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Bermuda's International Non-Insurance Businesses

Huge range and variety of offshore corporations based here

By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online

To refer by email to this file, please use "bermuda-online.org/intcoys" as your Subject

Introduction

Clarendon House, by the author, solely for Bermuda Online

Bermuda is the business jurisdiction for many international or exempted limited liability companies or corporations. See Bermuda's International Business industry, a profile. Bermuda is also a popular location for registering hedge funds as its legislation allows the flexibility needed by this type of fund. Most are aimed at either high net worth individual investors or institutional investors. 

Bermuda is also one of the main places for corporate inversion, the term used to describe the process whereby a company moves its headquarters -- which may be nothing more than a post office box -- to a low-tax "enclave" such as Bermuda or the Cayman Islands while leaving its operations and employees in the United States. Even though the U.S. Senate has twice passed legislation designed to prohibit the Department of Homeland Security from doing business with offshore corporations, the provision was removed both times by Republican leadership in the House of Representatives from the final legislation. 

For those planning to incorporate in Bermuda, some preliminary information will be helpful. 

• If you wish to have a client or clients in the Bermuda market place, a Bermuda local company, not an international one, will apply. It will have to be by law at least 60% beneficially Bermudian (not just someone living in Bermuda but someone who has local nationality, ie Bermudian in addition to being nominally
  British) owned and managed. 

• If you wish to form an international company (corporation) which will not have clients in the Bermuda market but will sell from Bermuda to clients beyond
  Bermuda, then an international or exempted company is possible. It does not have to have any Bermudian ownership or management.

• But in either case, if management and/or staff are not Bermudian, a Work Permit for each non-Bermudian employee will have to be applied for, at some
  cost.  See http://www.bermuda-online.org/employwp.htm.

• As Bermuda does not have a direct tax on individual non-employment-rated personal income but has one on employment, it is not possible for any Bermuda-based corporate entity to claim any Bermuda tax deductibles on any Bermuda or foreign expenses incurred in setting up or running the Bermuda entity.

• In Bermuda all applications for incorporation for either type of corporate entity must be made through a Bermudian law firm -  attorney's office -  in
  Bermuda.  There are quite a few bigger and smaller law firms from which to select.  They all have websites and a variety of information for new and existing clients.

• Bermuda costs of staffing are appreciably  more than in the USA. Cost-of-living is about 380% more than in the USA overall. Economies of scale are not possible in a tiny 21 square mile but hugely affluent island - the wealthiest and most affluent per capita in the world according to the World Bank - with 3,470 people per square mile. 

Barack Obama has vowed to punish Bermuda if elected US President in November, 2008. He is vigorously promoting the Stop Tax Haven Abuse Act, which specifically mentions Bermuda.

There is a huge amount of money from overseas invested in Bermuda. According to an International Monetary Fund report on the Island, there were about 1,667 registered mutual (investment) funds in Bermuda, as of September 30, 2007. These comprised some 2,161 investment portfolios with net asset values totaling in excess of $310 billion. Government is making big efforts to tighten its anti-money laundering measures to comply with recommendations made by the IMF. In February 2008  the Bermuda Government tabled in Parliament the Bermuda Monetary Authority Amendment Act 2008 bill, which will aim to, among other things, enlarge the scope of the BMA's powers of assistance to foreign regulatory authorities.

Bermuda has a staggering total of just under $110 billion invested in just hedge funds according to the latest issue of Tax Notes. The article revealed that investors have put in a total of $262.8 billion in Caribbean region hedge funds, which include those domiciled in Bermuda. The article forms part of the Tax Analysts Offshore Project, which works out the assets that non-resident individuals are investing in financial sectors around the world, and, potentially avoiding taxes in their home country.  It states that more than half of the world's hedge funds are legally domiciled offshore, and the four offshore leaders are the Cayman Islands, the British Virgin Islands, the Bahamas and Bermuda. Estimates for the year ended 2006 showed that Bermuda then had $107 billion in hedge fund assets under management, representing 7.7 percent of the world total and 11 percent globally not including the US, which itself accounts for 30.1 percent of the world total. This is a sizeable amount when compared with the world total which grew from $456.4 billion at the end of 1996 to $1.43 trillion at the end of 2006 as the total number of hedge funds expanded from 3,616 to 9,462 over the same period. It falls short of the totals invested in the Cayman Islands, Bahamas and the British Virgin Islands, which represent $470.5 billion, $212.24 billion (in September 2007) and $129.4 billion respectively. All of the 'big five' Caribbean or near jurisdictions make up 52.3 percent of the world total and 74.9 percent of the hedge funds domiciled outside the US.

