Registration of company on Bermudas

Bermuda is a British Overseas Territory located on the Bermuda archipelago in the North Atlantic Ocean and to the east of the United States. It is under the sovereignty of the United Kingdom (responsible for defence and foreign relations. The capital of Bermuda is Hamilton. Bermuda is home to over 70, 000 people while its official language is English. The official currency is the Bermudian dollar - BMD (which is equal to the American dollar).

Bermuda has one of the world’s highest GDP per capita with tourism and insurance sectors its largest economic sectors.

The government of Bermuda is parliamentary representative democratic dependency under the constitutional monarchy. The Constitution of Bermuda provides for the internal self-government of the state. At the same time, the Queen of the United Kingdom appoints the governor whose power includes issues of defence, foreign policy, and police matters. The authority responsible for company registration and incorporation in Bermuda is the Registrar of Companies. The legislative framework is the Companies Act 1981.

Benefits of Company Formation in Bermuda

1. Economically and politically stable jurisdiction;
2. No minimum share capital requirement;
3. Favourable taxation regime - Tax exemption;
4. Double taxation treaties signed with 41 countries;
5. Confidentiality of the company officers and beneficiaries;
6. Nominee service is allowed;
7. Transferability of Shares

Business in Bermuda: Types of Companies

• Company Limited by Shares
• Company Limited by Guarantee
• Unlimited Liability Company
• Limited Duration Company

The Bermuda Exempt Company is the most preferred company type in this jurisdiction. The peculiarities of an Exempt Company include:

• Exempt Company are allowed to engage in any activity provided by law. The provision of banking, trust, insurance and reinsurance services is however subject to licensing.
• The company is prohibited from the following activities, they include:
  - To conduct commercial activities with the residents of Bermuda involved;
  - To take possession of real estates located on the administrative lands of the islands;
  - To accept deposits and conduct activities contrary to the national interests of the jurisdiction.
• Registration of offshore business in Bermuda takes place within 3 working days from the date of submission of the necessary documents to the registration authorities. There is the option of an accelerated registration procedure the company can undergo within a few hours (if necessary and in a case where the Treasury of Bermuda has all the information concerning the company's managers and beneficial owners).
• According to the island’s legislation, third parties can not buy a ready-made company in Bermuda.
• The names of companies are registered only in English. The name should include words or abbreviation like ‘Limited’ or ‘Ltd’ respectively. The names of companies which can mislead concerning the company's scope of activities or the names which directly or indirectly indicate the link to state or municipal authorities is not permitted.
• The legal address should be in the territory of this jurisdiction and provided by the registered agent. Only representatives of the state authorities are allowed to come to this address. The use of the post-office box leased from the local post office as the legal address is prohibited.
• Registration of offshore business in Bermuda is possible if there is minimum authorized capital of 12,000 BD $ (or equivalent in another freely convertible currency). Issue and allocation of capital between shareholders are mandatory, but its incomplete payment is not allowed.
• Only registered shares and bearer bonds are allowed to be issued. Bearer shares are not issued.
• Citizens and legal entities can be shareholders of the company (there should be at least one shareholder). No residence requirements.
• Only citizens can become directors (there should be at least two directors). At least one of the directors of the company should be a Bermudian resident.
• The meeting of shareholders should be held once per the calendar year. The place does not matter. The shareholders with more than 10% of voting shares can convene extraordinary meetings. Besides, the meetings of directors can be held in any jurisdiction of the world, and the minutes are kept by each of the directors.
• Data on beneficial owners can be disclosed, only upon a legal ruling or decision from the judicial authority.
• The law does not limit the selection of banks, the countries of their location, and the number of accounts for the company. Information about all banking transactions is strictly confidential.
• Currency control of the company's activities is not applied.

Economic Substance

Bermuda’s Economic Substance Act 2018 (Bermuda Substance Act) and the Economic Substance Regulations 2018 (Bermuda Substance Regulations) came into effect on the 31st of December, 2018. The law applies to all newly registered entities incorporated or registered after that date. For existing registered entities, there is a six-month transitory period and the first reporting period commences in 2020.

For the purpose of the Bermuda Substance Act, it is necessary to clarify who Bermuda “registered entities” are. They include:

• Companies incorporated under the Companies Act 1981;
• Companies formed under the Limited Liability Company Act 2016; and
• Partnerships (exempted, exempted limited or overseas) which have elected to have separate legal personality under s.4A of the Partnership Act 1902.
• There is currently no exemption from Bermuda’s substance requirements for entities which are tax resident outside of Bermuda.

