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An entrepreneur must register the company in Bermuda due to the benefits provided by this destination.
Overview of Company Registration in Bermuda
Bermuda is a British Overseas Territory situated on the Bermuda archipelago in the North Atlantic Ocean and to the east of the United States. It is under the sovereignty of the UK (responsible for defence and foreign relations. The capital of Bermuda is Hamilton. Bermuda is home to over 70 000 people, while its official language is English. The national currency is the Bermudian dollar - BMD (equal to the American dollar).
Bermuda has one of the world's highest GDP per capita, with tourism and insurance sectors as its largest economic sectors.
The government of Bermuda is a parliamentary representative democratic dependency under the constitutional monarchy. The Constitution of Bermuda provides for the internal self-government of the state. At the same time, the Queen of the United Kingdom appoints the governor whose power includes defence, foreign policy, and police matters. The authority responsible for company registration and incorporation in Bermuda is the Registrar of Companies. The legislative framework is the Companies Act 1981.
Benefits of Company Registration in Bermuda
Following are the benefits of Company Registration in Bermuda:
Tax Exemption
There aren’t any there are no taxes on profits, income, or dividends paid to a Bermuda company or its shareholders. Additionally, there is no capital gains tax, estate duty, or death duty. Only shareholders who are ordinarily residents of Bermuda are subject to tax. Profits can accumulate within the company. Bermuda tax laws do not require the company to pay dividends.
Absence of Stamp Duty
There is an absence of any stamp duty for any instrument executed by an exempted company. Stamp duty is a government tax on legal documents. Such documents usually transfer real estate or other assets from one party to another. There is also no stamp duty on an instrument relating to an interest of an exempted company. However, the government may collect stamp duty concerning transactions involving property in Bermuda.
Minimalist shareholder requirement
As per the Companies Act of 1981, businesses need only 1 director and 1 shareholder for incorporation. LLCs need only 1 member and manager. In each case, this may be the same person.
Expediency
According to the Bermuda Monetary Authority, the company's incorporation can be completed as soon as the government receives the application. That is the typical timeframe if Ministerial consent is not required. For incorporation that does not require Ministerial consent, one should allow two to three working days for processing following the submission of a completed application. It must be noted that this doesn’t include shipping time. It also does not include the time it takes for you to provide the legally required due diligence (know-your-client) documents.
Major Forms of Business Entities for Company Registration in Bermudas
The business structures for company registration in Bermuda are as follows -
Limited Liability Company
This is a flexible option for doing business in Bermuda and is suitable for small and medium-sized businesses. An LLC may be formed by one or more persons who aren’t responsible for the company's operation's results except for the contributions made by them. The members of the LLC directly handle the management of the limited liability company
Exempt Company
The main advantage of an exempt company is the complete exemption of the profit from tax payments while preserving the features of the LLC in terms of the favourable restrictions of the financial liability of shareholders. Precisely, they are liable only within the amounts unpaid to their shares.
This company can be formed by one or more persons, either natural or legal. The company must maintain the register of its members, and beneficiary owners. The information of the beneficiary owners is confidential by default and can be disclosed in limited amounts in certain cases.
The status of an exempt company should be mentioned in its statutory documents. Such a company is required to hold an annual general meeting at least once per year. A minimum 1 director is required to manage the company’s affairs.
Permit Company
A permit company is a suitable option for overseas companies that become eligible to conduct business activities upon the obtainment of a permit from the Minister of Finance. Such a company will have a place of business in Bermuda with an option to carry out a business outside the jurisdiction. Appointing a representative is also required in this case.
Mutual Funds Company
This type of company is limited by shares with statutory capital and is formed to invest its members' funds for their mutual benefit. Such members' liability is limited to the amount unpaid to their shares.
General Partnership
In a general partnership, the business activities are conducted by two or more partners jointly while they bear the same joint liability for all the results of such business undertakings.
Limited Partnership
This type of company can be arranged by (i) one or two persons who are general partners responsible for the management and its outcomes jointly and severally and (ii) one or more persons who aren’t liable for any debts of such a partnership.
Trust
A trust is best suited for asset management with an opportunity to ensure sufficient protection. Trusts are not permitted to conduct trading activities.
Eligibility Criteria for Company Registration in Bermuda
The eligibility criteria for Company Registration in Bermuda is
- The company name must not consist the word likeRoyal", "Imperial", or "Chartered", as these are restricted words
- All Exempt Companies in Bermuda must have a registered office where all official documents may be served, and company registers and accounts must be kept.
- 1 director
- 1 shareholder
- 1 company secretary
- The minimum share capital of USD1
Documents Required for Company Registration in Bermuda
The Documents Required for Company Registration in Bermuda are -
- The memorandum of association of the company
- The certificate of incorporation
- The company’s registered address
- A list of the company’s directors
- The registrar of charges of the company
- Any prospectus filed with the registrar
Procedure Company Registration in Bermuda
The applicant must follow the below-mentioned procedure for company registration in Bermuda.
Selection of the company’s name
The applicant must select a unique name for the company and coordinate with the state registrar of legal entities for verifying the same.
Selection of the legal address of the company
For a company to be registered in Bermuda, it must have a registered office address for conducting business.
Collection of Shareholder’s Details
The next step is the collection of the shareholder's details and maintaining a record of the same, along with defining the shareholders.
Appointment of directors
After gathering the details of the shareholders, the next step is to appoint the directors depending on the type of company.
Drafting of MOA
The applicant must proceed with drafting the MOA of the company for the next step of company registration in Bermuda.
Filing an application and submission of the documents
After arranging the required documents, the applicant must proceed with filing the application, followed by submission of the documents to the registrar
Payment of Stamp Duties and State Duties
The next step is the payment of the requisite fees and disclosing the duties of the relevant persons.
Opening a Corporate Bank Account
Upon the company's registration, the applicant must open a corporate bank account for conducting the day-to-day financial activities of the business.
Obtaining Licenses and Special Permits
The final step is to obtain the business licence and permits depending upon the nature of the business activities.
Frequently Asked Questions
The documents are - The memorandum of association of the company, certificate of incorporation, company’s registered address, list of the company’s directors, The register of charges of the company, any prospectus filed with the registrar.
The responsibility of company registration in Bermuda is with the registrar.
No, an Exempted Company cannot hold property in Bermuda
No, a permit Company cannot hold property in Bermuda
A trust is best suited for asset management with an opportunity to ensure sufficient protection. Trusts are not permitted to conduct trading activities.