Other findings, this time by the Hennessee Hedge Fund Advisory Group, estimated a different figure for hedge fund industry assets of $1.535 trillion at the end of 2006, eight percent more than that estimated by HFR. Furthermore, research by the Lipper TASS Hedge Fund Database, revealed that, according to the 2,873 funds with total assets reporting in December 2006, Bermuda has $64.3 billion in estimated assets out of a non-US total of $976.1 billion, with 116 funds, making up 6.4 percent of that total of 1,818 funds domiciled outside the US, and $27 billion in assets, representing 6.6 percent of the non-US figure of $409.9 billion assets for the end of 2006.

Please note that the Bermuda-registered investment and related vehicles and services shown below by name or generally have not been registered or licensed under any United States securities legislation and are not being offered, directly or indirectly, in the United States or in any of its territories or possessions or areas subject to its jurisdiction or to its citizens or persons thereof. "United States" is herein defined meaning the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction including the Commonwealth of Puerto Rico and "U.S. person" means any national, citizen or resident of the United States, a corporation, partnership or other entity created or organized in and under the laws of the United States or any political subdivision thereof, and any estate or trust which is subject to United States federal income taxation regardless of the source of its income.

Entrepreneurs hoping to set up a Bermuda-registered exempted or international company - one that may not trade or offer any of their services in Bermuda with Bermudians, only with other international or exempted companies - use Bermuda as a base for their international operations. But before doing so, they have to give the Bermuda Monetary Authority detailed questions about their identities and business. They mist list all ultimate, direct and intermediate owners of their proposed company and every individual intending to own at least 5 percent of a company must complete a Personal Declaration (PD) form with their full name, spouse's name, residential address, country of citizenship, passport number and date of issue, date of birth, place of birth, occupation and present employer. They are also  asked about their interests in other Bermuda companies, any involvement here or abroad in any bankruptcy proceedings, any criminal offences here or abroad involving fraud or dishonesty. In Bermuda and in any other location where they may be represented as well, their service providers - accountants, lawyers, management consultants, Internet Service Providers, their directors, managements and company secretaries - must also be covered by the "know your client" rule. If they don't get honest answers, they must refuse to act for questionable clients.

In Bermuda, directors owe their fiduciary duty to the company rather than to its shareholders. Shareholders are not required to vote to approve certain fundamental changes, such as a sale of substantially all of the assets of the company. Bermuda law lacks restrictions on corporate dealings with interested directors of the corporation and severely limits the availability of class actions and derivative lawsuits

Some US-based multinational corporations have found that the effective tax rate on income earned from foreign sources can be reduced if they are incorporated in countries that either do not tax corporate income at all or tax the income at a lower rate than the US corporate tax rate. Consequently, some US-based companies incorporate from the outset in so-called 'tax haven' countries. In addition, some companies that were incorporated in the United States have reincorporated in tax haven countries through "corporate inversion transactions". The US Department of the Treasury states "inversion" describes a broad category of transactions through which a US-based multinational company restructures its corporate group so that after the transaction the ultimate parent of the corporate group is a foreign corporation. There are thousands of them in Bermuda. In the USA, the Multistate Tax Commission, an organization of state governments, says that states are losing billions because of corporate tax inversions in Bermuda and other tax shelters.

• All entities named below are Bermuda-incorporated limited liability companies (corporations) or partnerships.

• No UK or USA or Canadian, etc laws apply in Bermuda to Bermuda-registered companies. If you wish to research any particular company, ask the Registrar of Companies or the Bermuda Monetary Authority, both of the Bermuda Government, under whose jurisdiction they fall, if and how they can help. Please do NOT ask this author.
• Some leading Bermuda-registered American-owned international companies with an active corporate presence do not mention on their websites that they have a Bermuda office. 
• They come mostly - but not solely - from the USA. There has been much publicity and criticism from the USA about this, especially from unions and Democrats. But "the USA is at fault, not Bermuda" said David D. Aufhauser, General Council for the US Treasury Department, when he visited Bermuda in July 2002. He stated that incentives to relocate to Bermuda under corporate inversions arise out of the USA's own tax code. Amending it would be the best way to remove such unintended incentives.
• US companies suing or being sued for Human Rights cases will not have their cases heard under Bermuda Human Rights laws. One reason is because, as a US judge ruled in Los Angeles in August 2003 in a Unocal case, a non-Bermudian corporation cannot conduct business in Bermuda even though it is based here.
• Unlike in the USA from where the vast majority of companies come for corporate inversions in Bermuda, there is no legal requirement in Bermuda for their CEOs to personally certify their company's financial results if of the requisite size, but some of the better ones may be doing so on a voluntary basis.
• Bermuda-based but USA-owned or USA-operated companies can sue or be sued in the USA following a US Supreme Court ruling. Also, from 2003, if relocating to Bermuda from the USA or owned by US investors, they may soon have to tell shareholders they may face capital gains taxes in the USA. Bermuda-based companies owned by USA shareholders may be more impacted by the Sarbanes Oxley Act than other jurisdictions. 
• The shares being offered by Bermuda-based corporations have not been approved or recommended by the United States Securities and Exchange Commission (the "SEC") or any governmental authority and may not be directly or indirectly offered or sold in the United States or to any United States person, except pursuant to an exemption from or in a transaction not subject to, the registration requirements under that legislation.
• Some Bermuda-registered companies are deliberately not listed in the local telephone directory or any other listings.

Applicable Bermuda laws

• Banks and Deposit Companies Act 1999
• Bermuda Commodities Exchange Act 1996
• Bermuda Commodities Exchange Clearing House Act 1996
• Bermuda Monetary Authority (Collective Investment Scheme Classification) Regulations 1998
• Bermuda Monetary Authority (Financial Institutions) (Control) Regulations 1994
• Bermuda Monetary Authority Act 1969
• Bermuda Stock Exchange Company Act 1992
• BIU Members Credit Union Co Op Society Act 1983
• Commission on Racial Equality (CURE). See Bermuda Government Boards. 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 Act 1981
• Credit Unions Act 1982
• Electronic Transactions Act 1999
• Exchange Control Act 1972
• Exchange Control Regulations 1973
• Exempted Partnerships Act 1992
• Insurance Act 1978
• Interest and Credit Charges (Regulation) Act 1975
• Investment Business Act 1998
• Investment Business Regulations 1999
• Limited Partnership Act 1883
• Proceeds of Crime Act 1997
• Proceeds of Crime (Money Laundering) Regulations 1998
• Trusts (Regulation of Trust Business) Act 2001

Part 1

All Bermuda-registered or Bermuda-based or both, or permit companies. Their areas of business activity are hugely diversified. They include the companies mentioned below. For phone numbers, dial area code 441 first. The author cannot provide any private information or e-mail address on any company, corporation or individual either shown here or not. Please consult the Bermuda Government's Registrar of Companies directly to find out more about a particular company.

Part 2

Bacardi International	World headquarters. Pitt's Bay Road, Pembroke. P. O. Box HM 720, Hamilton HM CX. Phone 298-1060. Fax 296-2468. World's largest rum maker. Founded in Cuba in 1862 by Don Facundo Bacardi y Maso. It prospered for years with its secret rum recipe. After the Spanish-American War of 1898, Bacardi gave the world the Cuba Libre and the Daiquiri. But Fidel Castro took control in 1959 and nationalized the plant and assets without compensation. The founder's descendents exiled themselves and began afresh. The Bermuda building was designed by Mies van der Rohe. Major businesses are Bacardi International Limited and Bacardi Capital Limited. Between them, they oversee the worldwide (outside USA) marketing of much of the group's international financial affairs and bulk transportation.  They also market Martini and Rossi vermouth; Asti sparkling wine - which they bought in 1993; Bombay Sapphire Gin from England, Dewars Whisky from Scotland  and New Zealand vodka and gin producer 42 Below. The private Bacardi companies do not disclose financial results. There is also a large office in Miami, Florida. In 2007, Rising demand for deluxe scotch whisky in China, Taiwan, Korea and other Asian countries prompted Bacardi to invest more than $250 million over 10 years  to expand production of its Dewar's brand in Scotland. The Bermuda-based company intends to add a new maturation warehouse and blend centre in Glasgow, which will include new bottling lines and packing equipment. Bacardi is also finalizing options to buy a 100-acre site in central Scotland for a second maturation and blending facility. The Dewar's brand of whisky includes 12-year, 15-year and 18-year maturities and therefore any increase in production has to be planned with a significant lead-up time. Dewar's is the number one selling blended scotch in the US.
Bacardi Holdings	As above, c/o Conyers Dill & Pearman
Beacon Hill Corporation	P. O. Box HM 1179, Hamilton HM EX. Arranges leases and sales of US manufactured property to be used predominantly outside USA.
Beacon Management	Penthouse Suite, 129 Front Street, Hamilton HM 12. Phone 295-9939. Fax 292-2865.
Becher & Carlson Management	Wessex House, 45 Reid Street, Hamilton HM 12. Phone 295-0519. Fax 295-0933.
Befico Ltd	Merged with Novartis Capital Ltd
Belize Orient Corporation	Sterling House, Wesley Street, Hamilton. Phone 295-5254
Beltship Management	P. O. Box HM 723, Hamilton HM CX. Part of an international shipping group specializing in ship management and self-unloading bulk carriers.
Beluga	Hamilton-based, owned by John Outerbridge. Owns the luxury yacht "Bermudiana" worth $2.8 million which in late 2007 was seized by US authorities in Florida because of a dispute over the alleged non-payment by its owners for $73,000 of service costs. The 27.36-metre Versilcraft Motor Yacht was built in 1991 and underwent a thorough mechanical & cosmetic refit in 2004, including rebuilt main engines, a new generator, fresh paint and a new decor. The spacious layout of the vessel provides four owner/guest staterooms plus accommodation for up to five crew in three cabins, and, with her low maintenance fiberglass construction, unique layout and attractive price, the Bermudiana represents a chartering opportunity for a yachtsman with a large family, lots of friends or the desire to get away with a special someone."
Berco	Pembroke Hall, 42 Crow Lane, Pembroke HM 19. Phone 295-4537. Fax 295-1232. International Investment company, part of Berco Ltd, of the Mitchell empire, owned by billionaire Bermuda resident Peter Green, long-time contributor to the UK's Labour Party.
Bergesen	Major shipping company
Berkshire Hathaway	Investments.  CEO is Warren E. Buffett
Bernhard Schulte Shipmanagement (Bermuda) LP.	Richmond House, 12 Par-la-Ville Road, Hamilton HM 08. Phone 295-0614 or fax 292-1549 or cell 505 2657. Operates chemical tankers.
Bestway International Holdings	C/o Codan Services Ltd
BI	Owned by and controlling the worldwide business interests of the British twins of David & Frederick Barclay, among Britain's 500 richest people. Their property includes the Scotsman and Daily Telegraph newspapers (the latter bought on 22nd June 2004 for £650 million - and Ritz Hotel in London.
Birketu Pty	Private investment company of Bermuda-based Australian billionaire Bruce Gordon
BISYS Hedge Fund Services	Formerly Hemisphere Management Limited. P. O. Box HM 951, Hamilton HM DX. Phone 295-9166. Fax 292-6145. One of the leading fund administration groups in the world, with assets exceeding $45 billion and third-largest administrator of hedge funds. Established in Bermuda in 1981, with 142 out of the total of more than 276 staff and subsidiaries in Dublin and Boston. A wholly-owned subsidiary of Mutual Risk Management Ltd.
Blad Foundation
BNY Alternative Investment Services. (Formerly International Fund Administration, or IFA)	Suite 464, 48 Par La Ville Road, Hamilton HM 11. Hedge fund administrator and International financial services, providing comprehensive fund administration services for offshore and US investment companies. Bank of New York acquired IFA in late 2002.
Boston Company Advisors (Bermuda)	Trenwick House, Church Street, Hamilton. Phone 295-4107.
Brazilian Renewable Energy Company (Brenco)	Since 2007. An ethanol company with prominent foreign investors. Founding shareholders included venture capitalist Vinod Khosla, American supermarket magnate Ron Burkle, America Online founder Steve Case, former World Bank President James Wolfensohn and film producer Steven Bing. Brenco sells ethanol to the huge domestic market, and exports it amid rising international demand. It is expected to produce 3.8 billion liters (1 billion gallons) annually within the next ten years. Brazilian ethanol makers produced 17 billion litres (4.5 billion gallons) last year, and exported 3.4 billion litres (900 million gallons). The company has its headquarters in Brazil’s largest city of Sao Paulo, near the sugarcane fields where most Brazilian ethanol is produced.
Bright International Group	C/o Codan Services Ltd
Brilliance China Automotive Holdings	Established in 1992 to own a 51% interest in Shenyang JinBei Passenger Vehicle Manufacturing Company Ltd., of China. It manufactures and distributes mini-buses in China. It was the first company with operations solely in China to list on the New York Stock Exchange. A subsidiary, Brilliance China Trucks Holdings Ltd., changed its name in late 1996 to China Automotive Co. Ltd.
Brunswick Russian Directional Fund
Brunswick Russian Growth Fund
Bunge	World's top soybean exporter and oilseed processor. In late 2002 it formed a venture, Solae LLC,  with Dupont Co. to make soy ingredients.

