145 web files about the internally self-governing British Overseas Territory of Bermuda in a comprehensive and constantly updated Gazetteer. Accommodation, airlines, airport, apartments, art, aviation, banks, beaches, Bermuda citizenship by Status, Bermuda Government, Bermuda-incorporated international and local companies, Bermudians, books and publications, currency, dollar, causeway, charities, churches, City of Hamilton, commerce, communities, credit cards, cruise ships, culture, cuisine, currency, customs, disability accessibility, districts, Dockyard, economy, education, employers, employment, entertainment, environment, executorships and estates, fauna, ferries, flora, former military bases, forts, gardens, geography, getting around, guest houses, golf, government, guest houses, history, homes, House of Assembly, housing, hotels, immigration, import duties, insurers and reinsurers, international business, internet access, islands, laws, legal system, legislation, legislators, location, main roads, magazines, marriages, media, members of parliament, money, motor vehicles, municipalities, music, newspapers, organizations, parishes (Devonshire, Hamilton, Paget, Pembroke, Sandys, Smith's, Southampton, St George's, Southampton, Warwick), parks, politics, political parties, postage stamps, public holidays, public records, public transportation, railway trail, religions, retailers, Royal Naval Dockyard, St. David's Island, Somerset, Spanish Point, Spittal Pond, sports, taxes, telecommunications, time zone, traditions, tourism, Town of St. George, Tucker's Town, utilities, villages, water sports, weather, wildlife, work permits.
By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online
Bermuda-based AIG, briefly Chartis
Bermuda, not an politically independent country but a self-governing British Overseas Territory not part of the UK's involvement with the European Union, has its own Bermuda laws. They, not UK laws, apply in all business, commerce, financial and socio-economic areas. However, in the event of any legal dispute, ultimate legal appeals may qualify for submission to the UK's Privy Council in London. Bermuda has enjoyed a long tradition - since 1947 - of no Bermuda-imposed income or profits taxes or other taxes such as withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by a non-Bermudian-owned but Bermuda-based international (exempted) company doing business not in the Bermuda market but beyond Bermuda, or its non-Bermudian shareholders. On request, a written guarantee to that effect will be issued to any exempted company, so-called because they are, as companies not operating in the Bermuda market place but solely beyond Bermuda, exempted until at least the year 2035 from taxes that now apply or may one day apply to Bermudian companies. Today, Bermuda is a major International Business Centre, number 1 in the world as an offshore centre for insurance and reinsurance, in the top three for shipping, investment and other services, for administering, controlling and directing companies but is not and never has been a manufacturing centre, due to its very small size (21 square miles in total land area), tiny resident population (only 64,500) and remoteness (600 miles from the nearest mainland. While many of the world's biggest companies are not incorporated in Bermuda, they nevertheless have offices or some other kind of active presence in Bermuda, mostly for tax avoidance reasons. As an international business centre, Bermuda offers a number of tax advantages to international businesses seeking to lessen their operating and taxation costs providing they operate abroad or with each other and are not competing in the Bermuda market place with Bermudian businesses. Bermuda is also a popular location for registering hedge funds as its legislation allows the flexibility needed by this type of fund. Most are aimed at either high net worth individual investors or institutional investors.
2016. Legislation, drawing upon Delaware law, has been approved by MPs in Bermuda to introduce limited liability companies (LLCs). Such vehicles would be broadly similar to Delaware LLCs and therefore familiar to those who currently operate in the asset management space. The Bermuda LLC should allow for consistency across the constitutional documents of onshore and offshore vehicles within a fund structure.
2016. May 4. A United Nations report has found that multinational companies registered more profits in Bermuda than in China, Canada or Germany. The report, published yesterday by UN think tank Unctad, showed that companies from a sample of 26 developed countries booked $43.7 billion of income on the island in 2014. Unctad points out that this equates to 779.4 per cent of Bermuda’s gross domestic product. In comparison, the same group declared $36.4 billion in China, $40.9 billion in Canada and $32.4 billion in Germany, while about $30.4 billion in profits were booked in the Cayman Islands. The report will add to the scrutiny of offshore financial centres including Bermuda from revenue-hungry major economy governments who want the multinationals to pay taxes in the places where they make their money. Astrit Sulstarova, who heads Unctad’s Investment Trends unit, was quoted by the AFP news agency as saying: “How is it possible that in Bermuda you have more profit declared than in China? It seems that there is something that is fishy there.” Unctad found that companies put $221 billion into countries with low tax last year — slightly down from the year before. Luxembourg and the Netherlands, while $72 billion of investment went into two British Overseas Territories in the Caribbean, the British Virgin Islands and Cayman Islands. The top four sources of money going into the BVI and the Caymans between 2010 and 2014 were Hong Kong, the US, Russia and China. The report focused on “special purpose entities”, or SPEs, that have little connection to the local economy in the countries in which they are based, but which are used as holding companies, or vehicles to raise capital. “The proportion of investment income booked in low-tax, often offshore, jurisdictions is high — and possibly growing. The disconnect between the locations of income generation and productive investment results in substantial fiscal losses, and is therefore a key concern for policymakers.” The Organisation of Economic Cooperation and Development has attempted to address this disconnect through its Base Erosion and Profit Shifting initiative, known as BEPS. The European Union has also taken actions to clamp down on tax avoidance practices, which the report found had caused multinationals to take billions of dollars out of Luxembourg and the Netherlands in the last quarter of last year. Unctad said the report’s findings point to the growing emergence of holding companies as major aggregators of multinational companies’ properties. “In the case of Bermuda, the outsize profits of foreign affiliates in the country largely reflect income attributed to investors from the US,” the report states. “According to statistics from the US, the majority of the outward direct investment position in Bermuda is in holding companies, who likely serve to channel investment to other countries as well as aggregate income.” Holding companies accounted for 40 per cent of multinationals’ total quarterly income between 2003 and 2008. This proportion had risen to 52 per cent in the years since 2008. “The growing importance of holding companies is due to a number of factors, including the greater reliance on regional centres to coordinate activities in host countries, but their frequent location in jurisdictions with low tax rates or favorable fiscal regimes suggests that tax motivations play a key role,” Unctad concluded.
All entities are Bermuda-incorporated limited liability companies (corporations) or partnerships with "Limited" after their name but the latter is not shown below. Their areas of business activity are hugely diversified. Bermuda is one of the very few countries in the Western world to require that all business newcomers to Bermuda need a locally registered attorney or firm of attorneys to undertake their work for them, at very considerable expense, instead of doing so directly, at far less cost, to a relevant Government Department. Newcomers need attorneys to incorporate companies, register aircraft and ships, buy and sell real estate and much more. Attorneys in Bermuda are among the world's most expensive.
