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By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online
Enacted by the Bermuda Legislature:
House of Assembly, where all Bermuda laws are legislatedAnti-Terrorism (Financial and Other Measures) Amendment Act 2009. Following dialogue between the UK and Overseas Territories with the declared aim of ensuring that countries like Bermuda cannot be used as a backdoor for certain types of undesirable and illegal activities.
Auxiliary Bicycles Amendment Act 2018. Increases the annual licence fee for auxiliary cycles and livery cycles. The fee for an auxiliary cycle is increased from $58.40 to $61.32 and the livery cycle fee moves from $83.95 to $88.20.
Banks and Deposit Companies Act 1999.
Beneficial Ownership Register. From 23 March 2018 all Bermuda companies and limited liability companies, except those that are expressly exempted from the requirement, must establish and maintain a beneficial ownership register at their registered offices (or, with the Registrar of Companies’ permission, a place in Bermuda convenient for inspection by the Registrar of Companies). Similar obligations have been placed on Bermuda partnerships, exempted partnerships and limited partnership as of 23 March 2018. Again, the law provides for a transition period of six months, meaning that such entities have until 23 September 2018 to comply. The law provides for a transition period of six months, meaning that such entities have until 23 September 2018 to comply. Entities that are exempted from the requirement to establish and maintain a beneficial ownership register include those whose shares are listed on the Bermuda Stock Exchange, or other appointed stock exchange; certain financial institutions (including those licensed under Sections 4 or 10 of the Insurance Act 1978 (insurers, insurance managers and intermediaries)); permit companies and certain entities operating close-ended investment funds. The beneficial ownership register must include minimum required information in respect of every registrable person. A registrable person means a beneficial owner or relevant legal entity. A beneficial owner is an individual (or individuals) who owns or controls more than 25% of the shares, voting rights or interests in a company through direct or indirect ownership or, failing that, an individual who has control over the company or LLC as applicable by other means. Where neither applies, the individual who holds the position of senior manager of the company or LLC as applicable is considered to be the beneficial owner. The key is to note that the threshold of share ownership is more than 25%, not at 25%. A relevant legal entity is any legal entity or legal arrangement that would be a beneficial owner if it were an individual. This information must also be filed with the Bermuda Monetary Authority but is not publicly available.
Bermuda Casino Gaming Act 2014. Under it the commission can approve up to three provisional casino licences, in addition to the provisional licence granted to the developer of the St Regis hotel project in St George’s. According to the application process, a $600,000 application fee must accompany all applications, while a $1.4 million provisional licence issue fee is payable by applicants awarded a provisional licence. Those making it through to the final stage will then be subjected to a further $1 million casino licence issue fee. The Hamilton Princess last year became one of the first resort properties to be named a “designated site”, making it eligible to apply for a casino licence. It was revealed earlier that this year both the Fairmont Southampton and the Morgan’s Point hotel had applied for site designation.
Bermuda Casino Gaming Regulations 2018. On October 16, 2018 The Bermuda Casino Gaming Commission announced the Casino Gaming Regulations 2018 were designed to guarantee games are fair, honest and played with “security and integrity” as well as “sound operational and financial controls” in casinos. The regulations also include provisions to make sure systems are in place to protect vulnerable players and that any fees or taxes are logged and paid.
Bermuda Commodities Exchange Act 1996
Bermuda Commodities Exchange Clearing House Act 1996
Bermuda Contracts (Rights of Third Parties) Act 2016. Became operative on March 28, 2016. The legislation allows persons who are not a party to a contract to enforce its terms. Of particular interest from a funds perspective is that fund documentation that often contain indemnities in favor of third parties, such as investment management agreements, can now be enforced directly by such third parties.
Bermuda Deposit Insurance Corporation Act 2011. This legislation to provide deposit insurance of $25,000 per depositor is the result of a collaborative effort between financial regulator the Bermuda Monetary Authority (BMA), the Ministry of Finance and the Bermuda Bankers Association (BBA). In addition, technical advice was provided by the International Monetary Fund. Deposit insurance is a guarantee to depositors in a bank that they will be compensated up to a maximum specified amount of their deposits upon failure of that institution. It has three main objectives, to protect small depositors; promote stability in Bermuda's financial system and economy by providing prompt reimbursement or access to insured depositors' funds; and promote competition between financial institutions in Bermuda. Under the legislation, membership of the scheme is compulsory for all relevant financial institutions. The premiums are paid by the banks as a fixed percentage of insurable deposits. The Bermuda Deposit Insurance Corporation has an appointed board of directors to run the scheme. The legislation also entails elements on protection from personal liability and preservation of confidentiality.
Bermuda Monetary Authority Amendment Act 2014. Sought to repeal a section of the Insurance Act which would require certain financial services, Allows the Bermuda Monetary Authority (BMA) to increase its fees for certain services next year by three per cent: fees regulated by the BMAs own 1965 act, the Insurance Undertakings Act 1967, the Investment Business Act 2003, and the Investments Funds Act 2006. Although there are a few exceptions, generally three per cent reflects a sound balance between the need for additional financial resources, and the ability of regulated firms to absorb it, The amendment see added fees and regulations for the trade unions and friendly societies wanting to provide mutual insurance.
Bermuda Monetary Authority Amendment 2012. Changed insurance company fees, clarifies the Authority’s fees for Bermuda insurance companies introduced in 2012 and recognizes “the need to be flexible and responsive during the present economic climate.
Bermuda Monetary Authority Amendment Act 2018. 2018. December 11. New, wide-ranging fee increases by the Bermuda Monetary Authority have been approved by the Bermuda Government. However, the changes will be phased in over a three-year period rather than two years as had originally been proposed. A review this year concluded that the BMA will require up to 39 additional full-time staff by 2020 to continue effectively discharging its duties, while its annual operating costs have been projected to rise to $61 million by 2020, up $11.7 million on last year. Against this backdrop, Curtis Dickinson, Minister of Finance, passed an order in the House of Assembly on Friday that provides for amendments to the fees charged by the BMA. Insurance and reinsurance companies, banks, corporate service providers, trusts and credit unions will be among those affected by the changes. Mr Dickinson made reference to the review conduced by the BMA with assistance from an international consulting firm, that resulted in fee change proposals. The authority recorded a budget deficit of $1.63 million last year, its fifth annual shortfall in the last decade. It expects to record a further operating loss this year. It has previously covered budget shortfalls from its general reserve account. Last year its reserves shrank by $2.1 million. As a regulator, the BMA works to protect and enhance Bermuda’s reputation and position as a leading international financial-services centre. It has said it is enhancing its risk-based supervision approach, coverage and service levels; meeting evolving international standards, but to do so it needs to further enhance its operations and add to its supervisory resources. One way this can be achieved is by raising fees. Mr Dickinson said the BMA recognized market conditions remain challenging in a number of regulated sectors, and this had been taken into account when the proposed revised fees were assessed. During the global financial crisis that started around 2008, and continuing in recent years, fee increases by the BMA were moderated to reduce the impact on the financial-services industry. Mr Dickinson said: “This has, however, contributed to the authority operating at a deficit, with resultant budget shortfalls being covered from existing reserves.” He added: “Consequently, certain existing fees will be adjusted and/or new fees be introduced to reflect the authority’s resource utilization for these ongoing supervisory activities. Also, the basis on which fees are charged will be simplified so that entities will find it easier to determine what fees they need to pay.” One of the four guiding principles that will inform the revised fees is the need for the island to maintain its competitiveness and “account for pricing relative to peer regulatory bodies to ensure Bermuda remains competitive”. Mr Dickinson said that during the consultation process and subsequent meetings between the BMA and industry stakeholder groups, the most prevalent comment was the need for the fee changes to be phased in over a longer period of time, which has resulted in the proposed timescale being altered from two years to three. He added: “The insurance industry’s request that the authority have greater flexibility regarding fees to be applied in specific circumstances, such as where affiliated insurers have similar risk profiles and in cases where combined application fees would otherwise be payable, has also been addressed via separate creation [in the Insurance Act] of a power to exempt or reduce fees.”
