about our conducive business environment and are continually refining, augmenting and simplifying the process to start, relocate or grow a business here.
Now is a perfect time to come to Bermuda as we continue to build on our success and well-deserved reputation as a jurisdiction that caters superbly to the global marketplace.
For more information about Bermuda and the BDA, visit
www.bermudabda.com
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