Why do so many companies shown below from A through Z incorporate in Bermuda (re-incorporation overseas, a process also known as corporate inversion) when they do little or no business in Bermuda? It is primarily because they can lower their taxes hugely, without giving up the benefits of doing business in their home countries and wherever else in the world they do business directly and indirectly. By moving to Bermuda, their income from outside the USA becomes exempt from American taxes. When an American company, by far the most in number in Bermuda, borrows from its Bermuda-incorporated parent the interest it pays creates a deduction that reduces US taxes and there is no tax on the interest earned by the Bermuda-incorporated parent. British, Canadian, Chinese (hundreds of Bermuda-registered companies' names begin with the word China), European, Norwegian, Russian, Taiwanese and other foreign companies and their subsidiaries can claim similar advantages from their Bermuda-based entities, and thousands do. American corporations that have saved millions and/or billions in US taxes over the years by incorporating themselves and often their operating subsidiaries in Bermuda include American International Group (AIG) with many Bermuda subsidiaries; Chevron (with an even greater number of Bermuda subsidiaries); Cooper Industries; Foster Wheeler of New Jersey; Global Crossing, a Beverly Hills, California telecommunications company; Ingersoll-Rand (which, for the under $30,000 a year it pays Bermuda in annual incorporation fees, saves the business over $40 million in US corporate income taxes); Tyco International; Stanley Works, a major Connecticut-based toolmaker (it estimated its tax bill was cut by $30 million a year).
The regulatory environment is exceptionally favorable to them in Bermuda - so much so that many international businesses, including insurers, from all over the world, even in places such as St. Lucia, West Indies, now have their Bermuda-incorporated and Bermuda-based companies as their registered offices and their companies beyond Bermuda as their subsidiaries. Their reasons to relocate to Bermuda are usually stated more reservedly, as corporate inversions arise out of the USA's own tax code (including a vicious corporate federal income tax rate of 35% on most corporate income earned worldwide which puts US companies at a distinct disadvantage and creates an environment in which corporate executives often find it necessary or advisable to search for tax savings wherever available. Similar but somewhat less onerous taxation policies occur in the UK, Canada, China, Russia and other countries, although these countries usually do not follow the US taxation policy of taxing on world-wide income, only on income earned in their own jurisdictions.
The presence in Bermuda of these Bermuda-registered companies, the Bermuda Government fees they pay in return for not having any Bermuda Government taxes imposed on their income or profits and the profits they earn from their often world-wide business including acting a principal insurers in US and other jurisdictions and in major disasters such as hurricanes, typhoons and special risks, is the single-biggest reason, not tourism which lags far behind, why Bermuda, despite its tiny size of only 21 square miles or 58 kilometers, scores so highly in World Bank and related statistics in Gross National Income and other economic indicators.
Advantages do not include no income taxes (because there is an income tax, called a Payroll Tax, payable by employers and employees, based on employment income) but there are few restrictions as to how Bermuda companies can invest their assets and deploy capital, not to mention the island's close proximity to the largest insurance market in the world, the USA. They are presently free to accept contingent commissions, which are payments to brokers from insurers based on the volume of business steered to them. They are exempted from any other direct income taxes, capital gains and other taxes. They are also excepted from Bermuda's domestic company requirements of being at least 60% beneficially owned by Bermudians. They can trade anywhere in the world except as a local company in Bermuda (They cannot write any business for Bermuda residents, only with other international or exempted companies).
In December 2114 the UK became the latest country to take aim at multinational tax avoidance, announcing a new levy on companies that artificially shift their profits into havens, a move prompted by growing international outrage at maneuvers used by businesses including Google, Apple and Starbucks. In his end-of-year statement to Parliament in London, Chancellor of the Exchequer George Osborne said the UK government will introduce a 25 per cent tax on profits generated by multinationals from economic activity here that are moved out of the country. He named no companies. "That's not fair to other British firms," Osborne said. "It's not fair to the British people either. Today were putting a stop to it." The announcement short on details was made as tax planning by big companies comes under increasing scrutiny by global regulators. In September, the Organization for Economic Cooperation and Development set out new proposals to tackle corporate tax avoidance, a project it is carrying out at the direction of the Group of 20 nations. Later that month, the European Commission said Irish tax authorities failed to conform to international guidelines in a tax deal with Apple. Last month, Ireland's government announced it would phase out a tax shelter known as the Double Irish, which has been used by companies including Google, Microsoft Corp and LinkedIn Corp. The UK Treasury singled out that technique today. The UK Parliament has held a series of hearings on techniques used by various companies, including Google, Amazon.com and Starbucks, which have often reported little or no taxable profits in Britain even though they've made billions of dollars of sales. At the same time US President Barack Obama told a gathering of chief executive officers that legislative tax reform should begin with business taxes, ideally lowering rates and closing loopholes. Techniques like the Double Irish first reported by Bloomberg News in 2010 permit companies to collect the bulk of their profits through Irish subsidiaries instead of the countries where they have actual customers. Those units then route those profits through royalties and other payments to a second Irish subsidiary, headquartered in a low-tax jurisdiction like Bermuda. Google, for example, cut its income-tax bill by about $2.5 billion last year, mostly due to such an arrangement. The company paid more than $11 billion in royalties to an Irish unit that lists its headquarters at a Bermuda law firm during 2012. Ashley Zandy, a spokeswoman for Facebook; Hani Durzy, a spokesman for LinkedIn; and a Google spokesperson declined to comment. Amazon spokesman Craig Berman didn't immediately respond to a request for comment. Starbucks also did not immediately respond to such a request. It's unclear how precisely the UK plans to measure the profits that should be properly attributed there. And such a unilateral plan could complicate the OECD's plans to reform the rules for how companies allocate their taxable income around the world.
There are more than 18,000 Bermuda-based-and-hosted exempted or international companies (see Definitions below), 2551 local companies, 420 overseas partnerships and 840 other non residents, many with a global business empire. Most popular international companies in Bermuda are investment holding, insurance, mutual funds, commercial trading and shipping. There are also managers, consultants, insurance brokers, natural resources, etc. There are more than 2,700 registered mutual (investment) funds in Bermuda. These comprise some 2,461 investment portfolios with net asset values totaling in excess of $310 billion. Bermuda has over $110 billion invested in just hedge funds, as one of the world's leading hedge fund jurisdictions.
Exempted or international companies, not being majority locally-owned, are not permitted to carry on local business. However, they may deal with other locally based exempted companies without restriction and may buy their locally needed necessities or services from local companies. Examples are the accounting, banking, legal, management and office supply services they buy locally. Exempted or international companies include subsidiaries of 75% of the Fortune 100 and their European equivalents. Only 235 or 3.4% of the internationals have local offices, yet account for 75% of internationals' spending. In insurance and reinsurance, Bermuda ranks with Lloyds of London and New York as a global leader and in some aspects of specialty insurance, outranks them. There are numerous British-UK insurers who have either moved their domiciles to Bermuda or have substantial subsidiaries on the Island.
In Bermuda, commercial and financial services are regulated by category, for example in insurance, mutual funds, investments, trusts, etc
Because, in furtherance of the above, Bermuda has no exchange control, Bermuda does not restrict capital flows in any foreign currency. Bermuda banks routinely service exempted companies in all their banking requirements and offer accounts in Bermuda dollars, US Dollars and as required from further abroad.