Bermuda Monetary Authority (Collective Investment Scheme Classification) Regulations 1998
Bermuda Monetary Authority (Financial Institutions) (Control) Regulations 1994
Bermuda Monetary Authority Act 1969
Bermuda Monetary Authority Act 2006. It tightened up financial procedures on the Island and made it easier for whistleblowers to expose wrongdoing.
Bermuda Solvency Capital Requirement (BSCR), an enhanced solvency regime applicable to Bermuda's Class 4 re/insurers.
Bermuda Stock Exchange Company Act 1992
BIU Members Credit Union Co Op Society Act 1983.
Blockchain areas. 2017. November 23. Bermuda is preparing a welcome mat for companies and innovators involved in blockchain and cryptocurrency technologies. With a number of countries around the world jockeying for position in the hope of being among the lead jurisdictions for distributed ledger technology and cryptocurrencies — Bermuda is “moving quickly and aggressively” to lay out its stall. A task force comprising two teams has been created by the Bermuda Government to develop and put in place strategies for the island. And a self-governing cryptocurrency association is to be formed, which will have a code of conduct for Bermudian-based token issuers, including measures to ensure enhanced business transparency, and meet Know Your Customer and anti-money laundering requirements. Premier David Burt announced the initiatives yesterday and revealed that, following meetings in New York, a cryptocurrency trader is to establish a physical presence on the island. In addition, the Premier introduced Aron Dutta, recently senior partner of the Global Blockchain Centre of Competency at IBM, and a former head of thought leadership and strategy on fintech at Cisco. Mr Dutta is the founder of Vaphr Inc, which is involved in creating, funding and building business models that use technologies including blockchain, cryptology, and artificial intelligence. He is also founder of Ambika Group, which is in the process of incorporating its global blockchain platform in Bermuda. Mr Dutta said Bermuda has huge growth potential in the area of blockchain and cryptocurrencies. Citing the island’s “robust compliance regime”, regulatory environment and legal system, he added: “In our assessment, Bermuda will become a centre for a technological and economic transformation especially in the areas of fintech, medtech, and edtech leveraging the potential of the country’s current and future human capital.” Possibly by as soon as January or February, the Government aims to have legislation in place to regulate firms operating in or from Bermuda that use digital ledger technologies “to store or transmit value belonging to others, such as virtual currency exchanges, coins and securitised tokens”. The task of creating a regulatory framework for DLT enterprises to set up and operate in or from Bermuda will be directed by Wayne Caines, Minister of National Security, who has taken on responsibility for government’s ICT Policy and Innovation. The project task force has been split into two teams, one focused on business development, the other on legal and regulatory matters. Those involved in the task force include government technical officers, representatives from the Bermuda Business Development Agency, and legal and industry specialists in fintech. Mr Burt said: “The challenge will be in figuring out how Bermuda can set-up an industry that ensures cryptocurrencies are well-regulated, is a safe environment for cryptocurrency firms to grow, whilst also ensuring that this new regulatory environment protects both consumers and the reputation of the jurisdiction with specific attention being given the our anti-money laundering and antiterrorist financing obligations.” The Ministry of Finance and the Bermuda Monetary Authority are working on a document that will confirm that utility tokens are not a security as long as there is no promise of future value. “This will allow companies from all over the world to set up in Bermuda for crowd funding,” said Mr Burt. The taskforce’s legal and regulatory working group will also confirm that utility tokens are not prohibited or contravening any local legislation. Mr Burt said: “Bermuda is committed to building upon its position as an innovative international business centre and is considering a complementary regulatory framework covering the promotion and sale of utility tokens, aligned with the DLT framework. Bermuda is a significant option for blockchain and cryptocurrency-related businesses. We are expeditiously developing rules that ensure cryptocurrencies and related tokens are well-regulated, [that there] is a safe environment for those firms to grow, whilst also ensuring that this new regulatory environment protects both consumers and the reputation of the jurisdiction.” Bermuda is no stranger to the wider world of cryptocurrencies. At the beginning of this month the e-sports company Unikrn Bermuda Ltd launched its sports betting token Unikoin. And in 2007 Bermuda-headquartered Hub Culture launched Ven, the world’s first digital currency. Speaking in June, Stan Stalnaker, founder of Hub Culture, said: “Bermuda is an ideal location to lead the global trillion-dollar market for digital currency. Bermuda has a chance to be 100 times bigger than it is, financially. There is a race on to see which jurisdictions will dominate the largest new asset class in a generation.”
Blockchain Legal and Regulatory Working Group members
Blockchain Business Development Working Group. Members:
Bribery Act 2016. Details plans to modernize Bermuda’s laws on corruption and bribery. Modeled largely on the UK’s Bribery Act 2010. The Act provides a modern and comprehensive scheme of bribery offences, in order to allow investigators, prosecutors and the courts to tackle bribery effectively whether committed in Bermuda or overseas. It will help to enhance Bermuda’s international reputation for the highest ethical standards. It creates the following new offences: one general offence of bribery covering the offering, promising or giving of a financial or other advantage; another general offence covering the requesting, agreeing to receive or accepting of a financial or other advantage; a specific offence of bribing a foreign public official; a specific offence of failure by a commercial organization to prevent bribery, although it is a defence if a commercial organization can prove — on the balance of probabilities — that it had ‘adequate procedures’ in place to prevent persons associated with it from bribing; a specific offence of failing to fulfill a duty to report bribery, such duty arising where a person exercising functions on behalf of a public authority is offered or receives an advantage which may constitute bribery; and a specific offence of interfering with such a duty to report bribery. Legislation effective September 1, 2017.Casino Gaming (General Reserve and Casino Taxes) Regulations 2017 and Casino Gaming (Casino Fees) Regulations 2017. Passed in February 2017. It is feared by some MPs the fee structure would deter operators coming to Bermuda. Grant Gibbons, the Minister for Economic Development, brought the new regulations before the House. He said that the fee structure and 10 per cent tax rate established in the regulations were “clearly in accord with the stated policy goals of the 2014 Casino Gaming Act”. The fee schedule sets the casino licence application fee at $600,000 and the provisional licence issue fee at $1.4 million. Under the regulations a casino licence issue is set at $1 million, while an annual casino licence fee is $1 million, “less any applicable discount”. The regulations state: “The schedule sets out the fees payable which are in addition to any requirement to reimburse the Commission for the costs of any investigation pursuant to the Act of any regulations”.
Charities Act 2014. In effect since December 31 as are the Charities Regulations 2014. The new Act designates the Registrar General as the authority for supervising charities, and gives the Registrar the power to conduct investigations, seize documents, to disclose information in his possession to other public authorities and to charge an annual registration fee. The 2014 Act is based on the UK Charities Act yet some of it is specific to Bermuda.
Commission on Racial Equality (CURE). Melbourne House, Suite 202. 11 Parliament Street, Hamilton HM KX. Telephone (441) 296-0613 or fax (441) 296-9142. In other countries, these racial guidelines and regulations apply only in the public sector. But the Bermuda Government has made them apply in the private sector as well.
Companies and Limited Liability Company Amendment Act 2017. Companies operating out of Bermuda will now be required to retain their records for a fixed period of time after going into liquidation. Bermuda's ability to maintain its competitive standing in the global community requires that it continue to update the legislative framework as needed to meet international standards.
Companies and Limited Liability Company (Beneficial Ownership) Amendment Act 2017. Intended to boost Bermuda’s credentials as a transparent offshore centre. The legislation is designed to ensure the island meets transparency standards for registered businesses in line with Financial Action Task Force and Organisation for Economic Cooperation and Development rules. The is also designed to support Bermuda’s obligations under a 2016 agreement between Bermuda and the UK to exchange of beneficial ownership information and the development of a central registry.
Companies Act 1981. The principal statute governing the formation and operation of Bermuda companies. The Act has since been amended to provide for the requirement that a Register of Directors of Bermuda companies must be lodged with the Registrar of Companies, where it will be publicly available for inspection. The Register of Directors must contain the following information with respect to each director of a Bermuda company: an individual, his present first name, surname and address; or a company, its name and the address of its registered office.
Companies Amendment Act 2009.
