Conyers: The Benefits Of Bermuda
There are many reasons why Bermuda remains one of the domiciles of choice for doing business, says Hamilton-based international law firm Conyers Dill & Pearman, with many of the principal factors overlapping.
In an overview of the island’s governmental, legal and corporate infrastructures released to potential international clients last month, Conyers said Bermuda’s advantages as an off-shore financial centre include:
Tax neutrality: There are no income, profit or capital gains taxes in Bermuda. Recent legislative amendments in Bermuda have extended until 31 March 2035 the period for which the Minister of Finance will grant an assurance to Bermuda companies that they will not be liable to pay any such taxes in the future.
This is particularly attractive to holding companies with subsidiary operations in, or significant income arising from, more than one country as it is difficult for a particular taxing authority to assert its
right to tax all of the group’s operations or profits.
The absence of withholding taxes is also attractive to a Bermuda company’s shareholders.
Legislative Framework: Bermuda’s corporate law is flexible and is largely based upon the corporate law of the United Kingdom.
The principal corporate legislation, the Companies Act 1981, is amended regularly to keep pace with international commercial developments.
Where the securities of a Bermuda company are listed on an overseas exchange, the regulatory regime in the Companies Act will often defer to
the relevant onshore regulation.
Location and infrastructure: Bermuda is 90 minutes by air from New York, and there are regular direct flights to other major US cities, Canada and the UK.
The island also has a sophisticated infrastructure and a long history of accommodating international businesses [the first international company was incorporated in the 1930s].
Approximately 75 percent of the Fortune 100 companies maintain a corporate presence in Bermuda.
Telecommunication services are very well developed, and there is a high level of professional services available including representation on the island by all of the “Big Four” international accounting firms.
Bermuda also has a stable political and social environment reflecting its status as an internally self‐governing British territory with
a tradition of parliamentary government dating from 1620.
Bermuda’s legal system is based on that of England, with a final appeal to the Privy Council of the House of Lords in London.
Light regulation: Bermuda’s government and business community have traditionally worked together to ensure that the reputation and integrity of the jurisdiction are preserved without the need for overly burdensome regulation.
This system of light, but effective regulation is generally characterised by a significant level of cooperation between the business community and the government and has complemented Bermuda’s historical emphasis on quality rather than quantity of business.
Intangibles: In addition to — and, to some extent, as a result of — these other factors, there appear to be certain “intangible” benefits of establishing in Bermuda, said Conyers.
Among other things, onshore investors seem to be more comfortable with Bermuda and its reputation for quality than other offshore jurisdictions. Similarly, organisations such as the US Securities & Exchange Commission and the major stock exchanges are now dealing with Bermuda companies on a regular basis and generally appear satisfied with the island’s legal system and regulatory environment.
Bermuda companies are listed on most major stock exchanges around the world. Investors, lenders, rating agencies and many service providers are familiar with the legal system in Bermuda and are willing to participate in such a structure with little added due diligence.
Founded in Bermuda in 1928, multi-jurisdictional law firm Conyers now has offices in 10 countries and employs 550 staff, including more than 150 lawyers.
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