Doing Business In Bermuda Bermuda is both a tropical paradise and an island humming with crackling efficiency. Those planning to do business in Bermuda, either temporarily or long-term, may be surprised to discover that the main city of Hamilton offers nearly all the amenities of any cosmopolitan city.
Unlike other destinations in or near the Caribbean, the Bermudian attitude toward commerce is no-nonsense and corporate. Maņana is not a respected mode in the local business world.
More than 13,000 offshore businesses are based in Bermuda, where the very concept of a haven for offshore business — that is, a tax-friendly and relatively regulation-free zone where much of the business is conducted by foreigners trading overseas or doing business for international corporations — first began in 1935. More than 300 offshore businesses have a brick-and-mortar presence in Hamilton, where most of the accoutrements and administrative needs of business are available within a few blocks.
Conyers Dill & Pearman, one of the oldest law firms in Bermuda, has focused its international practice on trusts and corporate planning since 1935 (the firm was founded in 1928).
Banking in Bermuda
Bermuda has four national banks, all with main branches in Hamilton: HSBC/Bank of Bermuda (6 Front St., 295-4000), Butterfield Bank Limited (65 Front and Reid Streets, 295-1111), Bermuda Commercial Bank Limited (43 Victoria St., 295-8091) and Capital G Bank Limited (21-25 Reid St., 296-6969). Capital G is a privately held deposit company, and Bermuda Commercial is for international business transactions only. For day-to-day operations, most businesses and tourists will find their interests best served by HSBC and Butterfield, which are multinational and offer ATMs throughout Hamilton and other major areas. Main banking hours are 9 a.m.-4:30 p.m., with some banks closing earlier or later. Butterfield and Capital G have Saturday hours.
Insurance
Bermuda, and specifically Hamilton, is chock-full of insurance companies, brokers and underwriters, actuaries, accountants and attorneys. According to Keith Archibald Forbes of Bermuda's The Royal Gazette, "In insurance and reinsurance, Bermuda ranks with Lloyd's of London and New York as a global leader and in some aspects of specialty insurance, outranks them." In fact, Bermuda ranks just behind London and New York as the largest international insurance hub, with more than 1,600 insurance companies domiciled on island.
Recent insurers that have moved to Bermuda include Lloyd's of London underwriter, Catlin, which recently took over Wellington Underwriting and now has a subsidiary in Bermuda; Hiscox; Amlin; Brit; and Omega.
In February 2007, the Bermuda Monetary Authority (BMA) announced that the island had enjoyed a 10 percent increase in new reinsurance companies incorporated in Bermuda in 2006 over 2005, for a total of 82.
For registration purposes, insurance companies are divided into four classes on Bermuda; in general, the rights and responsibilities of insurance companies are somewhat different from those of other corporations. The classes are divided by number of owners and type of insurer, and carry a minimum solvency requirement of $120,000 for class 1 to $100 million for class 4.
Bermuda is the second most important global domicile for mutual fund companies, and the largest hub in the world for "captives," or insurance companies that are formed to insure the risks of their owners or of larger insurance companies, in the case of "rent-a-captives."
Bermuda is actually the founding home of the captive insurance concept, which was established on the island in the 1960s. Today, Bermuda is home to some 33 to 40 percent of the world's 5,000 captives. In 2008, Bermuda will hold its fourth annual captive conference.
Business Taxes
Exempt companies in Bermuda benefit from the island's lack of taxes on profits, income, dividends or capital gains (although shareholders of U.S. subsidiaries or those doing business in the U.S. may eventually be required to pay U.S. capital gains tax). Estate taxes are also not imposed.
Trusts
Bermuda has many trust service providers, at the major law firms, accounting firms and banks. All trust service providers are licensed and regulated by the BMA, and the Bermuda Association of Licensed Trustees keeps trustees up to date with the newest regulations and other information.
Funds
Bermuda is a global leader in financial services and continues to attract companies with its progressive policies. The latest of these is the 2006 Investment Funds Act. Finance Minister Paula Cox, who shepherded the act through Bermuda's House of Assembly, says of the act, "There will be less time required to set up a fund as the rules are more clearly stated. The Bill is another example of Bermuda's continued efforts to ensure that we maintain the right balance as a reputable international financial centre."
The most immediately significant change wrought by the new act is the requirement that all fund administrators be licensed. This includes partnerships, corporations, unit trusts, mutual fund companies and hedge fund administrators.
The act also introduces a new type of fund, called "administered," which will be registered and subject to the same regulations that any other Bermuda-based administer would be subject to, including governance and conduct rules.
Other changes include refinements in the distinction between public and non-public funds, in the rules for prospectuses, in exclusions from fund regulations, in the transparency of the minimum fund operator requirements, in the requirements for informing regulators and in the rules for appointing service providers.
Unit trustees can hold property in segregated accounts, making them equivalent to companies with these accounts. Funds now have, just as other financial institutions already had, the right to appeal to a tribunal.
Not least among the provisions of the new act is one that expands the powers of the BMA to require additional information from funds.