Companies Amendment (No 2) Act 2011. Includes a raft of measures which will have a significant impact on Bermuda’s international business sector. Outlines a number of changes to the Companies Act 1981, tabled by the Ministry of Business Development and Tourism. Among the key changes are the permitting of sole and corporate directors of Bermuda companies, the option to waive annual general meetings and the removal of prohibitions on providing financial assistance. Other amendments include the use of paperless share transfers for listed companies, the ability for Bermuda companies to declare dividends or distributions when recording a profit, notwithstanding that the company may carry a negative retained earnings balance, and the addition of a new process for mergers as an alternative to the existing amalgamations procedure.
Companies Amendment (No 2) Act 2017. Refers to the change made in the last Budget to raise company licence fees — from $1,995 to $25,000 — specifically for those companies without a physical presence on the island. This was intended to be a defence for Bermuda in the tax-haven debate, as it targets those subsidiaries with postbox addresses, used by multinational corporations to minimize their tax bills. The amendment will carve out exclusions from the fee hike for companies in specific lines of business, namely the ownership, commercial management or operation of ships or aircraft; pharmaceutical operations; research and development in bioscience or biomedicine; or charity.
Companies and Limited Liability Company (Initial Coin Offering) Act 2018. Treats an initial coin offering as a restricted business activity requiring consent from the Minister of Finance. The legislation will position Bermuda as “one of the few countries in the world to specifically regulate ICOs”, Under the Act, an application for consent would be required to include specific details regarding the company conducting the ICO and the underlying digital asset offered for sale; The development and implementation of any product, service or other project related to the ICO, including timelines for completion; The target amount to be raised through the ICO; Rights, features, functionality and intended transferability of the digital asset offered for sale.
Companies and Partnerships (Fees) Act 2018. Increases certain fees charged under the Companies Act 1981, the Limited Partnership Act 1883, the Exempted Partnership Act 1992, and the Overseas Partnership Act 1995.
Contributory Pensions (Amendments of Benefits) Order 2018. Increased them by 1.4%
Corporate Services Act.
Corporate Services Amendment Act 2013 which raised corporate services tax from four percent of gross earned revenue to six percent.
Cost of Living Commission Amendment Act 2018. Changed the number of commission members from three to between seven and 12. The Premier and Minister of Finance said the additional members would help “formulate ideas and suggestions on how best to reduce the cost of living”.
Credit Unions Act 1982
Court of Appeal Amendment Act 2004.
Customs Tariff Amendment Act (No. 2) 2018. Introduced “Sugar tax” legislation to Bermuda on May 11, 2018. Includes several changes to import duty rates relating to sugar and sugar products. A Government spokesman said: “This follows the Sugar Tax Consultation Interim Report of March 2018 which concluded that there was community support for the proposed sugar tax and that fruit juices and milk products should be excluded. There was also public support for a duty rate of 75 per cent and that the tax should include dilutables (cordials and powders). Additional feedback from the consultation regarding chocolate and diet sodas will be included in future updates to the customs tariff, as it requires further adjustments to the tariff codes.” The Ministry of Health also released the final report of its Sugar Tax Consultation online. The report found that 52 per cent of the 345 respondents supported taxing the included items. 10 per cent supported the tax, but believed certain items should be excluded, including raw sugar, coffee mate, yoghurt covered raisins and non-alcoholic beer. The report found 44 per cent of respondents were against the tax. Some of the reasons for opposing the tax included the fact there were other foods with sugar that were not part of the tax, concerns about Government regulating food and the inclusion of sports drinks which are used by athletes.
Customs Tariff Amendment Act No 2 (2019). Sees an increase in duty on alcohol, cigarettes and tobacco.
Debt Collection Act 2018. Designed to create a framework to regulate debt collection. The new law will help protect consumers from predatory debt collection practices. It seeks to introduce fair business practices that will provide a level playing field for creditors and debtors. With five components. It will create a licensing authority for debt collector agencies and establish regulations to prohibit unfair practices. The legislation was drawn up to also promote financial transparency, establish complaint procedures and create both offences and a right of appeal to a debt collection tribunal. Mr Roban added: “Government oversight will be accomplished by a comprehensive licensing regulation framework for those entities engaging in debt collection under the newly created debt collection authority. The authority will consist of officers within Consumer Affairs. The regulatory functions include, but are not limited to, oversight, licensing, education, investigation and enforcement.” The legislation also caps a creditor’s commission to a one-time payment no higher than 20 per cent of the original debt amount and includes rules for a maximum two per cent monthly administration fee on the outstanding balance, which would only be payable if costs are incurred by required communication with the debtor in that period.
Dental Practitioners Amendment Act 2019. It requires dentists to have indemnity insurance to register as a dental practitioner. It also gives the Bermuda Dental Board power to impose additional registration requirements on dental practitioners for some procedures when it believed it was needed to protect patients.
Digital Asset Business Act 2018. Referred to in the House of Assembly “an exciting, landmark achievement”. A team made up of people from both the private and public sector, as well as staff from the Bermuda Monetary Authority will enable the BMA to regulate and protect digital asset business. This legislation lays the foundation for growth in an area that Bermuda can and will lead. Requires companies dealing in digital assets to be licensed.
Economic Substance Act 2018. MPs on both sides of the House of Assembly vowed to stand united against the “bullying” the European Union as they passed new rules - see http://www.royalgazette.com/assets/pdf/RG3964221217.pdf - designed to get tough on international business. Curtis Dickinson, the finance minister claimed the House would back the Bill “holding their noses” as politicians from the One Bermuda Alliance joined those in the Progressive Labour Party to express their displeasure at being forced to amend the island’s laws. Mr Dickinson said: “It is our people’s renowned hospitality to service our tourists and our people’s intellect and professionalism to service our international business clients that enables Bermuda as a country to survive. Some parts of the world are envious of Bermuda’s success and have now openly attacked the core of our economy, our strongest economic leg, our international business industry. I speak of the European Union, who are fuelled by, or use the term egged-on by, non-governmental organisations that believe that if you do not have an income tax regime, then something must be wrong with you, that if your tax regime is consumption-based instead of income-based then you must be the cause of diverting other countries’ tax revenue away from potential use to assist to feed some developing countries and care for refugees, migrants, war victims, et cetera. Such NGOs have clearly won this row for they have convinced policymakers in the European Union to attack all low or no-income tax jurisdictions, including Bermuda. Mr Dickinson was speaking as he tabled a revised version of the Economic Substance Act 2018 during a special sitting of the House of Assembly, held so legislators could beat a year-end deadline for the introduction of laws to combat companies with only a technical base offshore. Economic substance means that companies must show a physical presence, employees and revenue-generating activities. The Bill was tabled after The Royal Gazette revealed that the European Code of Conduct Group was understood to have rejected the original version of the Act, tabled on December 7. Changes included the economic substance requirement which referred to “adequate expenditure incurred in Bermuda”, now changed to specify “adequate operating expenditure”. Bermuda was one of more than 40 jurisdictions that promised to pass legislation by the end of this year to address the bloc’s concerns about tax avoidance by multinational companies. Mr Dickinson said that despite the Organisation for Economic Co-operation and Development’s view that Bermuda was “largely compliant”, or not harmful, the EU decided that low or no-income tax jurisdictions would be branded as non-cooperative unless they submitted to its economic substance requirements. He added that the OECD planned to replace the EU economic substance regime with its own framework but that was still a “work in progress”. Mr Dickinson said later: “I understand that many of us are holding our noses as we say ‘yes’ but Bermuda has been resilient and we’ve always managed to find a way.” The Bill also includes provisions to monitor firms and enforcement for those who fail to comply, from fines to being struck off the register of the companies. Patricia Gordon-Pamplin, the Opposition’s finance spokeswoman in the House, warned that some firms might consider relocation. She said: “We have been asked to do things that other countries, larger than ours with more resources than ours, don’t have to do.” Ms Gordon-Pamplin said there was a perceived “threat” posed by Bermuda to the stability of larger countries because of its economic success. She added: “So they’ve come with a club and with the bullying attitude to which the minister referred, to say, ‘you will do things our way’.” But Ms Gordon-Pamplin added: “We will still find a way to outstrip and excel because that’s what we do.” David Burt, the Premier and the former finance minister, said some people feared the legislation indicated “the end of Bermuda”. He added: “I want to make it very clear that I am sure that all 36 members who sit inside of this House will make sure that that is not the case.” Mr Burt said that the Government would watch to ensure the rules are applied equally to all affected countries. He added: “Over the next six months, we must make this regime work, this government will lead that effort and we expect to have all hands on deck to ensure that we can make a success of it.” Wayne Furbert, the junior finance minister, said he was “optimistic” the island could benefit and said it was estimated that about 11,000 of Bermuda’s 15,000 registered companies would be affected by the legislation. He added: “Just imagine, if half of those companies were to put boots on the ground, what impact would it have on our economy? First of all our GDP would rise significantly."