As a long-established international offshore business center, Bermuda can provide significant advantages to companies and corporations and partnerships. British UK, US, Canadian and corporate entities from around the world incorporate in Bermuda and use their Bermuda entities to own or control or manage their operations even in their head offices in other parts of the world and/or pay their management and staffing costs in salaries and/or bonuses, while avoiding often heavy taxes in their own countries. The tax authorities in the USA and Britain in particular fail to have the proper corporate tax incentives of their own to keep these corporate entities in Bermuda and place no objections to offshore jurisdictions like Bermuda applying tax-haven-like advantages, but do not hesitate to apply often very vicious tax penalties to individuals who seek the same advantages, with their FACTA-like curbs and restrictions.
Newcomers to Bermuda's corporate scenario, whether entrepreneurs establishing their Bermuda-based entities or their employees both Bermudian and non-Bermudian, like having only half an hour to home or office, golf courses and beaches. Regulatory agencies cannot divulge information. Expatriates have freedom from foreign anti-trust laws. They are not subject to currency control. Unlike Bermudians, they can deal in any currency with any bank local or anywhere and freely transfer funds.
They all have "Ltd" in their official corporate name. Advantages do not include no income taxes (because there is an income tax, called a Payroll Tax, payable by employers and employees, based on employment income) but there are few restrictions as to how Bermuda companies can invest their assets and deploy capital, not to mention the island's close proximity to the largest insurance market in the world, the USA. They are presently free to accept contingent commissions, which are payments to brokers from insurers based on the volume of business steered to them. These factors, along with the current favorable market conditions, have contributed to the robust financial performance of the Bermuda insurance and reinsurance market. They are exempted from Bermuda's domestic company requirements of being at least 60% beneficially owned by Bermudians. They can trade anywhere in the world except as a local company in Bermuda (They cannot write any business for Bermuda residents, only with other international or exempted companies).
2016. April 1. A new law to create a public register of directors comes into force today. Government amended company law to create the register to stay in line with US Financial Action Task Force rules. The new law means every company registered in Bermuda has to file a list of its directors with the Registrar of Companies and notify any changes within 30 days. While the amendment to the Companies Act 1981 takes effect today, firms have until the end of the year to comply. The Registrar of Companies is working on a new electronic platform so directorships can be logged online. Information on directors must include name, and address for individuals and the name and registered office in the case of companies. The Registrar of Companies will maintain the register, which will be available for public inspection, subject to any conditions the Registrar might impose and a fee. Offshore law firm Appleby yesterday sent out a reminder of the change in the regulations. Managing partner Timothy Faries said that the information was already publicly available, but not at a single site. And he added it was unlikely to deter people from holding multiple directorships. Mr Faries said: “Having it with the Registrar makes it slightly easier for the public but it has no impact on people being able to serve on numerous boards.”
2016. January 15. The Bermuda Monetary Authority (BMA) last year registered 64 new insurers and reinsurers — one down on 2014. A total of 22 of the new companies are limited purpose insurers or captives, six up from the 16 registered the previous year. Shelby Weldon, director of licensing and authorizations at the regulator, said: “Registration of captives is on the increase because they not only reduce insurance costs but are important components of the parent companies’ burgeoning risk management programmes.” He added that captives registered in the last six months of 2015 covered a range of risks, from oil and gas drilling in Canada to drivers’ insurance in Peru. Mr Weldon said: “It is encouraging to see continuing registrations from Canada and Latin America, as these regions have been targeted by Bermuda’s business development efforts.” But he said the US is still the biggest source of captive formations for the second half of last year. Bermuda captives remain out of the scope of the EU Solvency II supervisory rules, which only apply to the Island’s commercial insurers, reinsurers and insurance groups. The BMA registered 13 new commercial general business insurers and reinsurers last year, compared with 11 in 2014. Long term life insurance and reinsurance companies recorded nine new entries to the market, the same as the year before. Among the new life insurers and reinsurers is a Chinese firm designed to reduce the cost of cancer treatment in the country. And a total of 20 special purpose insurers were registered in 2015, down eight on the 2014 total. New asset management funds totaled 83 last year, up slightly from the 80 logged for 2014. Last month saw a total of 11 new registrations in insurance and reinsurance.
Some preliminary information will be helpful. Also, see below, "Applying for a Bermuda-incorporated company."
In Bermuda, all applications for incorporation for either type of corporate entity must be made through a Bermudian law firm - attorney's office. There are quite a few bigger and smaller law firms from which to select. Expect to pay about $600 per hour. They all have websites and a variety of information for new and existing clients.
To have a client or clients in the Bermuda market place, a Bermuda local company, not an international one, will apply. It has to be by law at least 60% beneficially Bermudian (not just someone living in Bermuda but someone who has local nationality, ie Bermudian in addition to being nominally British) owned and managed.
For overseas (not Bermuda market place) clients and dealings, but can sell from Bermuda to clients beyond, an international or exempted company is the vehicle. It does not have to have any Bermudian ownership or management.
But in either case, if management and/or staff are not Bermudian, a Work Permit for each non-Bermudian employee will have to be applied for, at some cost. See http://www.bermuda-online.org/employwp.htm.
Bermuda does not have a direct tax on individual non-employment-rated personal income but levies an employment tax on all employers.
Note that Bermuda-based corporate entities cannot claim any Bermuda tax deductibles on any Bermuda or foreign expenses incurred in setting up or running the Bermuda entity.
Bermuda costs of staffing are appreciably more than in the USA. Cost-of-living is about 380% more than in the USA overall. Economies of scale are not possible here in this 21-square mile island.
Entrepreneurs hoping to set up a Bermuda-registered exempted or international company - one that may not trade or offer any of their services in Bermuda with Bermudians, only with other international or exempted companies - use Bermuda as a base for their international operations. But before doing so, they have to give the Bermuda Monetary Authority detailed questions about their identities and business. They mist list all ultimate, direct and intermediate owners of their proposed company and every individual intending to own at least 5 percent of a company must complete a Personal Declaration (PD) form with their full name, spouse's name, residential address, country of citizenship, passport number and date of issue, date of birth, place of birth, occupation and present employer. They are also asked about their interests in other Bermuda companies, any involvement here or abroad in any bankruptcy proceedings, any criminal offences here or abroad involving fraud or dishonesty. In Bermuda and in any other location where they may be represented as well, their service providers - accountants, lawyers, management consultants, Internet Service Providers, their directors, managements and company secretaries - must also be covered by the "know your client" rule. If they don't get honest answers, they must refuse to act for questionable clients.
Confidential background checks occur. Officials see credentials of corporate applicants. They cooperate with with law enforcement agencies overseas. This is to weed out fugitives from justice, those who evade (as opposed to avoid) taxes in their own countries, money launderers, or others who could be embarrassments. Regulations are in place that help the United States of America find its tax evaders, an extension of the USA and Bermuda Tax Treaty of 1986 subsequently renewed.
