Overview of Opening a Bank Account in Bermuda
One of the primary reasons for opening a corporate bank account in Bermuda is the local tax law. Countries not having any capital gains tax for locals or foreign nationals and holding an offshore account in that country make such jurisdictions attractive. Most offshore bank accounts are opened not just for the protection of wealth but also to increase tax efficiency. Bermuda provides the best of both worlds as it has many of the classic benefits of offshore banking jurisdictions without any bad reputation or shady players.
Owing to the geographical isolation of Bermuda, many banks on these islands offer the opportunity to open a bank account remotely. In fact, due to the banks in Bermuda having such a streamlined remote account opening process, many people tend to use this route.
Benefits of Opening a Bank Account in Bermuda
The different benefits of opening a bank account in Bermuda are -
One of the top reasons for opening a bank account in Bermuda is it being an incredibly tax-friendly jurisdiction due to the absence of tax on capital gains, business profits, or most other forms of income. A Bermuda bank account can be helpful in the tax planning of the account holder. Additionally, the Bermuda bank account enables an efficient buy and sell of shares of local investment funds, and as a non-resident, the entrepreneur won't be required to pay tax on those earnings.
Positive Banking Reputation
Although Bermuda is often considered a tax haven, it's also known to be a highly reputable place to bank. Unlike other classic offshore jurisdictions, banks in Bermuda haven't been engaged in tax evasion scandals or other immoral activities. The government of Bermuda takes a balanced approach to banking regulation – there is enough oversight for preventing bad actors from playing with the system, but this destination clearly values business and financial freedom as well. The destination has also taken steps on the international stage for proving its commitment to transparency, such as being a part of the Common Reporting Standard (CRS).
In addition to being a tax-friendly jurisdiction and a solid reputation, Bermuda also has excellent banks. For decades, foreign banks weren't allowed to carry out their operations in Bermuda, so all established banks in the country have ties to their local economy. Even HSBC, which opened branches in Bermuda in 2004, managed to establish a presence on the island by merging with a local institution, i.e. the Bank of Bermuda. Due to the bank being integrated with the local economy, they are more stable as they aren’t over-inflated with foreign cash.
The local currency of Bermuda is also tied directly to the value of the USD, which only adds to the stability of Bermudan banks. Unless the USD plunges overnight – which is highly unlikely – there won't be any worry about currency instability upon opening a bank account in Bermuda.
Global Citizen Friendliness
Not all banking jurisdictions deal with international clientele. While this doesn't make them any bad places to the bank, it can make opening and management of the accounts more difficult. However, this isn't the case in Bermuda as the large financial sector is dealing with a variety of clients worldwide to avoid confusion for a Canadian, German, or Chinese person intending to open an account in Bermuda. The banks of Bermuda have services specifically designed for their international clientele, along with allowing them to open an account remotely.
Requisite Documents for Opening a Bank Account in Bermuda
The below-mentioned documents are required for Opening a Bank Account in Bermuda.
- Business Registration proof that specifies all partners involved with the business
- Proof of most recent payment of payroll tax
- Business address proof such as (utility bill, commercial rental agreement, or relevant page of a telephone directory)
- Verification of the main source of income (pay slip, letter from employer or trust, investment statement, business plan)
- Identity Proof for account holders and signatories
- Address Proof for account holders and signatories
Procedure for Opening a Bank Account in Bermuda
The procedure for Opening a Bank account in Bermuda is discussed below –
Selection of Bank
The very first step in the procedure for opening a bank account in Bermuda, which must be taken by the entrepreneur, is the selection of the Bank for opening the corporate bank account, depending upon the activities of the business.
Arrangement of the Required Documents
The next step is to arrange the documents required for opening a bank account in Bermuda, as discussed above.
Filing the Application and Submitting the Documents
All banks in Bermuda require the entrepreneur to fill out and submit the application form to open an account. This form will provide the bank with enough personal information, which can help in the verification of the entrepreneur’s identity, followed by setting up an account in his name.
Deposit the initial funds and make use of the account.
Upon the approval of the bank account, the entrepreneur will be able to make the required initial deposit and start using the account. Most Bermudan banks will allow for transferring money from the entrepreneur’s account and making deposits or withdrawals remotely. The entrepreneur must coordinate with the bank to learn more about their specific policies regarding its services. Some of the services offered by the Bermudian Banks are -
- The initial deposit can be made with cash, cheque, card, wire or draft.
- Demand checking accounts are usually offered in most currencies.
- International wire transfers can send or receive funding worldwide.
- Real-time account information with e-banking.
- Certain additional services like receiving reference letters, faxes, couriers, safe deposit boxes and complimentary photocopies.