Part 3

  Part 4

Part 5

Fabian & Fabian Capital	Bermuda -headquartered international real estate investor with an interest in the Romania market.
Fairfax Financial Holdings	World ranking about 866. Based in Toronto, it is heavily into property, casualty, insurance and reinsurance. Its Bermuda-based Odyssey Re insurance subsidiary also active.
Fairfield Greenwich Group (FGG)	Founded 1983, alternative asset management fund company with about $5 billion in assets under administration. Headquartered in New York. With staffed investment advisory office in Bermuda.
Fenris Holdings NV
Fidelity International	P. O. Box HM 670, Hamilton HM CX. In Bermuda since 1969, it is the international headquarters and subsidiary of Boston's Fidelity Investments Ltd. It co-ordinates corporate finance, fund treasury, legal and compliance functions  in Europe and Asia. The chairman & CEO of the parent FMR Corporation begun in 1946 by his father, is Mr. Edward Johnson III, who owns a substantial Bermuda home. The ownership structure is similar to the US domestic operation of FMR. The Johnson family has controlling interest, with the balance owned during their employment by employees. Photo by the author.
Fiduciary Partners Trust Company	Formed 11 June 2003
FIR Capital	A Bermuda-based venture capital company that focuses its activities in Brazil. In 2007 it partnered with Draper Fisher Jurvetson, a San Francisco-based venture capital firm that backed Hotmail and Skype.
First Sign International Holdings	C/o Butterfield Fund Services (Bermuda) Ltd
Flag Telecom Holdings	It filed in US Bankruptcy Court under Chapter 11. Compared to earlier, now with only a small presence in Bermuda. Nynex is the managing sponsor, providing full communications services in the northeastern USA and elsewhere globally. Other sponsors are the Dallah Al Baraka Group of Jeddah, Saudi Arabia; Marubeni Corporation of Japan; Gulf Associates Inc. of New York; Telecom Holding Co. Ltd., a wholly-owned subsidiary of Telecom Asia, the largest market-capitalized company on the stock exchange in Thailand; and The Asian Infrastructure Fund (AIF) of Hong Kong, a $1 billion fund that invests in entities engaged in developing and operating infrastructure projects in Asia. The FLAG (Fiber-optic Link Around the Globe) cable system cost $1.7 billion and entered service in November, 1997. FLAG is the first international submarine telecommunications cable to serve China.
Flying Lion	A Bermuda-registered private jet airline. Flies UK opposition politicians world-wide. Owned by millionaire Lord Ashcroft. Registered at Cedar Avenue in Hamilton. A Falcon 900EX allows its MP passengers to travel in comfort and style, with features such as supple leathers, glistening veneers and deep pile carpet as standard, according to French maker, Dassault.
Forexter	Trades foreign currencies in a unique way.
Forum Fund Services	Offshore funds
Fortuna International Holdings	C/o Butterfield Fund Services Ltd
Fortune Telecom Holdings	C/o Codan Services Ltd
Forum Financial Group	Fund administrators, Forum Fund Services, now owned by US financial giant Citigroup.
Foster Wheeler	In the top 100 of Federal contractors, with significant US Defense and Homeland Security contracts. In November 2000 the directors of this Clinton, New Jersey-based engineering and construction service provider approved the change of its legal domicile from Clinton, New Jersey, to Bermuda and duly re-incorporated in Bermuda, for significant tax savings. Most of its revenue and income come from outside the USA. Via its subsidiaries, it has a broad range of construction, design, engineering, manufacturing, project development, management, research and environmental services. A global company offering, through its subsidiaries, a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Serves the upstream oil and gas, LNG and gas-to-liquids, refining, petrochemicals, chemicals, power, pharmaceuticals, biotechnology and healthcare industries.
Fram Shipping	Hayward Building, Hamilton. Phone 292-7495.
Franklin Holdings (Bermuda)	Bermuda holding company, global investment vehicle and member of the New York-based D. E. Shaw Group. Recently purchased the James River Group.
Frontline Shipping	P. O. Box HM 1593, Hamilton HM GX. World's largest oil tanker operator. A Bermuda-registered tanker company. It owns and operates more than 70 oil tankers and more under construction. Norwegian multi-millionaire shipping magnate John Fredriksen was chairman until he retired October 31, 2003. Winding up order put on hold.
Fruit of the Loom	American apparel and underwear corporation incorporated in Bermuda. Formerly based in Bowling Green, Kentucky. Its shareholders  voted to re-incorporate in Bermuda on March 4, 1999, for significant tax savings. Its products are sold in Bermuda. It has $ multi-million US Defense and Homeland Security contracts.
Fund Administration Services (Bermuda)	Michael Burger
Fuisz International (Bermuda)	31 Church Street, Hamilton HM 12. Phone 296-7631.
Fulcrum Group	69C Pitts Bay Road,  Pembroke HM 08. Phone 295-1355. A hedge fund administrator.

Part 6

Part 7

Part 8