Premier: 60/40 Ownership Rule To Be Revised

February 16, 2018 | 29 Comments

“We will increase access to capital for Bermudians by reforming the 60/40 rule to one that only requires 40% Bermudian ownership in order to operate in the domestic economy,” Premier and Minister of Finance David Burt said in today’s 2018/19 Budget.

The 60/40 rule generally requires local companies to be at least 60% Bermudian owned, so this revision will see that ‘swap’, with the requirement to change to 40% Bermudian ownership.

60 40 - 40 60 TC Bermuda Feb 16 2018

Premier’s Comments On 60/40

Premier Burt said, “The origins of the 60/40 rule bear witness to the history of Bermuda and the systemic inequalities to which I referred earlier. The rule is the ultimate in protectionism, which runs counter to the claim of Bermudian entrepreneurship.

“If wealth is concentrated in a few hands, and those hands will never invest in anything that competes with their vested interests, a true entrepreneur is confronted with a policy that essentially tells him or her: “We’ve got ours; good luck getting yours.”

“In 2018, this vestige of our oligarchic past must be ended. We need more economic activity in Bermuda, and that means we must welcome investment from nontraditional quarters and not shy away from the competition it may create. In the truly competitive marketplace, the consumer will always be the winner, as all Bermudians want and seek lower prices for goods and services.

“As I indicated to the Bermuda branch of the Alternative Investment Management Association, Mr. Speaker, ‘You can own 100% of a $50,000 business or 40% of a million-dollar business – clearly, most people would prefer the latter.

“For too long, the majority of Bermudians have been spectators of the creation of wealth in this country. This Government is determined to create the conditions and opportunities that usher the “left-behind” from the stands and sidelines to the playing field.

“Bermudian entrepreneurs should not have to rely on their inheritance or banks that often refuse to lend to fund their ambitions. We will increase access to capital for Bermudians by reforming the 60/40 rule to one that only requires 40% Bermudian ownership in order to operate in the domestic economy.

“I recognise that this proposal will face opposition from both sides of the political spectrum. There will be those who want to protect their existing interests, and there will be those who feel that allowing entrepreneurs access to foreign capital enabling them to compete is not consistent with putting Bermudians first.

“However, I want to assure the people of Bermuda that the Government will consult and strike the right balance to ensure that the revision of this rule has the intended consequence of providing more opportunities for Bermudians to become wealth-generating owners and not just employees.”

The Premier had discussed this matter during his Pre-Budget Town Hall.

Part Of Plan For Economic Growth

The policy is part of the Government’s overall stated plan to focus on economic growth, with the Premier saying today, “As a country with a stagnant economy and an ageing population, we cannot afford to stand still while other countries modernise to compete in the new global economy.”

“While many countries actively seek investment to provide opportunities for their citizens, in Bermuda we seem to be comfortable sending potential investment elsewhere.”

“We must adapt,” Premier Burt said, or “as a country we will continue to fall further and further behind, finding ourselves unable to afford to take care of our seniors, educate our students, fund public services, or pay our pensioners.

“We must grow, and the only path to growth is via increased investment in the Bermuda economy.”

The Experts View On 60/40

The 60/40 rule was discussed in Bernews Pre-Budget Panel held earlier this week with Bermuda College Economics Senior Lecturer Craig Simmons, Chamber of Commerce President John Wight, and former Business Bermuda CEO Cheryl Packwood.

“In order for the economy to grow, you need more people,” Craig Simmons said, “The chicken and egg is that you do, in order for the economy to grow, you need more people.

“Getting people in from the outside, hopefully attracting more Bermudians back home, and then finding other ways for people to come here and invest in our economy – so now we’ve moved into the 60/40.

“Is the 60/40, has its day passed?” asked Mr Simmons. “What was the original intention of 60/40 and what is the role of it today? It’s my understanding that it was a way for the oligarchy to protect its interest.”

