Bermuda and business. They go together like the sun and the ocean. Bermuda has long been a draw to many global businesses and many notable corporations have registered headquarters on
the island. However, the powerhouse of the small businesses peppered throughout the island should not be underestimated. There is a place for everybody.
Businesses generally fall into one of two categories. The
first group are the aforementioned small businesses that are formed to conduct operations in Bermuda. They operate as local independent businesses, such as the restaurants and shops lining Front Street in Hamilton among many other types of businesses that serve Bermuda faithfully.
This second type of businesses are known as Bermuda Exempt companies and they trade internationally from a base in Bermuda. These include worldwide businesses such as Bacardi and Signet Group PLC (the largest retailers of diamond jewellery in the world). This latter group are businesses that are merely registered and domiciled in Bermuda and usually have headquarters elsewhere. These include banks, financial institutions and insurance companies such as HSBC Bank Bermuda, Orient Overseas, Juniperus Limited.
Bermuda’s main economies are tourism, retail and offshore
insurance/finance. The island also attracts many oil and gas
businesses and international marine companies such as London Marine Consultants and
Overseas-Freighters. Many ships and airplanes also choose to be registered
Bermuda offers attractive financial advantages for international corporate businesses registering on the island. This explains why this small island is home to a surprising number of companies listed on the New York Stock Exchange, including global investment fund-holding companies and around 1,500 companies dealing in insurance and reinsurance.
Bermuda’s International Business Reputation
Bermuda is careful to maintain its reputation and integrity. Because of this, the
island deals only in companies that are proven to be transparent and
bona fide. As a result, the island is part of the OECD
(Organisation for Economic Co-operation and Development) and the
International Monetary Fund, among other exclusive business organizations.
The island operates a strict anti-money laundering program and is careful to preserve its global branding as a safe and secure place to do legitimate business, particularly in the financial sector.
It might come as a surprise but Bermuda is well known in the business world for having excellent fiber optic communications, which makes it prime for e-commerce. However, it strictly forbids any gambling or pornography to be hosted from the island.
Prior to company formation being approved in Bermuda, applicants must
pass a number of background checks. In particular, the capital funding must have a flawless provenance, including any borrowing.
It is important to note that all individuals listed as owners or holding positions within the company are thoroughly investigated before the business registration can be approved. Checks will include both personal and business histories. A clear business plan will also be required as part of the application process, showing the viability and solid financial forecasts of the proposed company.
Advantages of Bermuda for Business
Bermuda attracts so many international businesses of repute because of its stellar economic
stability, advanced e-commerce capabilities, state-of-the-art
communications, flexibility for investment and excellent business
It has state-of-the-art communications and secure IT systems. The lack of currency exchange controls also makes it attractive to companies trading in various currencies and conducting business outside Bermuda.
Then there is the tax consideration. Many people know that Bermuda has long acted as an international tax haven with no
corporation tax, withholding tax or capital gains tax and no capital
transfer tax, inheritance tax or estate duty payable. This is a hard to resist tax system for any business or corporation.
Overall, Bermuda offers an attractive package for international companies. As well as having an advanced legal and regulatory infrastructure, it also has unrivaled access to investment capital.
Geographically, Bermuda has an additional advantage for international
business. Situated between North America and Europe, it operates in
its own Atlantic Time Zone (UTC -4), which is generally four hours
behind London and one hour ahead of New York.
It has daily flights to both continents, making it easy for business owners to maintain a physical presence on the island when required to do so. Bermuda’s position at the crossroads of North and South America and Europe has made it the natural choice for the developing satellite industry, providing tracking stations for both rockets and satellites.
Bermuda is also able to support its unique position as a business hub by having a sophisticated and well-educated workforce.
First Steps in Starting a Business in Bermuda
Anyone considering starting their own company in Bermuda needs to understand the implications and requirements before they begin. Whether you wish to operate as a sole trader, perhaps as an architect, farmer or fisherman, or even as an international corporation, it is essential to read up on the government issued rules that apply specifically to Bermuda businesses.
In order to work in Bermuda, you must be either:
A Bermuda resident
A Spouse of a Bermudian
Hold a Permanent Resident’s Certificate, or
Hold a valid work permit
See our Ultimate Guide to Bermuda Work Permits for more information on how to obtain a New Business or Global Work Permit.
Everyone who works on the island must contribute to a
pension fund and is liable for certain taxes. These include corporate
service tax, land tax, stamp duty and payroll tax, among other minor
How to Start a Business in Bermuda
It usually takes less than seven days to incorporate a new company in Bermuda. It can have one or more directors of any nationality and as few as one shareholder. There are no taxes payable on profits, income or dividends, and no capital gains tax applies. Bermuda prides itself on its speed of incorporation and small private companies can be up and running in a matter of just a few weeks.
Incorporating a Bermuda Exempt company requires that there must be a
share capital of at least US$12,000 or the equivalent in other
currencies. As with all other companies, annual fees will apply.
The incorporation of a Bermuda Exempt Company can be completed in 3-5 days, and again only one director and one shareholder are required as a minimum. The term “Bermuda Exempt” refers to the fact that these companies are exempt from a rule that requires companies to be majority owned by Bermudians. However, at least one of the directors, the company secretary or a resident representative must actually live in Bermuda.
The BMA (Bermuda Monetary Authority) runs careful checks before approving any new company owners. Proposed company owners holding more than 5% of the share capital are required to complete statements of their personal history and provide certified copies of their passports.
The BMA must approve any proposed company name and certain words are
banned. Bermuda companies must have a registered address where the
records and shareholder register are held. It cannot be a P.O. Box.
Bermuda registered companies must also declare a financial year-end and appoint outside auditors. It can operate from bank accounts in Bermuda or elsewhere in the world.
Once the company has been approved, a certificate of incorporation is issued. Usually a company that does not intend to have a physical presence in Bermuda will appoint a local representative/manager to hold meetings, provide directors and keep up-to-date with current Bermudian corporate law.
Local Small Business
Bermuda residents who want to start a business serving the island has a lot of options available to them. The Bermuda Economic Development Corporation (BEDC) is an organization that was started in the 1980s and offers free advice for starting your business as a local as well as offering small business financing.
It is advisable for anyone considering starting a business in Bermuda
to acquaint themselves with all local laws and conditions. It is also
expedient to appoint a local service provider to assist with the
process, such as a Bermudian lawyer, accountant or professional
management firm to ensure that all details are correct.
Before you know it, you could be operating your business in Bermuda, taking in all the island has to offer.