Bermuda Means Business
When people think of Bermuda, they usually picture pink sand, sun, knee-length shorts and golf. But there is more to this picturesque backdrop than first meets the eye. Bermuda is one of the world’s leading financial centres, having pioneered the concept of offshore financial jurisdictions in the 1930s, and it has continued to evolve ever since.
Bermuda is one of the world’s leading corporate insurance and reinsurance markets and, as such, is a vital cog in the global economy. When you see news of a hurricane, industrial accident or earthquake anywhere in the world, it is likely that a Bermuda-based company will be responsible for a significant portion of the claims paid that will go towards reconstruction of the affected area and help people to get their lives back together.
However, international business is more than insurance. Bermuda is also home to a range of trust companies, mutual funds and the companies that administer them, banks, shipping companies and other multinational businesses. Today, nearly every Fortune 500 company has a link to the island.
Businesses come to here for a number of reasons. When Bacardí established its international headquarters here in the 1960s, it was seeking political stability, which had deteriorated in Cuba. Twenty years later, many Hong Kong companies established domiciles in Bermuda, in anticipation of Britain handing back its colony to China.
Many international companies and trusts are attracted to Bermuda’s legal system, which is based on the English Common Law system with final appeal to the Judicial Committee of the Privy Council of the House of Lords in England. Bermuda’s corporate law is flexible and largely based on the corporate law of the United Kingdom, making it all the more attractive and sophisticated, which sets it apart from its competition. Its law firms, Big Four accounting firms, IT businesses and other service providers ensure that businesses in Bermuda get all the outside support they want or need.
Bermuda’s long-standing tradition as a low tax jurisdiction is attractive to many global companies, whilst its location, between the big financial markets of London and New York makes it the perfect base for traders buying and selling European and North American financial instruments.
MORE THAN INSURANCE
Aside from insurance, Bermuda is home to many other forms of business and, led by the Bermuda Business Development Agency (BDA), is working hard to diversify the economy.
These areas include asset management and Islamic finance, life sciences and shipping, whilst Bermuda is also reaching out to other regions like Latin America in order to offer solutions to fast-growing companies there.
Mutual funds and hedge funds have been managed and administered in Bermuda for decades. These range from money market funds operated conservatively by banks to private hedge funds in the alternative investment sector operated by leading investment managers specialising in reinsurance risk. In 2013, new laws were passed making it easier and quicker for mutual funds to be formed on the island, in some cases within 24 hours.
Many of the world’s ships and aircraft are registered in Bermuda, as owners are attracted by the island’s efficiency and high safety standards. Many of the world’s leading shipping companies also have their domiciles in Bermuda.
The need for regulation was underlined in the global financial crisis, and Bermuda has always been amongst the leaders in the fight against money laundering and fraud.
Financial activity is regulated by the Bermuda Monetary Authority, which operates independently from the government and is funded by fees collected from the companies they regulate. It enforces the government’s laws relating to financial services, acts as a central bank and oversees financial institutions. These institutions rely on the island maintaining a sterling reputation and they have no more desire than Bermuda does to be associated with those who would use offshore jurisdictions for illegitimate purposes.
LOW TAXES, NOT NO TAXES
Considered “tax neutral,” Bermuda levies no income tax and has no capital gains, estate or corporate taxes. World-class public services are funded by a payroll tax for those who work here, property and vehicle taxes, customs duties, and other licences and fees.
About one-fifth of Bermuda’s workforce is imported, since the economy creates more jobs than there are working locals to fill them. Work permits are issued to guest workers for various terms, allowing them and their families the opportunity to live in Bermuda, enjoying all that our island paradise has to offer.
Recognising non-Bermudians’ vital contribution to the economy, the government has recently streamlined the immigration process and suspended the six-year term limit policy for work permit holders, meaning that non-Bermudians can hold jobs as long as there is no qualified Bermudian available to fill the role.
New incentives have also been introduced to encourage more non-Bermudians to form companies in Bermuda and to bring their key decision makers to live and work on the island. Job creators already working on the island can also earn the right to own property, depending on how many people they employ and how long they have been living in Bermuda. There is also consideration for giving a range of rights to high-net-worth people who make their homes in Bermuda.
BANKING ON BERMUDA
In Bermuda, four banks have been granted licences to operate here. Each serves a different sector of the community, with some overlap. HSBC Bank Bermuda Limited is a wholly owned subsidiary of the international HSBC Bank (6 Front St., 441-295-4000), whilst the Bank of N.T. Butterfield & Son Limited is akin to a super-regional bank, with operations in seven different countries (65 Front St., 441-295-1111,). Capital G Bank is a community bank and high-level financial adviser (21–25 Reid St., 441-296-6969, capital-g.com). All three banks offer a full range of retail and online banking services.
Visitors and new residents are able to open accounts with all banks, provided they complete the routine “Know Your Client” documentation which would be expected by any reputable financial institution the world over.
Visitors can buy SIM cards and prepaid telephone minutes or rent mobile phones. Many overseas GSM phones work here. Check with your service provider.
Hamilton is a very modern business venue. Wi-Fi hot spots are abundant within the city and are also available at many cafés, restaurants and other areas across the island, especially popular areas such as St. George’s and Royal Naval Dockyard.
The government is also moving forwards with telecommunications reform to ensure a competitive marketplace. To that end, a Regulatory Authority is overseeing the implementation of the Electronic Communications Act 2011 (ECA) and single licences to suppliers who can offer a range of telecommunications services under one company and from a single or multiple platforms. The reforms that are under way are designed to bring bundled services at competitive prices to Bermuda, as well as spur new investment and job creation.