Bermuda Company Formation / Registration / Incorporation

GENERAL INFORMATION:

Bermuda (officially, the Bermudas or Somers Isles) is a British overseas territory in the North Atlantic Ocean. Located off the east coast of the United States, its nearest landmass is Cape Hatteras, North Carolina, about 1,030 kilometres (640 mi) to the west-northwest. It is about 1,373 kilometres (853 mi) south of Halifax, Nova Scotia, Canada, and 1,770 kilometres (1,100 mi) north-east of Miami, Florida. Its capital city is Hamilton.

Bermuda was discovered in 1505 by Spanish navigator Juan de Bermúdez (who claimed to find the island inhabited only by pigs) after whom the islands are named, who claimed it for the Spanish Empire. Unoccupied, the island was settled by Britain in 1609, making it the oldest and most populous remaining British overseas territory. Its first capital, St George’s, was established in 1612 and is the oldest continuously inhabited British town in the Americas.

Bermuda had an affluent economy, with off-shore finance as its largest sector followed by tourism. Back in 2005, Bermuda claimed to have the world’s highest GDP per capita, yet these statistics are hard to verify as Bermuda is not classified as a country but rather as a territory of the U.K. It has a subtropical climate. Bermuda makes up the easternmost point of the so-called “Bermuda Triangle,” a region of sea in which a number of aircraft and surface vessels have allegedly disappeared under mysterious circumstances. The island is prone to severe weather and powerful typhoons with widespread power outages.

The Bermuda Monetary Authority is the issuing authority for all banknotes and coins, as well as being responsible for the regulation of financial institutions.

Bermuda is an offshore financial centre, which results from its low direct taxation on personal or corporate income. The local tax system is based upon import duties, payroll taxes and consumption taxes. The legal system is derived from that of the United Kingdom, with recourse to English courts of final appeal. However, foreign private individuals cannot easily open bank accounts or subscribe to mobile phone or internet service.

As the offshore domicile of many foreign companies, Bermuda has a highly developed international business economy; it is a financial exporter of financial services, primarily insurance, reinsurance, investment funds and special purpose vehicles (SPV). Finance and international business now constitute the largest sector of Bermuda’s economy. However, in September 2009, it was reported that a growing number of companies were moving from Bermuda to Ireland as part of a search for “a more stable environment”.

Large numbers of leading international insurance companies are based in Bermuda, making the territory one of the world’s largest reinsurance centres. Those internationally owned and operated businesses that are physically based in Bermuda—of which there are around four hundred—are represented by the Association of Bermuda International Companies (ABIC). In total, over 1,500 exempted or international companies are currently registered with the Registrar of Companies in Bermuda.

Thanks to its favourable tax regime and a highly reactive regulatory framework Bermuda is the domicile of choice for the implementation of insurance-related innovative solutions also known as Alternative Risk Transfer (ART). ART includes captive insurances, Finite Risk insurance and insurance securitisation such as Cat bonds.

The Bermuda Stock Exchange (BSX), established in 1971, is now the world’s largest fully electronic offshore securities market, with a current market capitalisation (excluding mutual funds) in excess of US$330 billion. There are four hundred securities listed on the stock exchange, of which almost three hundred are offshore funds and alternative investment structures attracted by Bermuda’s regulatory environment. The Exchange specialises in listing and trading of capital market instruments such as equities, debt issues, funds (including hedge fund structures) and depository receipt programmes.

The BSX is a full member of the World Federation of Exchanges and is located in an OECD member nation. It also has 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.