Electricity (Regulatory Authority Fees) Regulations 2017. Electricity users will pay a slight increase to fund regulation of the industry.
Electronic Communications (Regulatory Authority Fees) Regulations 2017. The general regulatory authority fee is increased from 1.5 per cent of turnover to 1.75 per cent.Electronic Transactions Act 1999.
Employment Act 2000 (as amended). Employment law in Bermuda comprises local legislation (statutes enacted by Parliament) and English and Bermuda common law (case law decided by courts over the years). See http://www.bermudalaws.bm/Laws/Consolidated%20Laws/Employment%20Act%202000.pdf and http://www.bermudalaws.bm/Laws/Annual%20Laws/2006/Acts/Employment%20Amendment%20Act%202006.pdf respectively, which applies to all employees working wholly or mainly in Bermuda, including foreign employees. They set out minimum statutory entitlements, including notice of termination rights and various leave benefits (vacation, sick leave, maternity, bereavement, public duty leave, etc. They mandate that there be a written contract (“Statement of Employment”) in place setting out fundamental terms of the employment relationship. If the contract contains more favorable terms than the Act, then the contract prevails. Parties cannot contract out of the Act’s minimum requirements. It provides that an employee can only be dismissed for a valid reason, such as ability, performance, conduct or business operational requirements (redundancy); that statutory redundancy pay (“severance allowance”) must be paid if conditions of redundancy are made out (capped at 6 months’ wages). It protects employees from disciplinary action or termination (“unfair dismissal”) on human rights related grounds or for being a whistle-blower. It defines constructive dismissal (also “unfair dismissal”) and provides compensation for same based on the employer’s unreasonable conduct. It provides for a mandatory warning process for employees engaging in misconduct (short of serious misconduct) or unsatisfactory performance and time to improve (employees engaged in serious misconduct related to the employment relationship can be summarily dismissed). It has a complaint process for breach of the statute to an Inspector and then to the Employment Tribunal, with a 3 month limitation period. Compensation is limited to 6 months’ wages or reinstatement. It shows that either side can terminate the contract for any reason and without notice during a contractual probation period (if there is one, the contract must state whether there is one or not). It gives priority to an employee’s claims for unpaid wages and accrued vacation pay in a winding up action. Note that The Bermuda Immigration and Protection Act 1956 (as amended) provides that employees who are not Bermudian or a spouse of a Bermudian or a Permanent Resident’s Certificate (PRC) holder must have a work permit issued by the Department of Immigration to work in Bermuda. These can range from 3 months to 10 years in time (the latter subject to several stringent criteria) and are renewable. The time for processing is approximately 8 to 10 days (for “fast track” or “temporary permits”) or 6 to 10 weeks (for standard permits of 1 year or more). A work permit will not be issued where a qualified Bermudian, spouse of a Bermudian, non-Bermudian dependant of a Bermudian, Permanent Resident Certificate holder or other person with a qualifying connection to Bermuda applies for the position. Employees are generally subject under Bermuda immigration policy to a maximum of 6 years of working under a permit in Bermuda (“terms limits.”) Certain positions can be deemed “key” to a business and the holder of that position can be exempted from term limits or receive an extension of to their term limit of up to 3 additional years. Other grounds for exemption can be made out (e.g. worldwide shortage in that industry, company hardship, etc).
Evidence (Audio Visual Link) Act 2018. It will make it possible for vulnerable witnesses to give evidence and be cross-examined remotely during court cases. Attorney-General Kathy Lynn Simmons, the Government Senate Leader, said it would also cut costs by allowing overseas witnesses to give live testimony without having to travel to the island
Exchange Control Act 1972
Exchange Control Regulations 1973
Exempted Partnerships Act 1992
Exempted Partnership Amendment Act 2009
Exempted Undertakings Tax Protection Amendment Act 2011, which extends a guarantee that the Bermuda Government will not charge exempt companies any taxes on profits, income or capital gains. The amendment prolongs that guarantee until 2035. While Premier Cox said the Government had no intention of starting taxation based on profit, income or capital gains, she said the amendment was meant to reassure businesses and make them more comfortable investing in the Island. She said that extending the agreement had always been on the Government agenda, but had been put off in the past because of international concerns that the exception could lead to harmful business practices, favoring international businesses over local.
Financial Services Tax Act 2017. March 17. A Bill to introduce a new tax for financial services won narrow support in a House of Assembly vote after Opposition MPs argued it would result in higher fees for “Mr and Mrs Bermuda”. Finance minister Bob Richards admitted that there was no initial consultation with any of the affected parties with regards to the Financial Services Tax Act 2017. The Bill came to a vote, with Government Whip Susan Jackson counting 15 votes against, and 15 votes in favor, herself casting the deciding vote in favor making 16 in favor. The Bill was branded “The Airport and America’s Cup Tax Bill” by Progressive Labour Party MPs Diallo Rabain and Kim Wilson. However, Mr Richards countered that the Bill “is the PLP deficit tax increase” rather than an “airport or America’s Cup tax”. The Act will see money service businesses hit with a 1 per cent tax on their aggregated incoming and outgoing transmission volume. That figure was reduced from the 5 per cent announced in the Budget Statement, after consultation with the business services industry, according to Mr Richards. Banks will pay 0.005 per cent of their consolidated gross assets, while local insurance companies will have a 2.5 per cent tax on gross premiums earned, excluding premiums from health insurance. Mr Rabain and Ms Wilson claimed that the new tax on banks, insurance companies and money service businesses, expected to generate more than $11 million per year, would eventually impact “Mr and Mrs Bermuda”. Ms Wilson, shadow health minister, said: “If I am an insurance company, I will not eat that — I’ll pass it on to the consumer.” Speaking on “astronomical” bank fees, she described the Bill as “reverse Robin Hood, that takes money from the poor, or in this case the middle class, and gives it to the rich”. Shadow Attorney-General Michael Scott echoed concerns about the equity of the Bill and PLP backbencher Wayne Furbert asked: “Is this the best they can do?”, while deputy Opposition leader Walter Roban said the move could bring concern to the business community. Opposition leader David Burt, who pointed out that Bermuda is “the most expensive place in the world to live”, also insisted this “Act here will make it more expensive to fill the revenue hole to pay for the Minister’s projects”. He also noted that the tax on money services businesses had been dropped, “just like the mysterious customs duty hikes, which have magically disappeared”. Mr Richards stressed that the “overriding objective and the overriding risk to the Bermuda economy, to Bermuda as a country and to the Bermudian people is the excessive debt that this Government has”. Noting that “nobody likes to pay more taxes”, he added “we made a decision because nobody was going to agree to it”. Mr Richards said the Government had made a decision to reduce the deficit “that we inherited from the other side”. Responding to questions from the Opposition about why the tax on money service businesses had been reduced to 1 per cent, Mr Richards said 5 per cent was deemed “way too high” after consulting with stakeholders of the business service industry. But he added that it is “really not that big a deal in so far as the dollar amount of the taxes raised” because money service businesses “are very small compared to the business operations of the banks and insurance companies”. But, pressed by Mr Burt about what consultation was made with the money service business before the 5 per cent was set, Mr Richards admitted that there was none. And when Mr Burt questioned what consultation was done with the banks and insurance companies, Mr Richards conceded that “this tax was not arrived at with prior consultation with the members involved”. He added: “We used comparative numbers with some other similar jurisdictions to Bermuda.” And when pressed what these were, he said: “Mainly the Bahamas — these rates are very similar to what they use.” MPs voted along party lines, with Independent MP Shawn Crockwell voting in favor.