Corporate advantages include:
Note: (a) these are for "exempted" or international companies. These fees are what are paid by the companies concerned to the Bermuda Government but many companies may find their costs may be much higher if they use their legal advisor to pay their annual fees on their behalf. Where the assessable capital (namely, in the case of a joint stock company, its authorized share capital and share premium account; in the case of a mutual company, its reserve fund; in the case of a mutual find, its authorized capital) is:
|When Assessable Capital is:||Annual Fee per company is|
|$500,000,000 or more||$31,120|
Also note the fee for year of incorporation is reduced by 50% if the company is incorporated after August 31.
Shell was also the first to operate a corporate administrative structure for a collection of affiliated international companies outside the City of Hamilton, at Ferry Reach in St. George's Parish. Interestingly, the only other organization today with a similar clutch of international companies also in this Parish is its competitor, Esso Bermuda, with the Exxon group of companies also based at its Ferry Reach head office just down from the Shell building.
See http://www.bankofengland.co.uk/about/Documents/mous/mou_bermuda.pdf. However, there are certain conditions attached, viz: The Bermuda Monetary Authority (BMA) shall submit to the Financial Services Authority (FSA) in England in the UK an annual self-assessment report covering authorization and supervision of recognized schemes within its territory. This report must include at least the following:
An overview of the reporting period.
Details of recognized schemes in operation during the reporting period
New recognized scheme applications received during the reporting period
Recognized scheme amalgamations, applications to terminate authorization, terminations, amendments and transfers occurring during the reporting period
New Managers and trustees of recognized schemes (including promoter)
Material guidance and waivers given to recognized schemes
Supervision visits given during the reporting period
Material administrative or financial sanctions or fines imposed against recognized schemes and any manager, authorized corporate director, trustee, depository, fund advisor or administrator of any such scheme, and
Future proposals to amend legislation which might impact on the operation of recognized schemes.
The self-assessment report must be produced annually, covering a 12-month period 1st June to 31 May. The FSA would expect to receive the report no later than 12 weeks after the end of the reporting period. The FSA will send to the BMA a response to the matters contained in the report.
It was also noted The FSA will carry out an inspection in Bermuda every five years or earlier if necessary, with the BMA to cover the costs of hotels, transportation, food, etc.
However, no UK laws apply in Bermuda to Bermuda-registered companies.
These supplement the TIEAs already signed with USA, UK (see above), etc. The tax information exchange agreements are part of a joint campaign by the parties to stop tax evasion and will enable the authorities to access information about anyone seeking to evade payment of tax on income and capital investment and help disclose assets that have not been reported in their home country. Information to be exchanged includes information on beneficial ownership of companies in the whole ownership chain; settlers, trustees and beneficiaries of trusts, and information held by banks and financial institutions. The process will enable tax authorities in Bermuda and all the countries mentioned above to access information about tax evaders and disclose any assets not reported in their home country. Bermuda has received recognition from the Internal Revenue Service (IRS) in the USA and from the UK for its efforts to get onto the Organisation of Economic Cooperation and Development (OECD) "white list."
Bermuda-based but USA-owned or USA-operated companies can sue or be sued in the USA following a US Supreme Court ruling. Also, from 2003, if relocating to Bermuda from the USA or owned by US investors, they may face capital gains taxes in the USA.
But Bermuda is NOT a no- tax zone. Indirect taxes and a direct employment (payroll) tax on an employee's salary of any rank, usually paid in part also by an employer make the cost of living about about 3.8 times more than in the USA and 2.8 times more than in Canada, United Kingdom or Ireland.
Hosts an annual life and annuity conference at the Fairmont Southampton Princess Hotel. Industry chiefs from Europe and North America join Bermuda-based executives. 2015's conference focused on the EU Solvency II regulations, which come in to force from 2016 and Bermuda’s ongoing work to comply with the new rules. Other highlights include a presentation by the president of the Society of Actuaries, which has more than 25,000 members in 78 countries. Special sessions will also look at “the future of living longer” and panel discussions featuring industry leaders. BILTIR was set up four years ago to serve as an advocate for the long-term insurance industry.
2016. June 28. Legislation paving the way for the creation of a Civil Aviation Authority and a Bermuda Shipping and Maritime Authority was passed by MPs on Friday afternoon. The Bermuda Civil Aviation Authority Act 2016 provides the new CAA with quango status in a bid to boost revenue from the Bermuda Registry of Aircraft. Grant Gibbons, the Minister of Economic Development, told the House of Assembly that the new Act would make Bermuda more competitive in the global aviation market. However, Lawrence Scott, shadow Minister of Transport, expressed a string of concerns about the creation of the CAA, claiming the Bermuda Government was making the CAA answer to the minister. He also questioned why the Minister of Finance should be involved in appointing members of the board. “Government should not have any say over civil aviation,” Mr Scott said. “They are trying to go outside their jurisdiction. This Bill falls short of doing what it is intended to do because the Government is too involved compared to other jurisdictions.” However, One Bermuda Alliance MP Shawn Crockwell explained that Bermuda’s CAA would be based on the UK’s CAA model, in which the authority answered to the Ministry of Transport. Mr Crockwell described Mr Scott’s assertions as “erroneous” adding: “We must put in the proper infrastructure so the authority and the register can grow. The register must operate like a business and Government must be prudent to make sure we do not lose this revenue.” Finance minister Bob Richards told the House that the new legislation was designed to boost revenue to the consolidated fund. Meanwhile, the Bermuda Shipping and Maritime Authority Act 2016 will see the Department of Maritime Administration also given quango status. Dr Gibbons said the Bermuda Shipping and Maritime Authority will help the island compete more effectively in the growing shipping sector. “This Bill is intended to create an efficient, competitive and economically viable shipping registry that can meet the modern-day customer demands as well as the relevant national and international standards,” he added. According to Dr Gibbons, Bermuda presently commands a fleet of 170 ships with more than 13 million gross tonnes. “The revenue earned by the DMA as fees from the registration of ships and other services provides is approximately $5 million annually with a net surplus of nearly $3 million annually.” But compared with other international registries, Dr Gibbons said Bermuda’s tonnage “is rather small, which provides the DMA great opportunity for expansion. With the proposed amendments in this bill, the DMA believes they should be able to compete more effectively and enhance Bermuda’s shipping opportunities. After a number of difficult years, the global economy is now slowly growing and the shipping sector is expected to grow at a rate of 5 per cent per annum. Bermuda needs to be ready to compete and get a fair share of this tonnage.”
See Bermuda Shipping Register
P&O's large cruise ship Arcadia, registered in Hamilton, Bermuda, one of a huge number. All the P&O, Cunard and Princess vessels are also now registered in Bermuda.
