Why You Should Consider Starting a Business in Bermuda, Too

A Hub for the Global Enterprise: Why You Should Consider Starting a Business in Bermuda, Too

If you mention Bermuda to most people, chances are they will either think of its famous beaches or its high standard of living. However, these two elements do not tell the full story, as striving for a unique profi le has always set Bermuda apart from other internaঞ onal fi nancial centers. For many decades, Bermuda’s pursuit to meet high standards and align itself with the best pracঞ ces worldwide has disঞ nguished it from other off shore centers. It’s all about reputaঞ on and quality over quanঞ ty, and such companies like Airbus, Boeing, BMW, Land Rover, Sperry and Bremont, Louis Vui‚ on and Moet & Chandon chose to register in Bermuda for all the same reasons. The off shore fi nancial centers in the Caribbean have become economically successful in the last 30 years. Today, the Cayman Islands, Bermuda, Briঞ sh Virgin Islands appear in the most important ranking worldwide, the Global Financial Centres Index (GFCI), which is the main tool that points out how a‚ racঞ ve fi nancial centers are around the world and allows us to understand their growth and compeঞঞ veness over ঞ me. The factors taken into account include evidence on the compeঞঞ veness of the telecommunicaঞ ons infrastructure, informaঞ on on how favorable are the regulaঞ ons for companies, government eff ecঞ veness indexes, and indexes on the perception of corrupঞ on, among others. According to the latest GFCI ranking, Bermuda is now the third-highest ranked financial center in the Laঞ n America and Caribbean region, having been overtaken by the Cayman Islands and the Briঞ sh Virgin Islands. One of the reasons why Bermuda dropped in this list was the fact that

the Council of the European Union added it to its blacklist of non-cooperaঞ ve jurisdicঞ ons for tax purposes. Being added to this list amounts to a move to “name and shame“ rather than to impose pracঞ cal measures. However, Bermuda immediately took some steps towards changing this situaঞ on and introduced economic substance rules, expressing hope and expectaঞ on that it will be removed from the blacklist on the next evaluaঞ on. The eff orts did pay off , and Bermuda was removed from a European Union list of non-cooperaঞ ve tax jurisdicঞ ons in May 2019, with the EU council saying Bermuda had taken posiঞ ve steps, and that it “remains commi‚ ed to addressing EU concerns in the area of collecࢼ ve investment funds.” Today, Bermuda’s aম tude is crystal clear — “Quality rather than quanࢼ ty of the financial transactions.“ Curtis Dickinson, Bermuda’s Finance Minister, noted that Bermuda has a strong message for those who see this off - shore fi nancial center just as a perfect place to hide misdeeds: “We will rat you out, plain and simple as that, because our reputaࢼ on is a criࢼ cal part of our calling card, and unless we can demonstrate how serious we are about this, then people will not take us seriously.“ As one of the leading off shore fi nancial centers, Bermuda has all the essenঞ al components necessary for a robust internaঞ onal business community. There are many advantages of doing business here — think progressive regulatory regime, lower tax jurisdicঞ on, the wide availability of experienced service providers, modern infrastructure, a stable poliঞ cal and economic climate, and the quality of life that is enjoyed on the Island. One of Bermuda’s biggest a‚ racঞ ons is its tax-neutral jurisdicঞ onal status, with zero tax on profi ts, income, dividends, or capital gains. What is more, it is relaঞ vely easy to start a business here, as company registraঞ on is a fast and simple process. The length of ঞ me it takes to incorporate in this country is about 3 to 5 days, and it is typically aff ordable to run a corporaঞ on, as there is only an annual government and agent fee. Ross Webber, CEO of the Bermuda Business Development Agency (BDA), which has been pro-acঞ vely engaged in assisঞ ng start-ups, multinationals, and other corporate ventures since it was established in 2013, says that “We are committed to keeping internaࢼ onal business here. We are pro-acࢼ vely advising the sophisticated international business community about our conducive business environment and we are conࢼ nually refi ning, augmenࢼ ng, and simplifying the process to start, relocate, or grow a business here. Now is the perfect ࢼ me to come to Bermuda. We are conࢼ nuing to build on our success and well-deserved reputaࢼ on as a jurisdicࢼ on that caters superbly to the global marketplace.” Bermuda’s locaঞ on is also an important component of the list. Ideally located between Europe and the US, Bermuda is easy to get to with daily direct fl ights to and from London and US gateway ciঞ es. Webber noted that “As an international financial center, Bermuda is parࢼ cularly well-posiࢼ oned for European companies looking to add an off shore component.“ What is more, Bermuda has its own stock exchange (BSX), which is one of the largest off shore electronic securiঞ es markets in the world. It specializes in the lisঞ ng and trading of equiঞ es, debt issues, derivaঞ ve warrants, funds, hedge funds, insurance-linked securiঞ es, and other capital market instruments. Dickinson noted that “In as much as you have an internaࢼ onal business that needs an off shore presence, we would argue that Bermuda is a great place to put it.“ And we have a few related numbers for you right here. Today, there are as many as 18000 Bermuda-based exempted and international businesses on this 20,6 square miles Island. Bermuda is ranked Number 1 in the world as an off shore center for insurance and reinsurance, with approximately 1500 businesses in this industry. The sector also consistently accounts for about 85 percent of the Island’s GDP. To be even more specific, in the global insurance and reinsurance sector, Bermuda is second only to London and New York. It’s also in the Top 3 for shipping and investment. More than 75 percent of the Fortune 500 companies have some presence in Bermuda. Bermuda is also a top destination for private jet travelers. Aoife O’Sullivan, partner with the Air Law Firm noted that “The main reason is fl exibility.“ And even though the travel industry has been exposed to the sudden drop in the tourism sector due to the coronavirus pandemic, the private jet industry has been on a roll, especially in the Caribbean. Anthony Tivnan, President at Magellan Jets, one of the leading private jet providers, noted that “The Caribbean Islands are extremely popular right now: Puerto Rico, the Turks, and Caicos, Barbados, Bermuda… Island travel is extremely active, and we’re counࢼ ng on it to replace some of the European travel we typically do in the summer months.“ What is more, today Bermuda has earned a global leader in fi ntech and innovations involving blockchain title. Over the past several years and with the leadership David Burt, the youngest Premier ever elected to this posiঞ on, Bermuda’s government agencies passed a string of new regulaঞ ons aimed at creaঞ ng infrastructure and ecosystem for innovaঞ on and technology with a specifi c focus on the applicaঞ ons of blockchain. The legislaঞ on, which included leading-edge fi ntech regulaঞ ons for digital assets, has put Bermuda at the forefront of the blockchain revoluঞ on and made it a sought a[ er desঞ naঞ on for companies in the industry. On the end note, Ross noted that “While (re)insurance is our domicile’s most prominent industry, the strength of Bermuda’s economy is its mulࢼ- sector scope. The Island is a thriving center for investment management, trusts, private client and family offi ce structures, as well as a global aircra[ & ship registry, ship-management firms − plus new-economy ventures ranging from marine-sourced pharmaceuticals to e-commerce and technology start-ups. Bermuda’s sophisࢼ cated infrastructure and the corporate synergy it engenders have made the jurisdicࢼ on a hub for the global enterprise.“