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Bermuda |
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Bermuda Key Corporate Features
Bermuda consists of a group of over 100 small coral islands in the North Atlantic Ocean, and is not, as often believed, part of the Caribbean. The population of Bermuda is approximately 60.000, made up primarily of people of European and African origin. Bermuda is a dependent territory of the United Kingdom, with Queen Elizabeth II as Chief of State, who is represented by a Governor appointed by the British Government. Bermuda enjoys one of the highest per capital incomes in the world. This is due to it having successfully exploited its location by providing luxury tourist facilities and financial services. The official and spoken language is English. The local currency is the Bermuda Dollar which is on par with the US - Dollar. There is an exchange Control, but Exempt Companies are classified as being non resident and are therefore exempted from Exchange Control provisions. However, an Exempt Company cannot use local currency, other than for the purposes of paying local expenses. The type of law is Common Law based on the English system, the principal corporate legalisation is The Companies Act 1981. The type of company for international trade and investment is the Exempt Company. All other companies incorporated in Bermuda must be at least 60% owned by Bermuda residents. The formation procedure of a Bermuda Company is complex. Initially an advertisement has to be placed in a local newspaper announcing the intention to incorporate. The name of the proposed company, together with the objects clauses, has to be disclosed in the advertisement, confirming also whether the company requires to be exempt or domestic. An application for consent to incorporate is made to the Bermuda Monetary Authority; this application should contain the following information:
A Bermuda Exempt Company may not trade within Bermuda, and may not own real estate there. A Bermuda Exempt Company may not undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes, the rendering of investment advice or any other activity, which may suggest an association with the banking and insurance industries. All of the aforementioned activities are prohibited unless licensed. A company incorporated in Bermuda has all the powers of a natural person. The language of legislation and corporate documents is English. A registered office must be maintained in Bermuda. The statutory books of the company must be kept at the registered office, and should be available for public inspection. There are no shelf companies available. The time to incorporate is about two to three weeks. There are the following name restrictions: names that are identical to or similar enough to create confusion with existing companies, or names that imply royal or government patronage. Names that in the opinion of the Registrar are considered undesirable, offensive or obscene. The name can be in any language using the Latin alphabet. If a non English language name is used, the Registrar may request a certified English translation to satisfy him that the name is not restricted. The following names Require consent or a valid licence: Bank, building society, savings, loans, trust, insurance, assurance, reinsurance, fund management, investment fund, fiduciary, broker or their foreign language equivalents. The suffixes to denote a limited liability company are: Limited or Ltd. Disclosure of beneficial ownership to authorities is necessary, but very strict secrecy laws prevents the information from becoming public knowledge. The standard authorised share capital of a Bermuda exempt company is US$ 12.000; divided in to 12.000 common voting shares of US$ 1, which is the maximum capital for the minimum capital duty payable on incorporation and annually thereafter. The minimum issued capital is US$ 1. The following classes of shares are permitted: Registered shares, preference shares, redeemable shares and shares with or without voting rights. Bearer shares are not permitted. Bermuda currently has no corporate or income tax. Exempt Bermuda companies receive a certification of tax exemption and a Government assurance under the Exempt Undertakings Tax Protection Act 1966, confirming that in the event of Bermuda introducing a taxation system, exempt companies will be further exempted up to 2016. Bermuda is not a party to any double tax agreement. A company with an authorised capital up to US$ 12.000 pays a license fee of US$ 1.780 per annum. Thereafter there is a sliding scale up to a maximum of US$ 27.825 on an authorised capital more than US$ 500 million. Although there is no statutory requirement to file accounts, there should be sufficient accounting records to enable the directors and shareholders to ascertain the financial position of the company. The accounting records should be kept at the registered office address. If they are kept outside Bermuda, copies of all accounting records should be available for inspection by the directors each quarter. All Bermuda companies should appoint an auditor, except where the directors and shareholders have unanimously agreed not to appoint one. The minimum number of directors is two, who must be natural persons. There must always be sufficient Bermuda resident directors to form a quorum in Bermuda. Non-Bermuda directors may be appointed. The directors must appoint a president and vice-president as officers, who need not necessarily be directors. A Bermuda company must appoint a resident company secretary, who must be a natural person. The minimum number of shareholders is one, who can be a corporation or natural person of any nationality.
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