Bermuda has had one of each for many years. Because Bermuda has long had an extremely well-developed and successful legal framework for the formation and development of companies, partnerships and trusts and because of them enjoys a good reputation as a successful, credible offshore financial services centre with regulatory integrity, it has also become a favored jurisdiction to register all types of ships and tankers including cruise ships. The Bermuda Shipping Registry, for ships registered in Bermuda, has high internationally accredited standards. The registration process is such that, once surveys of the vessel are completed and the original application is received, registration can usually be processed within a matter of days. Ships registered in Bermuda are “British ships” and fly the undefaced Red Ensign. All such Bermuda-registered ships, including cruise ships are entitled to the worldwide protection of the Royal Navy, of particular interest to cruise lines operating in multiple regions. Cruise ships registered in Bermuda are also able to offer legally valid wedding ceremonies, one reason some have re-flagged their vessels in Bermuda, to take advantage of the at-sea wedding market.
2016. June 17. Bermuda was represented at the world’s largest shipping conference, held in Greece. The island’s ship register was showcased at Posidonia 2016 at the Metropolitan Expo, held in Athens. The four-day conference attracted an estimated 20,000 attendees including ship owners, brokers, bankers and investors who converged to discuss the future of the shipping industry. Bermuda was taking part for the first time and was represented by the Bermuda Business Development Agency, together with Bermuda Government and industry colleagues. The island’s shipping industry, including the jurisdiction’s historic British Red Ensign Group vessel registry, proved to be of interest to conference attendees, as was the island’s hosting of the 2017 America’s Cup. “We had an extremely successful experience as a first-time exhibitor at this event,” said Kevin Richards, a BDA business development manager. “Attendees sought out our booth to meet with our experts and learn more about the Bermuda Ship Registry and the benefits of company incorporation in our blue-chip financial centre — as well as to find out how to get to Bermuda for next year’s America’s Cup. The ability to connect with the entire shipping value chain separates Bermuda from our competitors. Our strong financial foundation makes our jurisdiction favorable to banks and financiers when leveraging an offshore facility in a new building or ship-financing transaction. Our leading regulatory standards also make Bermuda an attractive option for residency and trust incorporations for high-net-worth individuals connected with this industry.” Mr Richards was joined at the event by Edward Robinson, Registrar of Shipping with the Department of Maritime Administration, and London-based DMA senior marine surveyor Chris Boreham. Also attending was Victor Richards of Conyers, along with Nicole Conrad Morrison and Sophie Burt, of the BDA conferences and events team. Bermuda’s ship registry is a Category 1 member of the British Red Ensign Group, supporting a worldwide portfolio of vessels, including large cruise ships, oil, gas and chemical tankers, container ships, bulk carriers, offshore vessels, cruising and megayachts. Ships or yachts registered in Bermuda fly the red ensign, or the red ensign with Bermuda’s coat of arms. Other members of the REG include the Isle of Man, Gibraltar, Cayman Islands, British Virgin Islands, Guernsey, Jersey, Anguilla, Turks and Caicos, Falkland Islands, St Helena, Montserrat and the UK. Pre-conference activities at Posidonia allowed the Bermuda team to network with key companies. Organizers staged a sailing race, a running event and golf and soccer tournaments. Mr Richards, a former Bermuda national team player, took part in the latter, joining the “Shipsoccer” team of global accountancy firm Moore Stephens. The team went undefeated during group stage, but lost out in the quarter finals. “We were able to solidify key relationships with senior leaders of major shipping companies,” said Mr Richards, who will attend the 29th annual Marine Money Week in New York City starting on June 21. That event is one of the world’s largest gatherings of the international ship-financing community, attracting more than 1,300 leading ship owners, private- and public-equity investors, and commercial and investment bankers. He said: “Our agency looks forward to working with new and existing partners to continue to grow the shipping industry in Bermuda.”
Bermuda is required by the United Kingdom to recruit, at Bermuda Government and therefore Bermuda taxpayers' expense, enough of the highly specialized professionals required for the two registers. Members of the Red Ensign Group — those shipping registers authorized to fly the British flag — must maintain enough in-house shipping surveyors to conduct at least 90 percent of critical safety management inspections of their ships. Bermuda’s complement of qualified ship surveyors must be sufficient to meet 100 percent of the ship inspection requirements, in order to meet international standards. The two businesses are highly profitable for Bermuda. The UK’s Maritime and Coastguard Agency audits Bermuda Department of Maritime Administration (DMA) every four years. Bermuda's Shipping Registry functions as a Category 1, Red Ensign Group Register in accordance with the agreed REG policies. As a category one register, the Island can register vessels of any size or type, but staffing requirements are dependent on the number of ships of various categories on the register. UK authorities could impose limits on the number of ships in Bermuda’s fleet — thwarting plans to expand the business — if the issue is not addressed. A merger between the DMA and Bermuda's Department of Civil Aviation (DCA) is not deemed appropriate. The shipping and aviation registers are serious cash cows for Government. Each of them earns about double the costs of operation and there’s promising growth potential. In early 2013 Bermuda has four full time ship surveyors, compared to other members of the Red Ensign Group like the Isle of Man which has 17, and the Cayman Islands and Gibraltar which have ten each. Of Cayman’s ten surveyors three are based there, six in the UK and one in Greece. A net revenue earner for the Island, Bermuda’s register is expected to cost just under $2 million to operate and rake in over $4 million in the 2013-2014 fiscal year. The Bermuda Ship Register then had 168 ships — 28 passenger ships, 44 Gas Tankers, 16 Oil Tankers, seven Chemical Tankers, 29 Bulk Carriers, 16 Container ships, and another 28 other types of ships. Another 258 yachts are registered here — 14 large commercial yachts and 244 pleasure yachts. In comparison, 1,900 vessels fly the Cayman Islands flag.
Bermuda has a fine three-year safety record, according to a leading European port state control organization. The Paris MoU rates registries each year, based on the number of inspections and detentions in a rolling three-year period. It uses a three-tier classification, a white list for the safest, a grey list for those with average track records and a black list for those considered to carry medium or high risk. The white list of 42 registries for the 2008-2010 period was topped by Bermuda, which recorded 270 inspections and zero detentions. Second-placed Germany had 1,388 inspections and 14 detentions. Sweden, the UK, the Netherlands, France, Denmark, Finland, China and the Isle of Man made up the rest of the top ten. Bottom of the table was North Korea, just behind Libya, Togo and Sierra Leone. Bermuda's international fleet includes many of the world's top cruise ships. In addition to Bermuda-registered ships of all types and sizes from cruise ship to cargo and tanker ships there are also super-luxurious yachts, including the mega yacht Golden Odyssey. Bermuda is part of the Red Ensign Group of shipping registries. The UK's Maritime and Coastguard Agency (MCA) usually gives the Island's Department of Marine Administration and the Department of Marine and Ports a glowing endorsement after they visit. The MCA regularly monitors the Red Ensign Group shipping registers of the UK Overseas Territories and Crown Dependencies to review the quality and standards.
“Seamen” in Bermuda are now known as “seafarers” — and rules for their pay, food and medical care by ship owners have been tightened, under Bermuda laws. In 2012 Bermuda was brought into line with the International Labour Organization’s 2006 Maritime Labour Convention, by Bermuda's Merchant Shipping (ILO) Amendment Act, 2012. Under the legislation, Bermuda’s training of ship inspectors has been augmented by the UK Coast Guard. Inspection work is usually carried out locally — but outsourced when there is too much work to be done.
