Businesses To Submit ‘Type Of Activity’ Form

December 27, 2018 | 2 Comments

The Economic Substance Act 2018 is coming into effect, according to the official Government notices, which states that effective 1 January 2019, every registered entity that submits an application to the Registrar of Companies is required to provide a completed form declaring their type of activity.

The new Act requires companies that are “engaged in a relevant activity” in Bermuda to “comply with the economic substance requirements” with relevant activity deemed as carrying on business in the fields of “banking, insurance, fund management, financing, leasing, headquarters, shipping, distribution and service centre, intellectual property, and holding entity.”

Minister of Finance Curtis Dickinson previously said, “The necessity of the Economic Substance Act was to satisfy requirements from the European Union that companies registered in Bermuda must maintain a physical presence, employees and revenue generating activities.”

Minister Dickinson speaks about the Act in the House on December 17

The official notice said, “The Economic Substance Act 2018 came into effect on 21 December 2018 [“ESA”].

“Section 3[1] of the ESA requires every company, limited liability company and partnership [“Registered Entity”] that is engaged in a relevant activity to maintain a substantial economic presence in Bermuda and comply with the economic substance requirements prescribed by the ESA.

“Relevant activity means carrying on business in:

  • a. banking
  • b. insurance
  • c. fund management
  • d. financing
  • e. leasing
  • f. headquarters
  • g. shipping
  • h. distribution and service centre
  • a. intellectual property; and
  • j. holding entity

“Filing requirements

“Effective 1 January 2019, every Registered Entity that submits an application to the Registrar of Companies seeking to register is required to provide a completed Form Declaring Type of Activity [“Form”] to the Registrar of Companies. Entities will not be registered unless the Form is submitted.

“For companies, the Form is requested under the authority of the Minister of Finance pursuant to section 6[1] of the Companies Act 1981.

“For limited liability companies and partnerships, the Form is requested by the Bermuda Monetary Authority pursuant to section30[2] of the Limited Liability Company Act 2016 and section 4[2] of the Limited Partnership Act 1883 and section 7[2] of the Exempted Partnerships Act 1992 respectively. The Bermuda Monetary Authority requests that the Form be submitted directly to the Registrar of Companies. The Form can be obtained from the Registrar of Companies website on the government portal under the ‘Resources Section’ here.”

The Industry Notice about the Economic Substance filing follows below [PDF here]:

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Comments (2)

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  1. dondererd says:

    Thank you Bernews for doing government’s job of public education – Government must step up its information on this new law asap

  2. Family Man says:

    Typical Government “tick the box” form. Literally.

    And why have a section for “Registration number” if registration is dependent on the prior submission of the form?

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