“But if you’re going to abolish 60/40, you’ve also got to look at, what are some of the downsides? This economist at the JFK School at Harvard, Danny Roderick, talks about how globalization, as you become more deeply embedded in the global economy, that that sort of exacerbates social cleavages.

“So I can’t help but wonder, so if we abolish the 60/40 rule, that means capital coming in to Bermuda, people that we’ve never seen before starting up businesses, what are some of the unintended consequences of having people that are obviously foreign running businesses on Front Street, on Reid Street, the political shifts that accompany that, and the inequality that may follow? We’ve got to get used to the change.”

Speaking during the panel discussion earlier this week, Ms. Packwood said, “We’ve had a massive flight of capital due to the 60/40 rule, because it is impossible for foreign businesses to reinvest whatever they’ve made back into the country, unless you’ve had special legislation passed, special bill passed, that allows you to keep your profits, reinvest…”

“All of that money, even the exempt companies, the insurance companies, it’s going all back offshore,” she added.

“It had a place in the 1960s,” Ms Packwood said. “In 2018, it doesn’t have a place anymore in a global economy, all it is doing is stifling our economy.”

On the 60/40, Mr. Wight said, ”I absolutely am in favour of the discussion initially being had, like what are the risks, what are the opportunities, but my view is that in 2018, it has to be done away with in a measured basis.

“I just don’t think that we have the luxury of being able to say that we want to protect local businesses the way that we could have before the recession hit.

“So I think it did, for better or worse, it protected local business for a long, long time, but in 2018, I really think we have to have a serious discussion about doing away with it and encouraging foreign capital to come to the island.”

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Comments (29)

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  1. Onion says:

    If the OBA had done this the Unions would have been protesting with the PLP and accusing the government of selling Bermudians’ birth right.

    • sugra says:

      No question.

      Yet Mr Burt acknowledges in the same breath that it will “face opposition from both sides of the political spectrum”, which really translates into “opposition from within”. For this to reach potential means challenging the entrenched nationalist, protectionist and outright xenophobic perceptions that his party has long promoted and exploited within its support base. Right there between the lines is a call for a paradigm shift in position on immigration and residency policy; reversing, or at least calming, public opinion on an emotional issue stoked furiously for political gain in recent years. There are currently serving Cabinet members whose opinions of public record don’t reconcile with this whatsoever. The Premier and Finance Minister will have his work cut out for him to make this work.

      Provided that any opportunities are afforded to ALL Bermudians on a level playing field, I applaud Mr. Burt for a bold move and hope it results in much needed economic stimulus.

  2. rene says:

    Speaking of protectionism and not sure if this was discussed but why can’t used cars be imported. If they are safe to drive and meet the legal requirements as to dimensions etc. why not. The policy pertaining to just private cars is clearly protectionist as trucks, intermediate vehicles are imported on a regular basis. Removing this barrier would go far in reducing Bermuda’s cost of living.

    As well eliminating the restriction on motorcycle cc’s would lower the cost of motorcycles. Most people I think, want value for money those who can afford more expensive bikes will buy them via direct importation themselves or dealers will bring them in at a competitive price. Hence motorcycle prices will decrease. As for those who protest cc’s kill people “no” irresponsible riding kills. Slamming into a wall at 30mph can kill you just as fast as 50mph.

    • Question says:

      All gas powered vehicles should be banned and we should go 100% electric. No reason not to.

      • Onion says:

        Electric don’t have the range yet.

        Also, because Bermuda’s electricity is generated by burning oil a lot of modern cars are just as efficient as electric in terms of air pollution.

    • sage says:

      True, you also can not import used motorcycles, only 50cc I’m told, funny how we allow Hummer, Cadillac Escalade, twin turbo V8 BMW’s, Jeep Wrangler, even a Maybach. Also the police need 1300cc motorcycles and tourists with no experience on our roads can bring their massive Harleys on the ship ranging from 883cc to over 2000cc and safely navigate the roads. Why then are motorcycles limited to 15hp 150cc learner bikes for adults? How can you have graduated licensing scheme to end up on learner bikes for life? Oh yeah, TCD has issued one day permits to people who own Harleys (and quads) locally, to ride on the roads. Either way we need comprehensive rider (and driver) education.