The Bermuda Civil Aviation Authority operates Bermuda’s Aviation Register (BDCA).
2016. October 11. Bermuda’s aircraft registry could expand even further — increasing the $27 million a year it already collects from clients. Thomas Dunstan, director of the new Bermuda Civil Aviation Authority, said: “It’s a very significant revenue stream for the Government. And there is potential for growth as well — the Government sees this as a good venture to be in as far as diversity of our economy goes.” Mr Dunstan was speaking after he delivered the keynote address at the Offshore Aircraft Registration Summit, held at the Hamilton Princess yesterday and today. Mr Dunstan said that the island, with 750 aircraft on its registry, was the tenth largest in the world. He added: “As we grow, 750 aircraft on our register is a significant number. The US has thousands of aircraft on its registry, from small two-seaters to commercial aircraft, but it’s quite significant for a jurisdiction like Bermuda. It could be as big as Bermuda wants it to be if we invest in it.” But he warned: “The more aircraft we have, the higher the risk of accidents, which have a detrimental effect on our credibility.” He added that playing host to the conference, the sixth of its kind and the first time it has been held in Bermuda, was a positive for the island. Mr Dunstan said: “It’s worthwhile for Bermuda to have this here — we’re a huge player in aviation globally and to hold this in Bermuda is good because it brings people to the island and also highlights we are one of the leaders in this industry.” The conference, held at the Hamilton Princess, attracted around 100 delegates from the UK, US, the Caribbean and Europe. Mr Dunstan said: “Even though we are seen as competitors, we also need to be discussing issues and challenges and these are things we all face. We have to ensure that safety is paramount because an accident in one jurisdiction could affect us all.” Earlier, Mr Dunstan told delegates that Bermuda’s aviation history dated back to just after First World War, when a visiting US Navy ship flew its plane over the island. He added that the conference was particularly exciting as it marked a change from Government’s Department of Civil Aviation to the arms-length quango of the Bermuda Civil Aviation Authority. Mr Dunstan said: “We need to be able to react and be proactive with the environment we work in. The great thing is we are able to reduce expenditure by coming out of the Government ... but we are also able to give some revenue back to the government.” He added that more than 80 per cent of the fleet of planes registered in Bermuda were commercial aircraft that operate elsewhere in the world. The Bermuda registry has a satellite office in London, as well as a network of qualified inspectors it can call on around the world. He said: “By having inspectors globally, it allows us to be more responsive to our clients and reduce costs.” And he added that aircraft owners and companies that leased them found that resale values were maintained by having aircraft registered in a jurisdiction that has “a solid reputation for being safe and well-regulated”, while Bermuda could also offer tax advantages and was backed by the respected UK Air Accidents Investigation Branch, which carried out probes on behalf of Bermuda. Mr Dunstan said: “We are customer orientated, responsive and pragmatic with a lot of experience. But we must not let the opportunity for profits affect our judgment and decision-making. We must retain the good reputation of our offshore registries and the benefits they bring to global aviation — and there are many.” Michael Dunkley, the Premier, opened the conference and said: “We are seen, in my opinion, as one of the leading aircraft registries in the world and that is an impressive feat for Bermuda.” He added that air travel was closely linked to Bermuda’s other industries of international business, financial services and tourism and was crucial to the economy. Mr Dunkley told delegates: “We see this as a necessary and timely conference because we believe there is significant value in us working together to not only grow and develop this important industry sector — but to find mutually beneficial opportunities to further our success.”
The island’s registration marks are seen as neutral and “low profile”, while also recognized as high standard and internationally accepted for both commercial and private aircraft. Unlike in the USA, where all US-registered aircraft have an N mark, Bermuda registration is seen as being less obvious. Many jurisdictions including the USA maintain a log of registrations, which is easily accessible, plus flight details, while the Bermuda registry, unlike its registry of companies, is not available to the public. In certain jurisdictions, you can go on to the internet and you can get all the information about who owns the aircraft. Members of a British or other aircraft-owning or leasing Royal family or other high-net-worth individual worried about kidnapping or being shot down and all the publicity this would generate do not want that known, so they register their aircraft holdings in low-profile Bermuda. Members of the British Royal Family are believed to have done this. In mid 2016 there were around 770 aircraft registered with Bermuda’s VP-B and VQ-B marks, with 135 of those registered private aircraft. In Bermuda, the name of the company in which the aircraft is registered only appears on the certificate of registration, however this information is not publicly available on the Bermuda Department of Civil Aviation website. The Bermuda register and the certificate of registration issued in respect of the aircraft will record certain descriptive particulars relating to the aircraft, the date of its registration and the name of the company in which the aircraft is registered. All other records relating to the owner and the aircraft are treated in confidence by the BDCA. The biggest growth in registrations in recent years had come from Russia and former republics of the Soviet Union. Lenders for aircraft purchases are more comfortable with a stable legal system and financial regulation of Bermuda compared to other jurisdictions. Also, aircraft maintenance logs for Bermuda=registered aircraft are in English, which helped with resale value. The Cape Town Convention, designed to provide an international legal framework for the financing and leasing of items like aircraft and aircraft parts like engines and airframes, and acknowledged in July 2016 by the Bermuda Parliament and Senate, would help Bermuda remain a high flyer in the aircraft world. Bermuda will continue to be used as a centre for financing. For big banks, they want the certainty about their financial interests that comes with the Cape Town Convention. There are 71 signatories to the convention — if Bermuda was not a party to it, it would be seen as a disadvantage compared to other jurisdictions.
The BDCA is rated as a Category 1 Aviation Regulatory Authority by the US Federal Aviation Administration. The Bermuda registration marks VP-B and VQ-B with two subsequent letters are seen as neutral marks of high standard. Aircraft are registered in either the private or commercial categories. It is easier for Russian airfraft to register it here than in the US because Bermuda's registry is not as big, the wait is not as long; and the reason they buy older planes is they have to pay a hefty duty on any foreign built aircraft, so the older the plane the less the tax. Many of the small airlines who register aircraft here buy older planes for the first few years of operation while they build their company and then trade up to newer models. Bermuda has an aged aircraft program in place for all aircraft older than 14 years. They undergo more scrutiny and maintenance. The Bermuda program is similar to what the US Federal Aviation Association has in place.
Aircraft over Bermuda
The group is made up of insurance and reinsurance industry professionals who have all obtained, or are on the path to obtaining, the Chartered Property Casualty Underwriter professional designation.
Information from the Bermuda Stock Exchange
There are clear distinctions between companies owned by Bermudians and operating in the local marketplace and "exempted companies" not owned by Bermudians and not operating in the local marketplace. Exempted Companies and Partnerships - otherwise known as International Companies, Continuation or Permit Companies and Partnerships - are international because they:
Most focus on international activity. To protect local business interests, the Bermuda Government will not normally allow the formation of an exempted company in banking. However, some quality international banking organizations may, under certain circumstances, apply to form an exempted company for international or multinational general trust, investment and executorship activities. By qualifying as exempted companies, these corporate entities are not subject to any restrictions on foreign ownership. They can be either 100% owned by non-Bermudian interests or anywhere from 100% to 80%. Bermudians cannot hold more than a combined 20% interest in any one exempted company or partnership.