A Bermuda registered entity will be in the scope of the Bermuda Substance Act if it conducts any of the following “relevant activities”: banking, insurance, fund management, financing, leasing, headquarters, shipping, distribution and service centre, intellectual property and holding entity.

Each of the above activities is defined in the Bermuda Substance Regulations. It is anticipated that guidance notes will be issued by the Bermuda Government in due course which should provide further clarity on the above-mentioned activities.

Economic Substance Requirements in Bermuda

A Bermuda registered entity conducting any relevant activity (as outlined above) will satisfy the Bermuda economic substance requirements if:

• It is managed and directed in Bermuda;
• Its core income-generating activities are undertaken in Bermuda with respect to the relevant activity;
• It maintains an adequate physical presence in Bermuda;
• There are adequate full-time employees in Bermuda with suitable qualifications; and
• There is an adequate operating expenditure incurred in Bermuda in relation to the relevant activity.

Enhanced substance requirements for intellectual property (IP) activities in Bermuda. A Bermuda entity engages in “IP activities” if it derives revenue from its IP assets.

“IP assets” includes (but is not limited to) patents, technical know-how, trademarks, brands and goodwill, therefore, it is applicable to a broad range of businesses and not restricted to solely IP companies. The Bermuda Substance Act and the Bermuda Substance Regulations places enhanced requirements on entities involved in intellectual property businesses.

Business in Bermuda: Taxes

• Corporate tax in Bermuda - 0%
• Personal income tax - 0%
• VAT rate - 0%
• Double taxation treaties signed with 41 countries and 9 Tax information exchange treaties signed.

Bookkeeping in Bermuda

Accounting filing requirements: YES

Annual return filing requirements: NO

Audit requirements: NO

Company Registration Requirements

• Certificate of incorporation;
• Article and Memorandum of Association;
• The legal office registered address;
• Local registered agent;
• Minimum number of one shareholder;
• A minimum number of two directors. No residence requirements;
• Notarized passport copies;
• No minimum paid share capital.

How to Register a Company in Bermuda: The Registration Process

Step 1. Law and Trust works with the client to get the company’s name and activity approval from the Registrar of Companies;

Step 2. Law and Trust works with the client to secure the Memorandum of Association (MOA);

Step 3. Law and Trust collects, prepares and files the necessary incorporation documents on behalf of the client to the relevant authorities for approval;

Step 4. Law and Trust works with the client to open a corporate bank account in Bermuda;

Step 5. Law and Trust deliver the certificate of incorporation personally to the client or via courier service.

Bermuda Company Formation FAQs

How much does it cost to register a company in Bermuda?

The cost of registering a company is US$6925. the total cost includes the preparation of legal documents, company registration, payment of all taxes and fees at the time of registration and legal address for the company (a year).

How long does it take to register a company in Bermuda?

It takes from three days to complete the company registration process in Bermuda.

What is the most common form of a company incorporated in Bermuda?

The most common company type incorporated in Bermuda is the Bermuda Exempt Company.

Do I need a local registered agent to register a company in Bermuda?

Yes, a local registered agent is needed to complete the company registration process in this jurisdiction.

Do I require a license to run a business or company in Bermuda?

Yes, a license is required to run a business in Bermuda but it comes down to what type of business is run in this jurisdiction.

Why Incorporate with Law&Trust International?

Benefits of company registration, formation, and incorporation services with Law&Trust International in Bermuda include:

Full range of related services: Provision of a full range of legal, corporate, government, and business intelligence related services in Bermuda. A detailed overview of our services includes full legal support of the company registration procedure, obtaining a legal address, interaction with the official government authorities of the jurisdiction, state fees, legal address of the company for a year, production and registration of company stamps and advising the client as part of the registration process. Opening a bank account and the cost of these services are discussed during the consultation.

Professionals and expertise of Law: Worldwide registration and legal maintenance of companies, accounting services, and audit, tax planning and optimization, trademark and patent registration. Law and Trust provide clients with the best company incorporation services.

Domestic service: Law&Trust ensure our services cover every region, area or state in Bermuda. Be rest assured that no matter where the new company intends to incorporate in Bermuda, we’ve got the location covered.

Free initial advice: Free consultation from the lawyers of Law&Trust International regarding strategies or the provision of services for analyzing and developing a legal position on an issue the client raises in Bermuda.

Confidentiality: Law&Trust makes use of modern technological features to keep the records and details of every client safe.

Efficiency and productivity: Strategically providing up to date personalized services to help your business succeed.

Ready for Company Incorporation?

If you are interested in registering and incorporating a company in Bermuda contact Law & Trust International by simply sending an email or call now to take your business to the next level!