Bermuda: Bermuda's Sophisticated International Transparency And Regulatory Environment

Last Updated: 28 July 2017
Article by Stephanie Sanderson

Increasing complexity in cross-border structures, the effects of the recent global financial crisis, increasing fears over diminished tax revenues and multiple financial scandals have impacted various countries around the world. These concerns, and increased globalisation, have driven the push for greater transparency and internationally agreed standards of due diligence and reporting. International financial centres must now uphold the principles of transparency and exchange information with global partners in order to stay in the game.

Bermuda's reputation as a 'blue chip' international business jurisdiction and its long-standing position of transparency and cooperation has historically differentiated Bermuda from other jurisdictions. Discerning fund managers and investors are increasingly seeking a sophisticated jurisdiction which offers balanced regulation and is internationally respected as a place in which to invest and conduct business. Bermuda provides this 'gold standard'. The jurisdiction is therefore benefitting from a flight-to-quality phenomenon as fund managers, investors and organisations are increasingly reacting to global regulatory pressures and finding that Bermuda is a safe and respected offshore jurisdiction.


Bermuda is an overseas territory of the United Kingdom with English as its official language and is ideally located between Europe and the United States. It is regarded as a reputable international finance centre with sophisticated international business carried on in the jurisdiction and a strong infrastructure including a 400-yearold court system, an internationally recognised stock exchange (Bermuda Stock Exchange) and depth of market experience. Bermuda is home to an unrivalled collection of talent and intellectual capital in key sectors and services including fund administrators, auditors, financial advisers, lawyers, IT specialists, corporate secretaries and a full range of support services.

Bermuda's principal regulator, the Bermuda Monetary Authority, is globally recognised as meeting international standards and is a member of the International Organisation of Securities Commissions. In 2016, Bermuda was granted coveted full EU Solvency II equivalency which means that Bermuda's commercial (re) insurers are not disadvantaged when seeking and writing business in the EU, an achievement that serves as concrete validation of the jurisdiction's regulatory sophistication. Bermuda has further achieved recognition by the US National Association of Insurance Commissioners as a Qualified Jurisdiction – one of only seven foreign jurisdictions with this designation.

Bermuda was selected as one of the hand-picked countries which the European Securities and Markets Authority (Esma) identified to assess in respect of the EU Alternative Investment Fund Managers Directive (AIFMD). It has been actively working to demonstrate that it should be granted the AIFMD 'passport' — a recognition that, if Bermuda achieves, would provide important benefits to Bermuda's investment funds sector and yet another reason for fund managers to establish offshore funds in Bermuda.


Bermuda maintains its reputation as an industry leader through its well-balanced and collaborative approach when it comes to its regulatory environment and transparency regimes. The jurisdiction continuously modernises its legislation and infrastructure to offer competitive options to fund managers, stakeholders and potential investors in Bermuda.

The Bermuda Government and Bermuda Monetary Authority work closely with the private sector to develop laws and regulations that enhance the business environment in Bermuda by implementing sensible, risk appropriate and forward-thinking policies and globally recognised regulatory regimes.


Bermuda is recognised by the international community for its commitment and cooperation as regards transparency and information exchange while maintaining a sensible, business-friendly approach. Bermuda is fully committed to global initiatives to prevent tax evasion and money laundering and has continued to score well on internationally recognised indices.

Bermuda's consumption-based tax system has been in place for over 100 years and has served it well in financing its government and infrastructure. Bermuda's tax laws and various treaty commitments avoid double taxation of corporations and it is committed to assisting other jurisdictions claim revenue their taxpayers are obligated to pay.

Bermuda can be credited with maintaining a beneficial ownership registry for about 70 years, long before the international community agreed that this should become a standard requirement in major business centres, and it continues to hone the regime. 'Anonymous shell companies' are simply not permitted in Bermuda.

Bermuda has bilateral Tax Information Exchange Agreements with 43 jurisdictions and was the first jurisdiction to be elevated to the Organisation for Economic Cooperation and Development (OECD) 'white list' in 2009 in recognition of the implementation of internationally agreed tax standards. Bermuda has never had bank or financial secrecy laws and the jurisdiction implemented the Basel III global regulatory framework for more resilient banks and banking systems in 2015, imposing capital adequacy requirements and liquidity coverage ratios.


International automatic exchange of information regimes began with the establishment of the United States' Foreign Account Tax Compliance Act (Fatca) and the United Kingdom's 'UK Fatca' or 'CDOT' (CDOT) some years ago. The principle was solidified more recently through the large-scale adoption of the Common Reporting Standard (CRS) and has been further developed by the introduction of Country-by- Country Reporting through the OECD's Base Erosion and Profit Shifting (Beps) Project.

Bermuda entered into inter-governmental agreements in 2013 with the US and the UK to exchange tax-related information under Fatca and CDOT on account holders located in Bermuda. However, the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Convention) is one of the keys to the legal and operational structure for the automatic exchange of information under the CRS and Country-by-Country Reporting and includes rules on confidentiality and proper use of information. It is a freestanding agreement developed jointly by the OECD and the Council of Europe and is the most comprehensive multilateral instrument available in the area of tax co-operation. The Convention was extended to Bermuda in 2014.


Bermuda was one of the first countries to sign up to the CRS as part of the 'Early Adopter Group', undertaking the first exchanges of information by September 2017.

The CRS framework was developed by the OECD in response to requests by the G20 and calls on jurisdictions to obtain information from financial institutions and automatically exchange information with partner jurisdictions on an annual basis. The CRS has become the global standard for the automatic exchange of tax-related financial information which includes information relating to bank accounts and certain financial assets.

The CRS draws extensively on the intergovernmental approach of Fatca, although the CRS does deviate in certain respects. The United States has not adopted CRS but has continued with the Fatca regime so that, in Bermuda, Fatca runs alongside the CRS whereas CDOT will eventually be replaced by the CRS.


Bermuda was the first British Overseas Territory to adopt the OECD's Country-by-Country Reporting regime. The 15-point Beps Action Plan was introduced by the OECD and G20 countries to enhance transparency for tax administrations by providing them with information to assess high-level transfer pricing and other Beps-related risks. Action 13 includes the Country-by- Country Reporting regime and provides for annual reporting in each tax jurisdiction in which a multinational group (meeting the criteria) does business.

The Country-by-Country Reporting regime only applies to multinational enterprises located in two or more jurisdictions that meet the €750m ($839.1m) threshold. It is expected that this threshold exempts approximately 85-90% of multinational enterprise groups who, as a result, do not fall within the ambit of the regime.


Now, more than ever, it is important to stay informed by monitoring developments on both international and domestic fronts. The OECD website is essential for keeping up with the latest developments in relation to its global initiatives and regimes, including the CRS and the Beps Project. Domestically, the Bermuda Ministry of Finance has issued various statements and guidance on transparency matters including Fatca, CDOT, CRS and Country-by-Country Reporting which are available through its web page.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions