The jurisdiction is known for one of the highest per capita income indicators. This is largely due to the fact that Bermuda is offshore, which allows investors to minimize tax costs and receive the desired confidentiality regarding their activities and revenues. A well-developed economy, excellent infrastructure, and loyal corporate legislation contribute to the fact that many foreign entrepreneurs are eager to register their company in this jurisdiction. If you want to appear among entrepreneurs who operate in this jurisdiction, your business presence may be established in one of the next forms.
Major Forms of Legal and Business Presence
If you are considering an option of company incorporation in Bermuda, your business presence may be arranged here in one of these forms:
- Limited Liability Company – a flexible option for doing business in Bermuda that may be suitable for small and medium-sized businesses. This entity may be formed by one or more persons who are not responsible for the results of the company’s operation except for the amounts of contributions they have to make. The management is carried out by the members of the limited liability company directly.
- Exempt Company – the most convenient and accessible organizational and legal form of a legal entity. Its main advantage is a complete exemption of the profit from tax payments while it preserves the features of the limited liability company in terms of the favorable restrictions of financial liability of shareholders. Precisely, they are liable only within the amounts unpaid to their shares. This company can be established by one or more persons, either natural or legal. The company is also obliged to keep the register of its members. The status of an exempt company should be reflected in its statutory documents. It also should convene an annual general meeting at least once per year. At least one director is required to manage the company’s affairs. Any Bermuda-exempt company is obliged to keep the register of beneficiary owners and update the information contained there. This information is confidential by default and can be disclosed in limited amounts in certain cases only. There are certain restrictions applied to the operation of an exempt company in Bermuda, for instance, it cannot hold land plots in this jurisdiction or conduct business activities.
- Permit Company – an option suitable for overseas companies that become eligible to conduct business activities after obtaining a permit from the Minister of Finance. Such a company will have a place of business in Bermuda with an option to conduct a business outside the jurisdiction. The appointment of a representative is also required in this case. The considered option of doing business also falls under certain restrictions, like the prohibition of acquiring land plots in Bermuda.
- Mutual Funds Company – may be a company limited by shares that has a statutory capital and is established for the purpose of investing the funds of its members for their mutual benefit. The liability of such members, in this case, is limited to the amount unpaid to their shares.
- General Partnership – a business option where business activities are carried out by two or more partners jointly while they bear the same joint liability for all the results of such business undertakings.
- Limited Partnership – another type of partnership that can be arranged by (i) one or two persons who are general partners and responsible for the management and its outcomes jointly and severally, and (ii) one or more persons who are not liable for any debts of such a partnership.
- Trust – an option suitable for asset management with an opportunity to ensure their sufficient protection. Trusts are not permitted to conduct trading activities.
Registration Requirements and Steps
Incorporation of a company in Bermuda may require passing these registration stages:
- Clarifying commercial priorities you are going to realize through the local entity. Such activities should not be mentioned in the list of restricted activities.
- Selection of the company’s name and coordination of the verification of such with the state registrar of legal entities.
- Selection of the legal address of the company.
- Definition of the shareholders’ pool and collecting information about such shareholders.
- Appointment of directors.
- Development of the Memorandum and Articles of Association.
- Determination of the authorized capital amount of the company (the minimum paid-up capital should be USD1).
- Filing an application for the registration of the legal entity together with the prepared package of documents to the registrar.
- Payment of stamp duties and state duties.
- Opening a corporate bank account.
- Obtaining licenses and special permits (necessary for certain types of regulated business activities).
On average, all bureaucratic formalities take about three weeks. Still, each registration case may vary. We suggest you reach our professionals for getting more precise consultations on the matter.
Legal and Regulatory Framework
Establishing companies in Bermuda is principally regulated by the Companies Act. Other legal acts important for doing business are the Limited Liability Company Act, the Partnership Act, the Limited Partnership Act, and the Bermuda Economic Substance Act.
The local legislation does not contain restrictions on types of activities, so foreign investors can choose any field. The most often legal entities, providing insurance or financial services (for this you need to receive a special license) are registered in this territory as it creates favorable conditions for these types of activities.
The Bermuda Registrar of Companies of the Bermuda Ministry of Economic Development and the Bermuda Monetary Authority are major state authorities responsible for the registration of doing business in Bermuda.
Advantages of the Jurisdiction
Key advantages of the procedure of company registration in Bermuda are as follow:
- overall economical and political stability;
- the entire process is clearly regulated and usually does not cause any problems for foreigners;
- short time required to complete the process;
- no personal presence of the shareholder is required, the documents can be issued remotely;
- no requirements for a mandatory contribution of the authorized capital in full – it is possible to pay USD1 only;
- nominee shareholders and/or directors may be appointed;
- there is no need to place public information about the company in open sources and any information on the beneficiaries is secured;
- there is no mandatory requirement to provide the annual financial statements of the enterprise;
- there is no currency control;
- double tax treaties with more than 40 countries.
Tax System of Bermuda
If you are considering an option of company incorporation in Bermuda, these basic highlights may be of help during the preliminary assessment:
- Corporate income tax – not applicable (N/A)
- Personal income tax – N/A
- Value-added tax – N/A
- Withholding tax (for non-residents) – N/A for dividends, interests, and royalties
- Capital gains tax – (i) corporate – N/A (ii) individual – N/A
How Prifinance Specialists May Help You
If you have preliminarily considered an option of company incorporation in Bermuda as suitable for you, Prifinance specialists may help to implement such as quickly and comfortably as possible. Qualified lawyers will undertake all preparatory procedures and ensure compliance with bureaucratic formalities as well as arrange the subsequent support of the registered legal entity. This will include drafting all required documents, opening a bank account, communicating with foreign state authorities and business partners, etc. Reach us shortly for more precise discussions and suggestions on how we can help you.