Economist Intelligence Unit Bermuda Analysis
Bermuda has recorded its strongest first half for new company formations for five years, however many of the companies being formed are “investment holding companies, which contribute little to the local economy in terms of employment or government revenue,” the Economist Intelligence Unit said.
In a recent analysis, the EIU said: “Bermuda has recorded its strongest first half of the year for new company formations for five years, raising hopes that international business sentiment is responding positively to the centre-right One Bermuda Alliance (OBA) government’s investor-friendly approach to policy.
“The Ministry of Economic Development reported that 422 of the companies formed were international businesses, representing an increase of 16% from the first half of 2012. The 95 new local-company formations represented the highest January-June figure since 2010.
“The uptick in company formations reflects increasing investor confidence in the context of a US recovery, the end of uncertainty brought on by the 2012 US presidential election and a change of leadership in China.
“At domestic level, Bermuda’s competitiveness has been enhanced by the scrapping of the six-year time limit for foreign workers and the granting of tax breaks to hotel developers and companies hiring Bermudian workers. Efforts to attract international business is being aided by the formation of the Bermuda Business Development Corp.
“Efforts to stabilise the public finances through spending cuts and debt management are also acting to reassure business, as concerns over the likelihood of future tax increases abate.
“However, many of the new international companies being formed are investment holding companies, which contribute little to the local economy in terms of employment or government revenue.
“A more meaningful impact will come from the rise in local-company registrations and the increase in insurance-company registrations, supporting the island’s largest international industry.
“The Bermuda Monetary Authority (BMA, the financial services regulator) reported 34 new insurance-related registrations in the first six months of 2013, representing a 42% increase over the same year-earlier period.”
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This is a neutral outsider’s assessment of where Bermuda is today.
To sum it up, IB and its support services have shrunk and the style of doing business has changed.
Bermuda is now seen to be more ‘business friendly’ but this is unlikely to attract more of its Insurance mainstay to Bermuda because the Insurance industry has modified and streamlined its modus operandi.
Bermuda has to seek and get new business that will come to Bermuda and establish a Bermuda footprint that will create fresh, new, additional employment and employment opportunity.
In a conch shell, that’s the reality described by a faceless outsider who has no axe to grind, no party to support, and no a$$es to kiss.
Good precis. Right on the mark!
However, many of the new international companies being formed are investment holding companies, which contribute little to the local economy in terms of employment or government revenue.
Here we have the voice of the PLP telling us that they don’t want to see Bermuda turn the corner and get back on the right track.
If the OBA are successful in getting out of this nightmare that the PLP have created, they will not get back into power and that is all that is important to Chris Famous, power!
An unbiased observers question for Chris Famous. Could the OBA do anything that you would not perceive in a negative light? I agree with some of your comment, but it is unfailingly in resistance to ANYTHING done by the OBA. No one and no party is always wrong. It shows little political maturity to criticize everything the new Government does. Cry “Wolf” enough and people will cease to listen. Then when you have a good idea, you will have no audience for it. You would do yourself and the Island a service if you would more carefully pick your battles.
I think the point of a comment to a story is to add further thought to the content of the article, not just cut and paste the content that we’ve already read. Any idiot can do that.
“Bermuda’s competitiveness has been enhanced by the scrapping of the six-year time limit for foreign workers.”
Maybe you need to practice using the interweb a bit more.
Bob is saying everything is on the upturn and that we have turned the corner. Wonder how many people he has hired at his company?
While it may be the beginning of an upturn, we must bear in mind that the fall from the top of the mountain happens far more quickly than the climb to the top.
I don’t suppose the negative comments aimed at the hiring of expatriate workers and the very real possibility of a return to power by the prior government fill prospective new investors with confidence.
There are other options out there. Which option has the most long term stability and the least potential for headaches?
Mr. Famous, what this shows is that investors are beginning to get their confidence back. The new incorporations ensure that those working at law firms and corporate service providers HAVE work and that work is increasing in volume. It contributes more than you think. But you’re arguing a very interesting point that conflicts directly with your musings in the Bermuda Sun. It would appear that you would favour international companies being formed to bring more ex pats to the island to boost the economy. In your rush to try and paint this article in a bad light you have actually agreed with the OBA in that we need to have more people here that are not from our shores.
This is a balanced assessment and shows the beginning of change in international business and investor confidence. Remember that a 10% fall is much greater than a 10% rise and it will take huge effort, commitment, time and talent to turn the corner. However, the building blocks are being put in place. Let’s pull together Bermuda because no one outside our shores will do it for us.
Forget the politics – a rise in the economy will benefit everyone
Mr. Famous always writes in his articles that he is for Bermuda and Bermudians.
However, it would appear by this comments that in actuality, his intent is to actively cheer and root for the demise of any of the O.B.A’s policies to turnaround the shoddy economy that they inherited.
While Mr. Famous can support however he wants in regards to a political party, remember Sir, the people…the voting electorate voted this party into power CHOSE them….unless of course, you would much rather advocate that every voter be forced to only be allowed to vote for your party, and anyone who won’t be summarily executed.