      • PANGAEA says:

        I was hoping to see some reform like getting rid of, or amending some of the archaic laws .

        By the way,BIG motorcycles overheat at low speed I guess tht applies to big trucks and busses also.
        Now you know why the police motorcycles have to drive quite fast on occasion.

  3. Finally. Thank you!!! says:

    This restrictive policy has outlived its usefulness.

    Good riddance.

    Well done Mr Premier.

    • Question says:

      As usual, folks with agendas (particularly tied to money) don’t allow reasonable assessment of policy.

      Any major policy change such as this should clearly provide transparency around the pros and cons of this change (qualitative, quantitative – business and social).

      I would expect at minimum that ALL potential impacts to be discussed publicly before such a major change is made. Particularly (and not all):

      - how does this really help Bermuda?
      - how does this really help the average Bermudian?
      - how will this impact the ability of Bermudians to be able to progress to top jobs and/or own their own business?
      - how will this impact on the ability to control our economy?
      - what are the job growth prospects? Is their potential for job leakage – move costs to lower cost centers?

      A great point in case is I don’t see banks (particularly those sold to foreign entities) always acting in the best interest of Bermuda Inc.? Bank of Bermuda used to hire 1000′s of Bermudians, how many do they hire now? How many jobs have been lost to drive better profitability? They don’t appear to want to service ALL Bermuda retail customers?

      Let’s be adults and lay all facts on the table so we can make an informed assessment (not just someone’s opinion). It’s just not good enough to say 60/40 has lived its time, particularly in light of the nationalist movement we’re seeing worldwide! If globalization is very disruptive for major countries, to not foresee or discuss its impacts on a country this small is malpractice!

      Everybody has an opinion, but I’d like to see the facts so folks can draw their own opinions…


      • Real Deal says:

        I agree with you this can be very dangerous. we need to make sure we have things in place to watch ,track and turn off the tap if things get out of hand.

  4. Oh really says:

    Mercy me PLP said we were selling out Bermuda to Aecon on the airport deal. Well what the heck is this. Get ready OBA supporters we need to block the House of Parliament.

  5. Curious says:

    SAY WHAT NOW!?! What happened to “Bermuda for Bermudians”, “Bermudians First” and “Standing strong for Bermudians”….?!?!?!?!??????!!!!!!!

  6. Baha says:

    Haha, crickets from the PLP supporters. They would have literally gotten themselves pepper sprayed had the OBA done this. U all are a bunch of haters

    • Anbu says:

      They dont even understand whats going on here thats why all you hear is crickets lmao. Waaaayyyyy above their heads lol.

  7. Zevon says:

    How is this helping Bermudians. This anti-Bermudian government should resign.

  8. San Patrick says:

    Careful what you wish for. The 60/40 rule has created structural problems that cannot easily be overcome simply by removing it. This move will not be easily put back into the horse – simply look at Brexit. The 60/40 rule has allowed some people to create wealth that will never be up for challenge. We had a path to citizenship before the OBA’s failed adventure and similarly we have laws which help to create wealth. It is not just the children that have sub-par reading capabilities – these people don’t read at all. Young people have much to learn.

  9. PANGAEA says:

    Canada has almost taken over the food industry an the major appliance industry here, they are in thick down in the Carabean Bermuda must be be next on their hit list, the summer sun is the draw card .

    Now you are going to give them 60 % .

    I do not call that progressive,that to me is 60 % control of prices and labor across the board.

    At one time i could sell my house to a non Bermudian , they thook that awat except for the rich folks who can have a real estate field day.

    Also do you all not know that” A LENDER OWNES YOU.”

    COME ON !

    Diferent strokes for different folks down at TT. !

    We seniors built this island now you want to give it away .