Financial Services Tax Amendment 2019. Taxes on banks and some insurance premiums will bring in millions of dollars in extra revenue. Repercussions include the rise of car and bike insurance wll rise, make the cost of living in Bermuda even more expensive.
Fintech Development Fund. Enacted July 2018. When the fund is set up and contributions can be received, the Government will make such contributions public. Government is pleased that companies are looking to set up in Bermuda, planning to invest in building Bermuda's fintech industry and supporting community initiatives.
Fisheries Regulations which specify potential penalties for violators.
Friendly Societies Act 1868.
Government Fees Amendment (No 2) Regulations 2017. Provides authorization for government fees to be collected from the energy sector as recommended by the Regulatory Authority.
Health (Miscellaneous) Amendment Act 2017.
Hotels Concession Act. Focuses on direct investment and new hotels.
Insurance Act 1978
Insurance Amendment Act 2008.
Insurance Amendment (No 2) Act 2015. Intended to clarify and strengthen existing laws, bringing the Island toward Solvency II equivalence. The legislation also includes a new section, which requires commercial insurers to have a head office on the Island, although he said the requirement would be handled on a “flexible and proportional” basis.
Insurance Amendment Act 2018. Ensures those who hold insurance policies are given priority in the event that an insurance company is wound up.It will protect policy holders by giving them higher priority in the winding up of an insurer.
Insurance Returns & Solvency Amendment Regulations 2005.
International Co-operation (Tax Information Exchange Agreements) Amendment (No 2) Act 2017. It addresses shortfalls in legislative compliance in Common Reporting Standards, and Country by Country Reporting.
Interest and Credit Charges (Regulation) Act 1975
Interpretation Amendment Act 2018. Government said a move away from newspaper advertising would remove an “administrative burden” that cost taxpayers $319,000 a year.
Investment Business Act 1998 and 2003.
Investment Business Regulations 1999.
Investment Funds Act 2006. Licensing requirements of fund managers, codes and enforcement powers. Also makes it easier to register and license funds by eliminating unnecessary administrative procedures. After collaboration between the Bermuda Government, Bermuda Monetary Authority (BMA) and industry stakeholders, a 2013 amendment to the 2006 Act introduced two new classes of exempt funds: the Class A Exempt Fund (Class A Fund) and Class B Exempt Fund (Class B Fund). The defining features of a Class A Fund are light touch regulation and speed to market. Subject to certain eligibility requirements (broadly experienced/high value investors with a manager licensed in a recognized jurisdiction or with $100 million of assets under management) the fund can be launched immediately upon filing with the BMA. If the Class A Fund qualifications surrounding the investment manager are not met, a Class B Fund may be appropriate. Class B Funds also benefit from a less onerous regulatory regime, although an application to the BMA is required. Bermuda is one of the few jurisdictions where legislation permits the appointment of managing trustees. A managing trustee, who may be an investment manager, may be appointed as co-trustee with another trustee (often referred to as a custodian or administrative trustee). This enables the trust instrument to provide the managing trustee with exclusive control over management of the fund’s investments with the administrative trustee not liable for the acts or omissions of the managing trustee. Note that there have been recent amendments. This Funds Act was amended by the Economic Substance Act 2018 and the Investment Funds Amendment Act 2018. The Substance Act became operative on December 31. The Amendment Act will become operative during the first quarter of 2019. The Funds Act is the primary regulation for open-ended investment funds, which were previously divided into Authorized Funds, Exempted Funds and Excluded Funds. Authorized Funds were split into four categories: Institutional Funds, Administered Funds, Specified Jurisdiction Funds and Standard Funds, while Exempted Funds were split into two categories: Class A Exempt Funds and Class B Exempt Funds. There was only one category of Excluded Funds, being Private Funds, and often these terms were used interchangeably. The recent legislative changes impact Exempted Funds and the Excluded/Private Funds. Exempted Funds will now be known as Professional Funds to reflect a shift away from the self-certification process to launch in relation to Class A Exempt Funds and the application for exemption for Class B Exempt Funds. The term Excluded Funds will be dropped from the Funds Act. This makes sense given that Private Funds will no longer file notification to the Bermuda Monetary Authority that they qualify for exclusion from the requirements of the Funds Act. Going forward, Professional Funds and Private Funds will collectively be known as Registered Funds. These funds now must apply to the BMA for registration and approval before commencing trading. Professional Funds will continue to have two categories like the existing Exempted Funds, but they have been renamed as Professional Class A Funds and Professional Class B Funds. Professional Class A Funds must meet the same requirements as Class A Exempt Funds to be registered under that category. This includes being open only to qualified participants, appointing a licensed investment manager or having gross assets under management of $100 million, or being part of a group that does, appointing an officer, trustee or representative resident in Bermuda, appointing certain service providers and preparing financial statements in accordance with IFRS or GAAP. The main difference will be in the application process, which will entail an application and satisfaction by the BMA that it meets the criteria before it is registered as a Professional Class A Fund. Professional Class B Funds must meet the same requirements as Class B Exempt Funds to be registered under that category. This includes a similar requirement to the Professional Class A Fund except that there is no licensing and gross asset requirement in relation to the investment manager. Instead, service providers must be fit and proper to perform the relevant functions. In relation to Professional Class B Funds, the BMA must notify the applicant in writing of its decision within ten days from the date of application and if not, the BMA shall be considered to have granted registration. This is similar to the previous exemption requirement. Both Professional Class A Funds and Professional Class B Funds must appoint a custodian. This requirement may be waived in relation to a Professional Class B Fund if it satisfies the BMA that alternative arrangements have been made. The Amendment Act once operative will also allow this for Professional Class A Funds. Private Funds, instead of filing notification that they qualify for exclusion, now must register under the Funds Act. In addition, they must appoint a local service provider authorized and regulated by the BMA. The definition of “service provider” includes corporate service providers and as such, most funds will meet the local service provider requirement through the engagement of a Bermuda corporate service provider. Private Funds are also required to appoint a custodian however this requirement may be waived if the fund meets certain requirements set by the BMA. This is useful for certain funds, including ILS funds that invest in an underlying reinsurance company. Private Funds also have additional annual filing requirements. The operators of a Private Fund must certify annually that it continues to satisfy the qualifying criteria. Additional information that must be filed annually includes information on the net asset value and its underlying assets, a copy of the fund’s management account or audited financial statements and information on any material changes that took place during the year. The Substance Act has also given the BMA greater powers of supervision and enforcement over Registered Funds and the power to make rules concerning investor disclosures and related matters. Funds existing at December 31 have six months to comply with applicable provisions of the Funds Act. Therefore, any operators of Class A Exempt Funds, Class B Exempt Funds and Private/Excluded Funds should take steps to ensure that they comply. The implementation of an application for registration brought about by the Substance Act strikes a good balance between regulatory oversight and the commercial needs of flexible investment vehicles. We anticipate that these vehicles will continue to be popular with those looking to set up funds in Bermuda.
Investment Funds Amendment Act 2018. See above.
Limited Partnership Act 1883
Limited Partnership Amendment Act 2009
Medical Practitioners Amendment Act 2019. Legislation designed to streamline the process for complaints against doctors. It increases the size of the committee responsible for dealing with complaints and allow for alternates.Merchant Shipping (ILO) Amendment Act, 2012. The legislation would gave effect to the International Labour Organization's Maritime Labour Convention (MLC) 2006. It is concerned with the safety and welfare of all seafarers serving on board ships engaged on international voyages.
