Bermuda is an Overseas Territ ory of Great Brit ain sit uat e 917 km due east off t he Nort h Carol ina coast in t he Western Atl ant ic Ocean. It s const it ut ion provides for democrat ic sel f-Government. The l egal syst em is common l aw and it s currency, t he Bermuda Doll ar, is pegged t o t he US Doll ar. Modern company, t rust , banking, insurance and ot her rel at ed l aws have made Bermuda a l eading offshore financial centre. The Bermuda government 's att itude t owards and open communication wit h t he privat e sect or encourages t he promot ion and maint enance of Bermuda's offshore business. The I sl and enjoys a sophist icated t el ecommunicat ions syst em, an abundance of professional service providers, as well as economic and pol it ical stabil it y.


At t he heart of est abl ishing and maint aining a successful e-commerce vent ure is t he avail abil it y of expert ise and rel iabl e service providers. Despit e it s size of 21 square mil es, Bermuda has an abundance of t al ent ed professional s incl uding l awyers, account ant s and I T special ists. There are five1 l ocal Int ernet Service Providers and a number of tel ecommunicat ions companies on t he I sl and who can provide an ebusiness with it s necessary services. Digit al certificat ion for el ect ronic signat ures, host ing and secure server co-l ocat ion facil it ies and dedicat ed l ines are just a few of t he opt ions avail able in Bermuda t o ecommerce ent repreneurs. I n The Economist: Economist Int ell igence Unit: Digit al economy rankings 2010: Beyond e-readiness, Bermuda ranked 22 out of 70 jurisdict ions and was t he onl y offshore financial cent re t o appear.


Bermuda l aw dist inguishes bet ween l ocal companies, t hose predominantl y owned by Bermudians, and those owned predominantl y by non-Bermudians, exempted companies. Onl y l ocal companies are permitt ed t o carry on and compet e for l ocal business. Exempt ed companies are based in Bermuda but can onl y carry on business in connection wit h t ransact ions and act ivit ies which are ext ernal t o Bermuda. The Bermuda exempt ed company is the preferred vehicl e for e-commerce business.

3.1. Approval

The Bermuda Monet ary Aut horit y (t he "BMA") must approve the incorporat ion of all Bermuda exempt ed companies. Each of t he ult imat e beneficial owners hol ding 10% or more of t he share capit al of t he proposed company is required t o sign a decl arat ion att est ing t o his or her good st anding and provide a cert ified copy of t heir passport or ot her official ident ificat ion and proof of address. The ult imat e beneficial owners' ident it y and detail s of int ermediat e hol ding ent it ies must , in all inst ances, be discl osed.

3.2. Name

If t ime permit s, t he proposed name of t he company can be reserved with t he Registrar of Companies (t he "Registrar") for t hree mont h periods. The name reservat ion can usuall y be confirmed within 24 hours. Reservat ion will be refused if there is an obvious confl ict wit h an exist ing regist ered name. Formal cl earance cannot be obtained unt il incorporat ion but reservation at l east ensures t hat no ot her person can incorporat e a company using an ident ical or very simil ar name in t he meant ime.

3.3. Constitution

The memorandum of associat ion and t he bye-l aws t oget her form t he const it ut ion of a Bermuda exempt ed company. Pl ease see our publ icat ion on Exempt ed Companies for more informat ion regarding t he object s and powers, capit al requirement s et c. of a Bermuda exempt ed company.

3.4. Taxes and Exchange Control

There is no Bermuda income or profit s t ax, wit hhol ding t ax, capit al gains t ax, capit al transfer t ax, est at e dut y or inherit ance t ax payabl e by a Bermuda company or it s sharehol ders, ot her than sharehol ders ordinaril y resident in Bermuda.

Under t he Exempt ed Undert akings Tax Prot ect ion Act 1966, an exempted company may appl y t o t he Minist er of Finance for an assurance t hat if any l egisl at ion is enact ed imposing t ax comput ed on profit s or income, or comput ed on any capital asset s, gain or appreciat ion, or any t ax in t he nature of est ate dut y or inherit ance t ax, it shall not be appl icabl e t o t he company until March 2035. No st amp dut y is payabl e in respect of any inst rument execut ed by an exempt ed company or in respect of an inst rument rel at ing t o an int erest in an exempt ed company, except on t ransact ions invol ving Bermuda propert y.

Bermuda is independent for t he purposes of exchange cont rol . Exempt ed companies and permit companies are designated non-resident for exchange cont rol purposes. The non-resident designat ion all ows t hese ent it ies t o operat e free of exchange cont rol regul ations and enabl es t hem to make payment s of dividends, t o dist ribut e capit al , and t o acquire, hol d and sell any currency and foreign securit ies wit hout reference t ot he BMA.