  10. Clarity says:

    Wealthy businesses will start new ones and further block access to entrepreneurs and small local companies will never get a foot in the door. Thus means all small businesses will have to compete with global players.

  11. Clarity says:

    You can own 100% of a $50,000 company or 5% of a million dollar company. You need $400,000 to own 40% of a million dollar company.

  12. Onion says:

    PLP politicians lining up to be the 40% partner.

    Friends and Family returns.

  13. Jus' Askin' says:


    Not Wise At All!!!!

  14. Jono says:

    Unrelated to 60/40….Re licensed taxi operators having fixed tax of $1000.00 pa…..There are many, many licensed
    Fishermen not reporting their fishing earnings…A similar fixed tax on these would generate much needed govt income…

  15. Real Deal says:

    I see what he trying to do but i hope he is going to prepare for the side affects. a Bermudian own business wont do curtain things because there name is important in a small island. but in the outside world they do all sorts of iffy thinks and when they get caught for it they will just change there name and re-brand and. if we dont prepare we could be setting ourselves up for receiving intentional damaging to our Bermudian brand

    • Rainbow Justice says:

      The Bermuda Brand was dealt a severe blow when a minority was discriminated against. Now there is a global outrage coupled with real cancellations at our resort hotels, we best hope we win the fight for Equality & Justice or Bermuda will pay a big price. (it already is)

      Just as Bermuda posted the best tourism results in years, if not decades, the government shoots equality and Bermuda in the foot by legislating away a right granted to same sex couples via the Supreme Court of Bermuda on May 5th 2017.

      We were on the cusp of being a tolerant and just society. Indeed even Walton Brown Jnr said said last year:
      “My honourable friend said that if we allow same sex unions or gay marriage it will have far reaching implications…yes, it will…it would lead to a more just society,” Opposition MP Walton Brown said in the House of Assembly.

      For the sake of justice and equality and indeed Bermuda’s reputation and Bermuda Tourism, I hope the pending legal challenge will be successful.
      We are launching a crowd funding appeal in our legal fight for this important human rights issue.

  16. jty says:

    This is a very risky strategy. Where we need foreign investment (communications, hotels, etc) we have waived the 60/40 rule. Being able to evaluate foreign competition on a case by case basis is sensible.

    Lastly, Burt speaks of helping Bermudian “entrepreneurs” but an entrepreneur who doesn’t have control of his business is a minority investor. In fact, he is supporting foreign entrepreneurs.

    • Onion says:

      The beneficiaries of this will be wealthy business owners who will get a better valuation from a foreign buyer.

  17. PANGAEA says:


  18. Rainbow Justice says:

    OPEN FOR EQUALITY – ??????????
    We applaud the Premier of Bermuda to open the economy – “A bold step to drag Bermuda into the modern world”.

    BUT the Premier just dragged Bermuda into the dark days of discrimination with the reversal of Same Sex Marriage.
    This has hurt Bermuda globally. When you take away equality don’t expect everyone to come rushing to our shores.
    The Premier should have been BOLD an accepted the ruling of May 5th 2017 of Charles-Etta Simmons – that would have been the right and just thing to do. There was nothing BOLD at all about trampling on the rights of a minority.
    Now Bermuda faces world wide fallout coupled with a legal battle to boot.
    Wish you were BOLD Mr. Premier with Marriage Equality.

    Sadly, the negative feedback in the global press and social media has meant that hotels have lost business. One hotel just lost a $ 2 million dollar group booking. That is just one booking. There are many others. Then there is the cruise ship issue….

    Just as Bermuda had posted its best tourism numbers in years, the PLP trampled on the rights of a minority by reversing same sex marriage and giving them 2nd class domestic partnerships. Indeed they reversed those rights with legislation – how cynical and repugnant.
    The cost in loss of reputation, tourism visitors and Equality and Justice for the #LGBTQ community is huge.
    It didn’t need to be.
    The Premier Burt has been called BOLD for his Budget and reversing the 60/40 rule, sadly he is the opposite of that in his governments treatment of the LGBT community.

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