Mortgaging of Aircraft and Aircraft Engines Act 1999. The island has long been a jurisdiction of choice for aircraft financing transactions. Thus the continued positive outlook in the global aircraft finance sector means that protecting the interests of secured parties over aircraft and engines is crucial. Recent amendments - see below - now allow financiers of Bermuda registered aircraft (that are owned or leased or chartered by an entity incorporated or formed in Ireland or a Commonwealth or EEA jurisdiction) to register security interests over both the aircraft and aircraft engines in Bermuda. This amendment complements Bermuda’s aircraft registration policy which was amended in 2015 to permit persons in a Commonwealth or EEA jurisdiction to hold legal or beneficial ownership interests in a Bermuda registered aircraft. This amendment to the legislation follows from another recent amendment allowing Irish SPVs to register aircraft on the Bermudan Aircraft Register. Therefore financiers and operators of aircraft can gain the benefits of Ireland’s extensive double tax treaty network in addition to a Bermudan registration.
Mortgaging of Aircraft and Aircraft Engines Amendment Act 2017. Enacted June 2 of 2017. Legislative amendments have further strengthened Bermuda’s position as an offshore leader in the global aircraft finance market. Removed from the earlier act is the requirement that an aircraft or aircraft engine must be owned by, leased or chartered to, or otherwise in the lawful possession of a company incorporated in Bermuda to be made security for a loan. The amended Act, together with ancillary regulations made under the Act, provide for the establishment and maintenance of a register of aircraft mortgages and aircraft engine mortgages. Prior to the amendment, mortgages could only be registered against Bermuda-registered aircraft and aircraft engines if such aircraft or aircraft engine were either owned by, or otherwise in the possession of, a Bermuda incorporated company. The amendments to the Act now allow security for loans or other valuable consideration to be made by qualified registrants over aircraft registered on the Bermuda register (or capable of being registered); and aircraft engines if: (a) the engine is attached to an aircraft registered on the Bermuda register (or attached to an aircraft capable of being registered) or (b) the engine is for such aircraft and is owned by, or leased to, the owner of such aircraft. The Amendment Act follows amendments that were made to the Air Navigation (Overseas Territories) Order that took effect on January 1, 2015. The amendments expanded the list of persons and corporations eligible to register an aircraft on the Bermuda register of aircraft to include Commonwealth citizens or nationals of any European Economic Area state; bodies incorporated in any other part of the Commonwealth and having their registered office or principal place of business in the United Kingdom or any other part of the Commonwealth; and undertakings formed in accordance with the EEA state having their registered office, central administration or principal place of business within the EEA. However, there still remained a Bermuda policy that continued to stipulate that a Bermuda-registered company was required in the structure for the purposes of registration. It was the removal of the policy at the end of 2015 that resulted in parties being in a position to take advantage of the amendments. On July 27, 2016, Royal Assent was received in respect of the Bermuda International Interests in Mobile Equipment (Cape Town Convention) Act 2016. The International Institute for the Unification of Private Law, commonly known as Unidroit, has now confirmed that the Cape Town Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment will be extended to Bermuda, effective January 2018. The Cape Town Convention facilitates aircraft finance by standardizing transactions involving moveable property with respect to “aircraft objects” (airframes, aircraft engines and helicopters) by the creation of an electronic international registry of “international interests” that are recognized by those states that have implemented the Convention and to provide various default remedies to a creditor (including in the context of insolvency) should the need arise. These latest initiatives by Bermuda underline the importance to the island of having a modern legislative framework to facilitate aircraft financing transactions.
Motor Car Act.
Motor Car Amendment Act 2018 raises the cost of a number of permit fees by five per cent.
Municipalities Amendment Act 2018.
Occupational Safety & Health Amendment Act 2005
Overseas Partnership Act 1995.
Overseas Partnership Amendment Act 2009
Partnership and Limited Liability Company (Beneficial Ownership) Amendment Act 2017
Partnership Amendment Act 2009. Amendments to Bermuda’s partnership law (Partnership Amendments) came into force in December 2015. The Partnership Amendments include an extension to, and clarification of, the safe harbour provisions of the Limited Partnership Act 1883 by setting out a more comprehensive description of the specific acts that do not amount to engaging in the conduct of the business of a limited partnership so as to avoid a limited partner incurring liability. Partnerships are now also able to convert into companies and companies into partnerships.
Payroll Tax Rates Amendment Acts.
Payroll Tax Amendment Act 2017.
Payroll Tax Amendment ((No 2) 2017
Payroll Tax Amendment (No 3) Act 2017. It aims to clarify the definition of what compensation is subject to payroll tax, after a previous amendment earlier this year referred to “gross earnings” for the employee’s portion of payroll tax. The amendment makes clear that the definition of “remuneration” in the Payroll Tax Act 1995 applies to both employer’s and employee’s shares. Therefore “any wages, salary, leave pay, commission, gratuity, fee, bonus, perquisite or allowance” are subject to the tax.
Payroll Tax Amendment Act 2018
and Accumulations Act 2009. Modernizes trust laws and helps remove
some of the complications which might have stopped wealthy families looking
at a jurisdiction to put a trust, from considering Bermuda.
Perpetuities and Accumulations Act 2009. Modernizes trust laws and helps remove some of the complications which might have stopped wealthy families looking at a jurisdiction to put a trust, from considering Bermuda.
Premier, Ministers and Opposition Leader Personal Staffs Act 2019. Name change from earlier Premier and Opposition Leaders Personal Staffs Act. Premier David Burt said the Government will be required to publish all appointments and their salaries every year under changes to the act, to demystify the appointments and terms of service of those men and women who bring to bear their talent and expertise in support of ministers and their policy objectives. The Act will see an end to the ‘gotcha’ nature of ministerial appointments by requiring the annual publication of all such appointments with details of remuneration to be tabled in the House of Assembly. The amendments are in line with the ministerial Code of Conduct. The amendments also allow the creation of a ministerial private office to remove some of the burden on permanent secretaries.
Proceeds of Crime Act 1997. 2016. July 15. Legislators approved an Act toughening Bermuda’s anti-money laundering and anti-terrorism regime. The Proceeds of Crime Amendment (No 2) Act amends the principal legislation by adding real estate and dealers in high-value goods to the scope of supervision. As jurisdictions toughen their legislation, those seeking to launder cash are turning to new avenues such as property and valuables.
Proceeds of Crime (Money Laundering) Regulations 1998
Proceeds of Crime Amendment Act 2017. Seeks to ensure that Bermuda remains in compliance with international standards, improving the country’s regulatory framework with regards to antiterrorism funding, and anti-money laundering.
Proceeds of Crime Amendment (No 1) Act
Proceeds of Crime Amendment (No 2) Act
Proceeds of Crime (Miscellaneous) Act 2018. Sets out the island’s compliance with international financial reporting requirements.
Public Service Superannuation Amendment Act 2018.
Quarantine Act 2017.
Quarantine Amendment Act 2017.
Quarantine (Maritime and Air) Regulations Act 2017.
Real Estate Brokers’ Licensing Act 2017. It brings the island into compliance with standards set up by the Financial Action Task Force.
Regulatory Authority Act 2011.
