Bermuda

Executive Summary

The Bermuda islands is a British overseas territory situated in the North Atlantic Ocean. Approximately 140 islands form Bermuda that covers 53,3 sq km. Bermuda represents one of the highest incomes per capita in the world, and financial services together with tourism are particularly developed there. English is the official language, its population slightly exceeds 65 thousand people, and its capital is Hamilton.The Queen Elizabeth II is he Chief of the State, represented by the UK Governor appointed by the UK government, who has representative functions and is responsible for the defense and international affairs.

Local politics is autonomously organized and implemented by the locally elected House of Assembly and the appointed Upper House.

The legal system is derived from the UK Common Law, and the final court recourse is processed with the UK courts. Being an offshore financial centre, Bermuda is widely known for the expertise in insurance, investment funds and special purpose vehicles. Bermuda has a favorable tax environment that is strictly regulated and controlled by the authorities.

Being a small territory within which new constructions are not permitted, the laws are very particular for the immigrants precisely defining a minimum amount for purchasing a property for living and obtaining a citizenship after many years of living there. All are let to have only one car per house the engine of which is limited up to 2 liters, and tourists during the stay in Bermuda are not allowed to rent a car – only a scooter or a bicycle, but these are the most appropriate vehicles as the speed limit is 35 km/h.

National currency is Bermudian Dollar the exchange rate of which corresponds to the USD, which is widely used together with the local currency on the territory of Bermuda.

Geography

Bermuda is located to the east of North America and is composed of many islands. There are two big towns – Hamilton and St. George on its territory together with several villages such as Tucker’s Town and Somerset Village.

Bermuda has a tropical rain forest climate, very different from the Caribbean islands. It is possible to live different seasons in Bermuda and thanks to the Gulf Stream, winter temperatures are kept above 0 degrees C. Air masses that often raise above the Bermuda islands cause rapid changes in temperature and heavy rains. Hurricanes are possible on the territory of Bermuda, but usually they calm down approaching its territory.
All the houses have particularly shaped roofs that help collect the rain water in tanks each house has, as sweet water is a rare and very valuable commodity in Bermuda.

Map, Flag and Coats of Arms

 

political map of Bermuda
the flag of Bermuda
coat of arms of Bermuda

 

Types of Company

Local company (60% or more owned by (a) Bermudian(s))

Only this type of company can trade on the territory of the Bermuda islands, only these companies are liable to tax contributions to local authorities. In order to conduct banking or insurance activities a government license should be obtained.

Exempt company (owned mainly by non-Bermudians)

These companies may have a physical presence (office) in Bermuda and may employ local staff. Minimum paid-up capital is US$ 1, but usually the share capital is US$ 12,000. A company should have at least one shareholder and at least two directors, and the change of domicile is permitted. This company cannot trade in Bermuda and cannot conduct a banking or insurance business. Beneficial owners are disclosed to the local authorities, but this information is strictly preserved from becoming public.

Trusts

It is necessary to obtain a trust license in order to execute trustee duties, but unpaid private trustees are a common practice within the jurisdiction. The residence of the trust is the same as of the majority of the trustees. There are favorable conditions for holding non-Bermudian trusts. There are non-charitable purpose trusts in Bermuda.

Taxation

Personal

There is no income, capital gains, purchase, sales, VAT, or capital transfer tax. Taxes on property and custom duties may be significant.

Payroll taxes and social contributions should be paid by persons employed in Bermuda, whether locals or immigrants with a work permit. Other taxes are paid upon a particular event rather than for a residence status.

Corporate

No taxes on income, profits, or dividends need to be paid. The main tax imposed on companies is payroll tax. Employers have to pay social security on each employee over 16 years old who works more than 4 hours per week, but half of the amount payable may be directly deducted from the employee. The rates may vary from year to year.

There are land tax, custom duties, and stamp duty, the rates of which vary according to each particular case. Betting tax is 20%, departure tax is USD 20–25 on each departure from Bermuda, and hotel tax is 7.25%.

More Information

Click here for more information about creating a Bermuda Offshore Company.