Bermuda: Executive Summary

Bermuda Not in The Caribbean

Bermuda is a mid-Atlantic archipelago 1,000 km from the USA; it is not in the Caribbean (1,500 km to the south). Bermuda is a self-governing Crown dependency. It is politically stable; English is the official language; and the Bermudian dollar is at parity with the US dollar. The climate is warm and humid; but sea breezes temper the high summer temperatures. Population is 68,680 (July, 2010 est.) and growing despite limited land availability. The islands are rich: Bermuda's GDP in 2010 was over USD5.85 billion, giving a GDP per head of more than USD91,477. Gross National Income per Capita in 2010 was USD89,935 and expected to exceed USD99,000 in 2011.

Economy Buoyant Based on Financial Services and Tourism

By excluding foreign banks until recently, Bermuda avoided problems and grew as a reputable international finance centre with three of its own widely-branched banks. Financial services account for a significant majority of GNP; tourism is also important, with more than 400,000 visitors a year, mostly from the US. The Bermuda Stock Exchange (established 1973) trades electronically and provides global access to its settlement systems. By 2010, Bermuda counted four banks, only one of the them being local.

Bermuda's Lowtax Specialisations

Bermuda has particularly strong insurance, investment fund and trusts sectors, with very well-developed advisory and financial infrastructure. The Bermuda captive insurance sector is the world's largest. Hamilton is a British port of registry. There is a sophisticated infrastructure including the major international law and accounting firms. The Government intends to encourage the development of e-commerce in Bermuda and has put effective legislation in place.

No Income Tax in Bermuda!

There is no income tax, capital gains tax, VAT, sales or use tax or wealth tax. Annual government fees are imposed on businesses and there is a payroll tax. Local businesses must be controlled by Bermudians but offshore operations take place through 'exempt' or 'permit' companies. Due to an error in Brussels, Bermuda is not subject to the EU's Savings Tax Directive.

Immigration Controlled by Housing and Work Permits

With space severely limited, the Government controls access to Bermudian housing and jobs through systems of permits which encourage suitable business development but otherwise discourage immigration. Government moves to introduce strict quotas enforcing the employment of local workers are seen as negative by business and have not been effective.

Bermuda Not On OECD Black-List

In June 2000 Bermuda signed a letter of commitment to the OECD agreeing to conform with international standards of transparency and financial supervision. As a result it was not included on the OEDC's Financial Action Task Force 'Black-List' of unco-operative jurisdictions. In April, 2009, Bermuda was placed on the OECD's 'grey' list, but removed on June 8, 2009, following the signing of a Tax Information Exchange Agreement with the Netherlands.