Segregated Accounts Companies Act 2000 (SAC Act). Makes it possible for a company incorporated in Bermuda to register as a segregated accounts company (SAC). A segregated account contains assets and liabilities that are legally separated from (i) the assets and liabilities of the company’s general account and (ii) such company’s other segregated accounts. Registering as an SAC allows the assets of one account to be protected from the liabilities of other accounts. The statutory divisions between accounts do not create separate bodies corporate, but rather achieve within a single company what could otherwise be achieved by incorporating subsidiaries or by using complex contractual or trust structures. As a result, the accounts will be self-dependent, whereby only the assets of a particular account may be applied to the liabilities of that account. Importantly, a segregated account does not have a separate legal personality; it cannot sue and be sued in its own name. SACs are commonly structured so that the voting share is held by a person or entity that has the responsibility for the day to day running of the company and the account owners usually hold securities linked to a particular segregated account. The SAC Act provides that an asset, right, contribution, liability or obligation that belongs or pertains to a segregated account of an SAC must be ‘linked’ to that segregated account by one of the following methods: An instrument in writing (which includes a governing instrument or contract); An entry or other notation made in respect of a transaction in the records of an SAC; An unwritten but conclusive indication. SACs are commonly used for a variety of insurance purposes, including rent-a-captives, life and annuity companies, transformer vehicles, as well as financial guarantee, securitisation and derivatives structures and special purpose vehicles. They are also frequently used in the mutual and hedge fund industries. Recently, there has been interest in using SACs for segregating intellectual property and for use in the film industry. Sometimes, it is necessary or desirable for segregated accounts within an SAC to contract with each other or the general account. For example, it may be convenient for the general account to provide, and charge for, centralized administrative services to one or more segregated accounts or for a segregated account to invest in another segregated account within the same SAC. Investors in SACs can also change their investment strategy by ‘exchanging’ securities linked to one segregated account for securities linked to another account without capital gains implications. Specific provisions have been included in the SAC Act to avoid any problematic legal issues in connection with internal transactions. This has been accomplished without compromising the paramount notion that a segregated account does not have separate legal personality. The SAC Act also introduces provisions to protect creditors in the event that preferential or other improper transactions are entered into between accounts and, within limits, protects management (on a consensual basis) from exposure to liability consequent upon inevitable conflicts of interest that will arise in internal transactions. The Bermuda courts have considered the SAC structure and upheld the statutory segregation of accounts established by the SAC Act. Bermuda courts have also confirmed the following: When dealing with segregated account companies that it is imperative, in order to preserve the fundamental segregation concept, that the governing instrument is clear and complete, that the byelaws are carefully drafted and that Bermuda legal advice is sought both at the creation of the segregated account company and in the event of a complex and substantial restructuring. Segregated account companies are typically designed to ensure that third party creditors cannot attack the assets in the segregated account that are intended to be available exclusively to meet the claims of creditors who have entered into transactions linked to that specific account. The courts confirmed that only the general assets are available to meet general claims. The winding-up regime applicable to Bermuda companies in general also applies to segregated account companies. The Bermuda court further confirmed that the statutory provisions provided under the SAC Act will also apply providing that each segregated account must be wound up on an individual basis. A liquidator must deal with the assets and liabilities of each segregated account in accordance with the SAC Act and in the absence of contractual terms to the contrary, not apply the assets of one segregated account to the liabilities of another segregated account or the general account. The court held that it was clear on the evidence presented before the court that there was nothing to support piercing the ‘iron curtain’ that applies to the segregation of accounts. It should be noted that there is a risk that the SAC Act may not be upheld or recognized in jurisdictions other than Bermuda where the SAC may operate or have assets, particularly if that jurisdiction does not have corresponding segregated account legislation. Overall, SACs present a unique opportunity to operate ‘mini companies’ within one company thereby avoiding the burdens associated with incorporating various companies while maintaining the benefits of varying investments and ring-fencing assets and liabilities.
Specified Business Legislation Amendment Act 2011. Tightens access and exchange of information. Seeks to amend various pieces of specified business legislation to ensure consistency, transparency, and compliance with international tax information exchange standards, recommended by the Organization for Economic Cooperation and Development.
Stamp Duties Amendment Act 2009
Superyachts and Other Vessels (Miscellaneous) Act 2019. Long-awaited legislation to encourage superyacht visits to Bermuda was applauded by the Bermuda Tourism Authority. Kevin Dallas, the BTA chief executive, said the Act tabled in the House of Assembly on July 8, 2019 could support a branch of tourism primed for growth. Mr Dallas said: “It drives fresh opportunities to our stakeholders and partners, including Bermudian entrepreneurs who will service this high-end tourism sector as it grows. Not only do the vessels consume high volumes of products and services locally, but our research indicates their captains, crews and charter guests spend far more per person than any other kind of visitor — benefiting our economy, from retail and restaurants to small businesses like taxi operators, chefs, and florists. Mr Dallas added: “After the America’s Cup, we highlighted a new legal framework for superyachts as critical to the advancement of Bermuda’s tourism economy. We applaud legislators for moving in this direction and look forward to the realization of this AC35 legacy because it makes Bermuda more competitive with other jurisdictions, stimulates spending in the local economy, and creates increased job opportunities for Bermudians.” The Bill, as tabled, creates new transit and cruising permits for pleasure craft and superyachts, along with charter permits for superyachts. It also removes passenger departure tax for pleasure craft. Similar regulations designed to allow superyachts to charter out while docked in Bermuda were relaxed for the America’s Cup, but the changes were temporary and ended with the conclusion of the competition. The BTA previously expressed hope that the superyachts — which can each pump as much as $127,000 a week into the economy — would make Bermuda a regular stop.
Trade Union Act 1965.
Trusts (Regulation of Trust Business) Act 2001.
Trusts (Regulation of Trust Business) Exemption Order 2002. Considered a cost effective and flexible framework for private trust companies (PTCs) in the offshore world today.
Tourism Investment Act 2017. New tourism legislation is designed to create investment and employment opportunities for Bermudians. Andy Burrows, chief investment officer at the Bermuda Tourism Authority, said that the Tourism Investment Act looked “beyond hotel developers”. Mr Burrows added: “It’s meant to provide incentives for Bermudians who want to invest in tourism and hospitality, and not just non-Bermudians.” The Act, approved in November 2017, aims to encourage hotel, restaurant and tourism development, including attractions, through reduced rate Customs duty, as well as other tax exemptions. The Hotels Concession Act focused on direct investment and new hotels, but the new legislation was meant to be “inclusive of Bermudians who want to invest”. He said that the Act “is as much about job creation as it is about investment”. The potential for 1,500 new hotel rooms on the island along with investment in restaurants and attractions “ought to spur employment opportunities for Bermudians in the tourism sector”. It is hoped the legislation “brings more Bermudians into the tourism economy through not just employment, but business ownership.” The BTA wantes to help “streamline the process” to take no more than “three to six months” from an application to when a response is received from Government. Restaurants and attractions are included in the new legislation as a way to boost Bermuda’s entire tourism framework. Kevin Dallas, chief executive officer at the BTA, said the new Act opened up investment opportunities at “lower thresholds” than those for a major hotel. Mr Dallas explained: “Before, to take advantage of any of these incentives, you had to be a hotel. Under the Tourism Investment Act, there are opportunities for Bermudians to get duty and payroll relief from investing in the tourism sector beyond just hotels.”
USA Bermuda Tax Convention (No 2) Act 2017
USA Bermuda Tax Convention (No 3) Act 2017. The new legislation amends the Act’s regulations-making provision from that of the affirmative resolution procedure to that of the negative resolution procedure as a proactive step, should the USA subsequently invite Bermuda to do something that required Bermuda to make further Regulations or amend the current Regulations under the USA-Bermuda Tax Convention Act 1986. The Premier and Minister of Finance will also amend the Act to provide that a contravention or failure to comply with the terms and conditions of an arrangement for the automatic exchange of information under the Act might be subjected to a civil penalty as prescribed by regulations.
Vending Act 2015. New legislation designed to update vending practices in Bermuda. The new statute replaces the 1894 Peddler's Act, opens the way for the Bermuda Economic Development Corporation (BEDC) to take the reins of overseeing the vendor sector. Under the act the BEDC’s executive director has the power to grant or renew, or refuse to grant or renew a licence, with the final point of appeal being the Permanent Secretary for Home Affairs. It also makes it an offence to conduct vendor activity on all public roadsides unless the vendor has obtained permission from the Department of Public Lands and Buildings. The new statute increases the minimum age you can apply for a vendor licence from 13 to 16. All designated and registered market sites would operate under a minimum set of standards with a business plan being filed at the BEDC. The vendor policy also proposes that authority for issuing vendor licences is transferred from Magistrates’ Court to the BEDC and that criteria is implemented for securing a vendor licence for those persons eligible. A vendor’s licence was not needed for the sale of Bermuda-made products, while other exceptions to the need for a licence include the sale of agricultural produce or horticultural produce by the producer or fish by a registered fisherman.