Bermuda Stock Exchange
The top offshore exchange for the listing of mutual and hedge funds, unit trusts and limited partnerships is the Bermuda Stock Exchange (BSX), one of the top electronic markets internationally. Hedge funds account for more than a quarter of BSX's 550 listed issuers. Together, the listings account for a total market capitalisation of about US$330 billion. "Although fund structures seek stock exchange listings for a variety of reasons, regulatory oversight is one of the primary motivations," says Greg Wojciechowski, president and CEO of BSX. "By listing, the structure subjects itself to regulation that creates transparency and ensures that the market has critical pricing and corporate information readily available. The prestige generated by listing increases the potential investor base, and the pricing information enables prospective investors to more easily and regularly determine the value of their investments."
BSX has been in business since 1971, offering a strong measure of stability and reassurance to its listers such as Citigroup, BISYS, the Bank of New York and HSBC.
For hedge funds, BSX initiated, in concert with BIBA and the BMA, "Launch 'n List," an effort to dispel some of the more time-intensive elements of joining the market.
For e-commerce and technology start-ups, BSX instituted the Mezzanine Market, which allows these companies to list earlier than they would be able to do elsewhere. The listing often helps these high-potential companies to find capital.
Corporate Structure
In order to incorporate as a local company doing business on Bermuda, 60 percent of the company's owners must be Bermudians. However, this is not a problem for international companies doing overseas business from a Bermudian home base. These companies are considered "exempt" under Bermuda corporate law. Two Bermudians must serve as directors of these companies, and the business cannot do business in Bermudian dollars. Otherwise, it is not subject to the same restrictions as a local business, and there is no proscribed amount of share capital that must be locally owned.
Where to Incorporate
The Bermuda Monetary Authority (BMA) processes incorporation application and share issue approvals. It's also the de facto central bank of Bermuda. The Registrar of Companies (RoC) is now part of BMA rather than, as it was previously, part of the Ministry of Finance. The RoC grants licences to overseas companies and, as its name indicates, registers new companies.
Contact these businesses for more information and assistance. Or use the links at the top of the page to find full details and more professional services to help you succeed at business in Bermuda.
Allied World Assurance Company
27 Richmond Road, Pembroke
Tel: 441-278-5400
Website: www.awac.com
An unwavering focus on superior solutions. An unparalleled level of service. And an uncompromising commitment to maintaining financial strength. Guided by these exacting standards, Allied World Assurance Company has built a reputation as a strong supplier of insurance and reinsurance solutions. Discover how our focus on relationships, product mix and flexibility enable us to deliver a range of solutions that can be customised to suit your specific requirements. Please visit our website at www.awac.com for more information.
Bermuda Stock Exchange (BSX)
Washington Mall
Church Street, Hamilton
Tel: 441-292-7212
E-mail: info@bsx.com
Website: www.bsx.com
Established in 1971, the Bermuda Stock Exchange (BSX) is now the world's leading fully electronic offshore securities market, with a current market capitalisation (excluding mutual funds) in excess of US$330 billion. There are 550 securities listed on the BSX, of which almost 300 are offshore funds and alternative investment structures.
The success of the BSX lies in its innovative approach to new products and markets and its ability to offer a "commercially sensible" regulatory environment. The exchange specialises in listing and trading of capital market instruments such as equities, debt issues, funds (including Hedge Fund structures) and derivative warrant programmes. The BSX, recognised by the U.S. SEC as a Designated Offshore Securities Market, is a full member of the World Federation of Exchanges (WFE) and is located in an OECD member nation.
In recent developments, the BSX was granted Approved Stock Exchange status under Australia's Foreign Investment Fund (FIF) taxation rules and Designated Investment Exchange status by the UK's Financial Services Authority. In December 2007, it was granted Recognised Stock Exchange status by the UK's HM Revenue and Customs.
Electronic Services Ltd. is an audiovisual company with more than 30 years of experience. The firm provides technical support and equipment to major hotels, small properties and corporate offices in Bermuda. Electronic Services Ltd. has worked with many large overseas production companies and meeting planners to provide custom services for clients with conventions in Bermuda.
DID YOU KNOW? As of December 31, 2005, birth certificates for travel to Bermuda are no longer accepted. Travelers must have a valid passport. Go to travel.state.gov for information.
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ExperienceBermuda.com The official web site of the
Bermuda Hotel Association. Copyright 2003/08, HCP/Aboard Publishing, a division of Aboard Publishing, Inc., and subsidiary of The McClatchy Company.
Recent insurers that have moved to Bermuda include Lloyd's of London underwriter, Catlin, which recently took over Wellington Underwriting and now has a subsidiary in Bermuda; Hiscox; Amlin; Brit; and Omega.
The most immediately significant change wrought by the new act is the requirement that all fund administrators be licensed. This includes partnerships, corporations, unit trusts, mutual fund companies and hedge fund administrators.
BSX has been in business since 1971, offering a strong measure of stability and reassurance to its listers such as Citigroup, BISYS, the Bank of New York and HSBC. 
Book now and celebrate with hotel credits of up to $400 for travel through March 31, 2009. Plus get a 400 Anniversary Passport for additional savings of up to $1000 on island.
Make your Bermuda trip even more memorable with dolphins! Dolphin Quest offers fun, interactive dolphin encounter programs for all. Book your adventure today!
Have a fun-filled vacation with a cycle from Oleander. If you can ride a bicycle, you can easily ride an Oleander scooter. See all of Bermuda...reserve one today! 