This will change wholly or to some extent from later 2016 or 2017 when certain upmarket local hotels are given a license by the Bermuda Government to operate casinos. Then, least a trio of major hotels present or planned will be licensed by the Bermuda Government to operate casinos for non-local guests. But for the last 400 years Bermuda deliberately has NOT allowed businesses in online or offline gaming or gambling businesses, except for the game of Crown and Anchor, stacked in the dealers' favor, at annual local Cup Match games. Other jurisdictions that do allow gambling have profited hugely from it though, so much that the Bermuda Government now allows visiting cruise ships, previously denied access by their passengers and crew to their casinos while in Bermuda waters, to open their casinos to cruise passengers on those ships.
Non-Bermudians, including Bermuda-domiciled permanent residents present and future, should note local companies or any other type of local trading entity must, as a general rule, be beneficially owned by Bermudians. The 60-40 rule explained in more detail later on applies to all forms of local business, whether sole proprietorships or working on a consultancy basis. Such entities operate in the local marketplace and as such are NOT "exempted" or international companies. Their legal requirement is that they must be at least 60 percent beneficially both owned and managed by Bermudians, meaning that non-Bermudians, including all those born in Bermuda but with neither parent being Bermudian and all non-Bermudian registered permanent residents including those married to Bermudians who have lived in Bermuda and been married to and living with that Bermudian for less than ten years and have not yet been given Bermuda Status, are limited to a maximum of both an individual and a collective 40% holding. To avoid non Bermudians controlling local companies through pyramiding or secret agreements, corporate shareholders of local companies must themselves be 80 percent owned by Bermudians to qualify as Bermudian owners. They include local accounting, banking and legal firms and support services. However, of late there have been some notable exceptions to this 60-40 rule, namely in banking, where neither of Bermuda's two biggest banks are majority Bermudian in terms of overall shareholding or management; similarly in telecommunications, and more.
Non-Bermudians, specifically including registered Bermuda-domiciled permanent residents should note that while this 60-40 rule applies to them as it relates to all local market trading enterprises, it does not apply in the case of non-local, in other words, international entities. They may become minority (up to but no more than 40% individually or collectively per company) managers of a local trading entity, subject to Bermuda Immigration work permit approval. They may incorporate, or manage, or have an investment interest in, without any such 60-40 restriction, a Bermuda-based but overseas-dealing international company or any other non-local business entity. Presently, there is no website that lists all the eligible forms of business and the laws for PRC holders in terms of conducting business in Bermuda.
Some examples were, in 2015:
Wellesley House, 2nd Floor — 12,831 sq. ft. Asking rent from $60 per sq ft per annum, with Service Charge $23 per sq ft per annum.
IAS Park Building, 1st Floor — 10,000 sq ft. Asking rent from $33 per sq ft per annum, plus Service Charge (including Electricity and Bermuda Government Land and Corporation of Hamilton Taxes) of $16.51 per sq ft per annum.
The traditional, and the most frequently used, method for an overseas company to establish a presence in Bermuda is to do so by incorporating a Bermuda subsidiary. But there is an alternative, a Permit company. Normally, an overseas company — a body corporate incorporated outside Bermuda — shall not engage in or carry on any trade or business in Bermuda. However, in some circumstances, it is possible for an overseas company to trade in or from within Bermuda, provided it obtains a permit (“Permit”) issued by the Minister of Finance (“Minister”) under the Companies Act 1981, as amended (“Act.”) Overseas companies can apply for a Permit where it is not necessary or expedient to establish a new Bermuda company. Overseas companies often apply for Permits, rather than following the more traditional method of incorporation, to form insurance branches, insurance intermediaries — or to form a hub for such diverse uses as acquiring, developing, exploiting and licensing intellectual property outside Bermuda from within Bermuda. The application procedure for an overseas company to obtain a Permit is relatively quick — normally taking three to five days to complete — and is based loosely on the procedure relating to the incorporation of an exempted company in Bermuda. There are various specific requirements that are not generally required on an incorporation — for example, the intention of an overseas company to apply under the Act to become a permit company (“Permit Company”) must be advertised in a local newspaper and such advertisements should specify the company’s name and the trade or business that it proposes to engage in or carry on in Bermuda. The application must include the name and address of its proposed principal representative in Bermuda, who is a statutory officer required under the Act, and of its proposed local bankers (if any). Documents required in support of the application include certified copies of the company’s constitutional documents, its latest audited financial statements and, where appropriate, personal and financial references for the directors and beneficial owners of the company, which will provide the prescribed particulars of the company. The Permit Company will be subject to such conditions as the Minister may think fit to impose and such conditions will be specified in the Permit. For example, a Permit may require that the company have one or more directors ordinarily resident in Bermuda. A Permit Company is usually required to inform the Minister of any change in its beneficial ownership. Any application for a Permit must also disclose the reasons for the overseas company seeking to obtain a Permit as opposed to incorporating an exempted company. Overseas companies obtain a Permit for a number of reasons — some of the reasons given, which the Bermuda Monetary Authority has approved, include that it is more efficient for the mind and management of a company to operate outside of its home jurisdiction and in Bermuda; Bermuda’s favorable business and economic environment and the stable and efficient regulatory framework of Bermuda; Bermuda’s reputation as a leading jurisdiction for (re)insurance business and its favorable regulatory regime. In such instances, such companies often give the reason of using their branch to source business through Bermuda; Bermuda’s sovereign rating; and that the overseas company is required to be licensed as an insurer or insurance intermediary in more than one country, for various reasons relating to the overseas company’s home jurisdiction. An overseas company will also be required to obtain a Permit if it is deemed to be carrying on business in Bermuda either by the overseas company or on its behalf. As a general matter, the issue of whether an overseas company requires a Permit is a question of fact to be determined in the light of those activities that are, or are intended to be, carried on by or on behalf of an overseas company, in or from within Bermuda. Once a Permit Company has been established, it will be carrying on its business and will only be permitted to do so in the same manner as an exempted company, ie outside Bermuda from a place of business within Bermuda or with other exempted undertakings. A Permit Company is also subject to many of the same provisions of the Act as an exempted company. In addition, those Permit Companies that are registered as an insurer or as an insurance intermediary or other regulated entity in Bermuda — either under the Insurance Act 1978, as amended, or otherwise — will be subject to the same regulatory regime and scrutiny as exempted companies registered in the same manner. While generally, it is more likely that an overseas company will wish to form an exempted company in Bermuda, it is worth considering establishing a Permit Company as an alternative. Ultimately, many of the reasons for obtaining a Permit are similar to those supporting the incorporation of a subsidiary in Bermuda: to take advantage of Bermuda’s favorable business and economic environment and the stable and efficient regulatory framework of Bermuda. However, the main differentiating feature is where an overseas company considers that it is not necessary or expedient to establish a new Bermuda company.