Virtual Currency Business Act 2018. Part of the Government's ambitious timeline as it vies for first-mover advantage for Bermuda in crypto-business. Initial coin offering legislation, followed by the Virtual Currency Business Act in May 2018.. Before the end of the year it is also looking to set out plans for a Bermuda E-ID scheme, effectively a national digital identification scheme for residents and businesses that will bolster the island’s fintech credentials, and rules for establishing cryptocurrency exchanges. The ICO legislation will treat ICOs as a restricted business activity that will require consent from the Minister of Finance. The new rules will be enacted through amendments to Companies Act 1981 and the LLC Act 2016 and are intended to decrease risks associated with ICOs. Requirements of ICO issuers will include that they collect, verify and maintain customer identity information. With a crucial upcoming assessment of Bermuda’s Anti Money Laundering and Anti Terrorist Financing regime by the Caribbean Financial Action Task Force in 2018, Government is treading carefully into the cryptocurrency space. Areas the new rules will focus on include the intersection of cryptocurrency and fiat, or conventional currencies, the prevention of fraud and market manipulation, and integrity of owners, as well as clear descriptions of the risks for prospective investors, plus enforcement powers for the BMA. The BMA would be taking on extra staff to deal with its new crypto-business responsibilities. The scheme would provide the “highest levels of gate keeping” for crypto-business in Bermuda, speed up customer verification for banks and financial services and enable fast-track immigration.
As published in a mid-January edition of Bermuda's The Royal Gazette daily newspaper.
These are upfront fees, paid irrespective of whether companies are successes or failures, with no refunds applicable in the event of liquidations and with no tax rebates of any kind. They are in addition to other tax obligations applicable to employers.
This is not a substitute, merely a summary, with their responsibility entirely to comply with the right procedure, for companies under The Companies Act 1981; Companies Amendment (No. 2) Act 1990; The Companies Act 1981 (Fifth Schedule) Amendment Order 1994; The Banks and Deposit Companies (Fees) Act 1975; Insurance Act 1978; Non-Resident Insurance Undertaking Act; Exempted Partnerships Act 1992; Overseas Partnerships Act 1995; Trust Companies Act 1981; and Segregated Accounts Companies Act 2000 and its Amendment Act 2002.
Companies should check to see what fees apply from April 1 annually - the start of the new accounting year for the Bermuda Government. Every company should use its registration number on all correspondence with the Bermuda Government and when making any purchases. Every company must notify the Registrar of Companies, at the Government Administration Building, 30 Parliament Street, Hamilton HM 12, Bermuda, of its registered office, which cannot be a post office box, on Form 13.
(i) All cheques (checks) for fees are payable to the Accountant General but are given or sent or delivered, with Returns, to the Registrar of Companies, Government Administration Building, 30 Parliament Street, Hamilton HM 12.
(ii) All US$ cheques (checks) will be accepted at par with the Bermuda Dollar from companies denominated as Non-Resident under the Exchange Control Act.
(iii). Every company must notify the Registrar of the whereabouts and situation of its registered office (which shall not be a post office box) on Form 13.
(iv) Every company should use its registration number.
Warwick Long Bay
In other words, not locally owned or majority locally owned. Every company shall, in the month of January, forward to the Registrar of Companies a declaration signed on behalf of the company as to the company's principal business and its assessable capital, together with the appropriate fee payable. Fees submitted after the due date carry a penalty.
Where the assessable capital of the exempted company is as follows, specific fees apply:
(vii) $500,000,000 or more
Assessable capital shall be calculated in accordance with the provisions of the Companies Amendment (No. 2) Act.
And has submitted to the Registrar a certified copy of the document which evidences such designation, specific fees apply:
(i) Small FSC which does not lease aircraft
(ii) Regular FSC which does not lease aircraft
(iii) FSC small or regular which leases aircraft
Specific fees apply:
2 (i) Where the principal business of the permit company is finance business or insurance business, or in the case of a permit company which is open ended, mutual fund business.
In any other case.
Excludes banks & deposit companies, treated separately.
They are those which are at least 60 percent locally owned and trade locally with Bermudians and other residents.
Every local company must in the month of March forward to the Minister of Finance a Return of Shareholdings in the company as at December 31, on Form 14, signed by two directors.
Every local company shall not later than March 31 submit to the Registrar of Companies the appropriate fee, with the Annual Return and fee and a filing fee of $34 for the Return. Late fees and Returns carry a penalty of $150.
Specific fees apply where the issued capital is:
Less than $50,000
50,000 or more but less than $250,000
$250,000 or more but less than $500,000
$500,000 or more but less than $1 million
$1 million or more but less than $5 million
$5 million or more but less than $ 10 million
$ 10 million or more
When the company engages in or is carrying on in Bermuda or trading in petroleum or and other oils or liquefied petroleum gas, specific fees apply:
When the company's business includes the management of any unit trust scheme, in respect of each unit trust scheme managed by the company at the date of the declarations.
Plus any other applicable fees.
Under the Limited Partnerships Act 1883 (as amended) and Exempted Partnerships Act 1992 (as amended). A notice is published in the Official Gazette by the attorney for the applicant when an exempted limited partnership is formed. It shows by whom and gives its name.
An exempted partnership shall, on or before 31st January each year send to the Registrar of Companies a declaration in writing signed by a partner or an authorized person on behalf of the partnership stating the general nature of the business transacted by the exempted partnership, together with the annual fee.
Every partner shall be liable to a penalty per day if the partnership fails to pay the annual fee on time and fails to file a declaration.
Every overseas partnership shall no later than 31st January submit its fee to the Registrar. Fees submitted after the due date carry an additional sum and a default fine.
Every Non-Resident Insurance Undertaking shall no later than 31st March submit its fee to the Registrar. Fees submitted after the due date carry an additional sum and a penalty.
The Customs Tariff Amendment Act applies. It is a 540-page list of special codes for every imaginable type of imported product and it provides for Customs Officers the rate of Customs or import duty on the item. The revised code consists of up to seven digits in heading and tariff code fields and a detailed description of the item to be imported or exported. It also includes the unit to be used for calculating the duty, whether the value of the item or its quantity or weight. Some items, like alcohol, are calculated by the liter. Some other items, like cigarettes, are calculated by the cigarette.
Insurance companies registered in accordance with the provisions of The Insurance Act 1978 shall forward the appropriate annual business fee applicable to each category on or before March 31.
(a) (i) Non-resident Insurance Undertaking
(ii) Class 1 Insurer carrying on general business
(iii) Class 2 Insurer carrying on general business
(iv) Class 3 Insurer carrying on general business
(v) Class 4 Insurer carrying on general business
(vi) Long Term Insurer
(vii) Class 1 Insurer carrying on general business and long-term business
(viii) Class 2 Insurer carrying on general business and long-term business
(ix) Class 3 Insurer carrying on general business and long-term business
(x) Class 4 Insurer carrying on general business and long-term business
(b) An insurance manager under Section 10 of the Insurance Act
(c) An insurance broker under Section 10 of the Insurance Act
(d) An insurance agent under Section 10 of the Insurance Act
(e) An insurance salesman under Section 10 of the Insurance Act
Investment Business Act 1998 applies. Local Investment Companies must be granted a license to carry on investment business in Bermuda within the meaning of section 2 of the Act, before they can sell their services. Licenses carry specific fees:
Applying for a license under section 6
Annual fee for grant of license under section 10(1)
Meaning companies licensed in accordance with the provisions of the Companies Act 1981 and the relevant Banks and Deposit Companies Act 1999. All shall forward license fees to the Registrar of Companies no later than 31st January.
Application for a banking license
Where the bank has consolidated gross assets (in all currencies) of less than $200 million in value
Where the bank has consolidated assets (in all currencies) of $200 million or more in value
Application for a deposit company license
Every Trust Company licensed in accordance with the provisions of the Trust Companies Act 1991 shall no later than March 31 in every year following the year in which it was licensed, pay a specific amount.
Regulates all trust companies. Came into force on 25 January 2002, replacing the Trust Companies Act 1991.Licensing is a requirement.
To register a medical practitioner in Bermuda under section 7, specific fees apply:
Issuing an authorization to a visiting practitioner under section 21
For a locum tenens under section 22
In addition to the annual fee or tax otherwise payable, these companies pay an annual fee in respect of each segregated account operated by the company, subject to a maximum fee in the aggregate. A segregated account company is one with separate cells or accounts created where assets and liabilities in each cell or account are completely ring-fenced. For example, for a split rights deal in a recording or theatrical company, one cell has sound recording receipts and the other has theatrical and merchandising receipts.
Last Updated: July
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