Appleby: “Bermuda Bucked A Global Trend”
Bermuda “bucked a global trend” for offshore incorporation activity during the second half of 2012, according to Appleby, one of the world’s largest providers of offshore legal, fiduciary and administration services.
A statement from Appleby said, “Despite new incorporation activity in major offshore jurisdictions generally being down in the second half of 2012, the Bermuda register reported a 7% increase in the number of new company incorporations compared to the first six months of the year, reveals Appleby’s latest ‘On the Register’ report, which provides insight and data on company incorporations in offshore financial centres.
“Continued tough economic conditions have impacted levels of new company registration activity offshore globally. However, the Bermuda data reveal that the jurisdiction continues to steadily edge back to the levels last seen in 2008. Looking at the whole of 2012, Bermuda’s activity dropped off slightly [by 2%].
“The ongoing weakened economic conditions continued to impact the overall market in the second half of 2012. There were 37,881 new offshore company formations in the jurisdictions covered by the report, a decrease of 3.6% from the same period a year earlier, and a deeper decrease of 11% on the preceding six months in 2012.”
“The year was certainly buoyed by activity in the second six months of the year,” said Rory Gorman [pictured], Managing Director of Appleby Services [Bermuda] Ltd. “There are signs that 2013 will be a watershed year in terms of seeing a universal return to pre-2009 activity levels across the offshore jurisdictions,” said Mr. Gorman.
Minimal Growth in 2012
Taking the entire year into account, overall growth in new company incorporations for the majority of jurisdictions stayed flat in 2012, which proved to be a year of consolidation following large increases in annual new incorporations between 2009 and 2011.
“Continued uncertainty in some markets and the shift in focus from China/Asia to Africa for jurisdictions like Mauritius and the Seychelles are preventing a speedy return to the numbers of company formations recorded prior to the global economic crisis,” Mr. Gorman said. “Add to this several major international events during the second half of 2012 including the US Presidential election, continued economic uncertainty in the Eurozone and the once-in-a-decade change in leadership in China, and it’s hard to be surprised at the company registrations barometer struggling to quickly improve,” he said, “but we are seeing growth in some markets.”
The story is similar for the total number of active companies, with most jurisdictions showing little movement from the previous year. Hong Kong, as a comparator, saw a 9% increase in the total number of active registered companies, with the local register there breaking through the one million mark for the first time. The Mauritius and Cayman registries are steadily returning to their pre-recession peaks, experiencing a 3% and 1% rise respectively.
Among the report’s key findings is that in the second half of 2012:
- Overall volumes of new offshore companies being registered were 11% lower in H2 2012 than the preceding six months. After a busy first half of the year, jurisdictions including the Isle of Man, Mauritius, Cayman and the British Virgin Islands were approximately 10% down compared to the previous six months.
- The jurisdiction that continues to dominate offshore new company registration activity by volume is the British Virgin Islands, which has consistently maintained a six-fold lead ahead of its nearest comparator, the Cayman Islands.
- Year on year, Guernsey is the only offshore jurisdiction revealing growth in new company registration activity with a 1% increase between 2011 and 2012.
- Mauritius is the offshore economy witnessing the greatest growth rate in total number of companies on its register with a 3% increase between 2011 and 2012.
- The UK and Hong Kong, as comparators, continue to show signs of recovery. Hong Kong in particular showed significant growth between H1 and H2 2012 with a 7% increase in registrations. Both Hong Kong and the UK registrations are now well above those recorded in 2009.