Maintained by Bermuda's Registrar of Companies with only very basic details (name of company, date of incorporation and ID number) freely available to the public.
2016. April 11. Bermuda is to share its register of ownership of companies with the UK’s National Crime Agency. Michael Dunkley, the Premier, said Bermuda already shares information on beneficial ownership with Britain’s tax authorities within 24 hours of a request — but had agreed to extend access. Mr Dunkley said the move reflected “Bermuda’s long-held commitment to deterring money-laundering and financial crime from our shores”. He added: “The NCA has always had access to Bermuda’s central register via its longstanding criminal co-operation arrangement, but this involved certain time-consuming procedures. The new agreement notes that the NCA can now directly approach the Bermuda central register authorities, who maintain the register on behalf of the Minister of Finance, and includes expressed reference to our leading status as the only British Overseas Territory to have a continually updated central register already in place.” The move follows a request earlier this month from the NCA for faster access to ownership information in the wake of the release of the massive leak of millions of pages of law firm documents contained in the Panama Papers. Bob Richards, the finance minister, said then that British police officers were frustrated by delays which could stretch to months in getting information. He added that the NCA wanted urgent requests to be met within an hour. UK Prime Minister David Cameron said yesterday that most UK Overseas Territories, including the Cayman Islands and the British Virgin Islands, would now share information on company ownership there with the British authorities to cut down on possibilities for tax avoidance. He added: “For the first time UK police and law enforcement will be able to see exactly who really owns and controls every company incorporated in these territories — Bermuda, Isle of Man, Jersey, the lot.” But Mr Cameron said he does not believe most UK MPs should be forced to make their returns public. He explained: “We should think carefully before abandoning completely all taxpayer confidentiality in this house as some have suggested. I think there is a strong case for the prime minister and the leader of the opposition, and for the chancellor and shadow chancellor, because they are people who are or who wish to be responsible for the nation’s finances.” Mr Richards has pointed out several times in international forums that Bermuda — unlike other offshore jurisdictions — had held a register of beneficial ownership for about 70 years. And he added that the register, although not public, was open to overseas authorities investigating allegations of crime or tax evasion.
Only certain officials of the Bermuda Government have access to the above. It is not available to the public.
Effective March 24, 2016. This means the European Union considers the standard of the island’s insurance regulation to be equivalent to its own. In November last year, the European Commission recommended that Bermuda should be considered as in line with the tough new insurance rules being adopted across the 28-country bloc. A 90-day consultation period that gave member countries and the European Parliament the chance to have their say has now passed. On March 4, the EC’s delegated decision on Bermuda’s equivalence with Solvency II was laid out in detail in the Official Journal of the European Union. Now that 20 days have passed since the date of publication in the Journal, confirmation of Bermuda’s new status is complete. Solvency II equivalence means that commercial insurers and reinsurers based in Bermuda will not be competitively disadvantaged when they do business in the European Union. The news represents a significant achievement for Bermuda’s financial-services regulator, the Bermuda Monetary Authority, which has worked and lobbied for more than six years to achieve the goal. In an interview today, Jeremy Cox, chief executive officer of the BMA, paid tribute to his “tenacious team”, as well as the industry leaders and politicians who had helped to make it happen. A full story on the interview will appear in Monday’s Business section of The Royal Gazette. The BMA also released its 2016 Business Plan today. In his introduction, Mr Cox stressed that equivalence confirmation did not mean the BMA would suddenly have a lot of spare time on its hands. “Securing equivalence was clearly a major achievement, a powerful example of what can be accomplished with a strong, tenacious team that embarked on the road to equivalence in 2010,” Mr Cox said. But equivalence is an interim objective, rather than an end in itself, and should be viewed in the wider context of our vision and strategic goals.”
Bermuda complies and benefits. Solvency II refers to a European Union Directive (2009/138/EC) relating to insurance regulation. Solvency II became effective on 1 January 2016 and provides new rules with respect to capital requirements, governance, risk management, and disclosure in relation to insurers and reinsurers. The regulatory changes resulting from the implementation of Solvency II include, but are not limited to, the following three pillars:
• How insurers quantify their liabilities and assets, including the way a company reserves funds to satisfy policyholder claims.
• How the structure and management of insurance businesses are governed, enabling insurers to identify, quantify, monitor, successfully manage and report risks to which they are exposed.
• Ensuring that robust reporting and disclosure rules are in place to foster transparency for insurers reporting on their business.
Following a demonstration of interest from the Bermuda Monetary Authority (BMA), the Bermuda Government's regulatory agency for Bermuda-registered insurance companies, the European Commission tasked the European Insurance and Occupational Pensions Authority (EIOPA) in 2010 to provide a preliminary assessment of the BMA’s supervisory regime. The goal was to have EIOPA determine whether the BMA’s supervisory regime satisfied the general criteria for third-country equivalence (i.e. non-EU member state equivalence). In an effort to gain equivalence, the BMA has, over a period of six years, fortified and revised its approach to insurance regulation in such a way as to bring the regulation of Bermuda’s commercial insurers (ie those registered as Class 3A, 3B or 4, C, D or E) in line with Solvency II. In several follow-up reports, EIOPA advised that Bermuda’s regulatory framework for commercial insurers was broadly equivalent with the Directive, paving the way for formalization of equivalence. This came in the form of a delegated act adopted by the European Commission on November 26, 2015 (Delegated Act). The Delegated Act came into force on 1 January 2016 (subject to a three-month review period by the European Parliament and European Council), and grants full equivalence to Bermuda for an unlimited period. In summary, the Delegated Act is essentially the EU conveying that they acknowledge the Bermuda commercial (re)insurance and group supervisory regimes to be equivalent to that of the EU, and on that basis, Bermuda (re)insurers and groups are free to conduct business in the EU without additional regulatory requirements/burdens. The BMA’s approach to insurance regulation is not strictly EU-centric. International regulatory input is derived, in part, through membership in various international standard setting bodies relating to insurance regulation such as the International Association of Insurance Supervisors (IAIS), the International Organisation of Securities Commissions (IOSCO), and the Group of International Insurance Centre Supervisors (GIICS). The BMA has also entered into a multilateral memorandum of understanding with, and is a charter member of, the International Association of Insurance Supervisors (IAIS). Locally, the BMA is able to derive input from a variety of sources including insurance and reinsurance companies, law firms and other organisations such as the Association of Bermuda Insurers and Reinsurers (ABIR), the Bermuda International Long-Term Insurance and Reinsurance Association (BILTIR), and the Bermuda Insurance Management Association (BIMA) to name a few. With the Delegated Act passed and in-force wef January 1, 2016, Bermuda registered (re)insurance companies and groups are able to conduct business freely within the EU, and on an even playing field with existing EU insurance companies. As the economic output of the EU represents a quarter of the global economy (measured in terms of GDP), ease of operations for our (re)insurers and groups in the EU is an important asset, one that many competing offshore jurisdictions are without.
October 24, 2016.
Multi-national © 2016 by Bermuda Online. All Rights Reserved.