The cost of est abl ishing and operat ing an e-commerce exempt ed company from Bermuda is reasonabl e in t he circumst ances. The benefits of t he offshore domicil e shoul d out weigh t he higher cost s of communications.


Whet her engaged in Business t o Business, Business t o Consumer or Business t o government transact ions, l ocal banks in Bermuda are well equipped t o assist an e-business requiring offshore secure payment processing services. The avail abil ity of mult i-currency settl ement payment processing is part icul arl y att ract ive t o I nt ernet merchant s as most consumers are more comfort abl e buying goods onl ine in t heir own currencies. Allowing consumers t he opt ion of purchasing goods in a variet y of currencies can boost earnings pot ential , provide a compet it ive edge and subst ant iall y reduce t he cost s and risks associat ed with foreign exchange t ransact ions for the e-business.


The El ect ronic Transactions Act 1999 (t he "ETA") came int o force in Bermuda on 4 Oct ober 1999. Copies of t he ETA are avail abl e from Conyers upon request. The ETA is a fl exibl e and enabl ing Act t hat represent s the cont ributions and ideas of t he l ocal and internat ional business communit y and t he Bermuda government . The object ives of t he ETA are t o enhance t he reput at ion of Bermuda as an int ernat ional business cent re, facil it ate el ect ronic transact ion on a t echnol ogy neut ral basis by means of rel iabl e el ectronic records, remove uncert aint ies in rel at ion t o conducting business on-l ine, promot e publ ic confidence in t he val idit y, integrit y, and rel iabil it y of conduct ing transact ions el ect ronically, and promot e t he devel opment of t he l egal and business infrastruct ure necessary t o impl ement elect ronic transact ions securel y. Outl ined bel ow is a summary of a few of t he areas addressed by t he ETA t hat will no doubt be of vit al import ance t o an e-business.

6.1. Legal Recognition of Electronic Records

The ETA gives el ect ronic records l egal recognit ion. It provides t hat informat ion shall not be denied l egal effect , val idity, admissibil it y or enforceabil it y sol el y on t he ground t hat it is in t he form of an el ect ronic record.

6.2. Legal Requirements in Relation to Electronic Records


Where informat ion is required by l aw t o be in writ ing, an el ect ronic record will sat isfy t hat requirement if it is accessibl e and capabl e of ret ention for fut ure reference.


An el ect ronic record will sat isfy t he l egal requirement for informat ion t o be del ivered, dispat ched, given or sent , or served on a person where t he originat or of t he el ect ronic record st at es that receipt is t o be acknowl edged and t he addressee acknowl edges receipt . Unl ess ot herwise agreed by the originat or and the addressee, t he dispat ch of an el ect ronic record occurs when it enters an informat ion processing syst em out side t he cont rol of t he originat or.

Electronic Signatures

The ETA provides t hat the l egal requirement for a person's signat ure will have been met if a rel iabl e met hod is used t o identify a person and indicate t hat t hey int ended t o sign or ot herwise adopt t he informat ion in t he part icul ar el ect ronic record. Under Bermuda's common l aw, val id signat ures may be creat ed by any el ect ronic met hod, incl uding l ight pens, encrypt ion software, and jpeg fil es t hat add an image of a signat ure or ot her attribut e t o a document wit h t he intent ion of aut hent icat ing t hat t he document 's aut hor put it there.

Electronic Signature Certification

El ect ronic signat ures can be cert ified by an accredit ed cert ificat e issued by a cert ificat ion services provider (CSP) aut horised by t he Minist er of Economy and Labour. An accredit ed cert ificat e issued by a CSP will be deemed t o ident ify t he signat ory and indicat e t hat such person int ended to sign or adopt t he informat ion in t he el ect ronic record. Currentl y t he onl y CSP aut horised by t he Minister of Economy and Labour is Quo Vadis Limit ed, a Bermuda company. The Economic Devel opment Depart ment has indicat ed t hat overseas CSPs may be abl e t o qual ify for aut horisat ion by adopting a recognised int ernat ional st andard.

Variation by Agreement

The ETA provides t hat the l egal requirement s and communicat ion of el ect ronic records may be varied by agreement .

6.3. Formation and Validity of Contracts

In t he cont ext of format ion of cont ract s, t he ETA enabl es an offer and t he accept ance of an offer t o be expressed by means of el ect ronic records.

The ETA does not appl y t o will s or other t est ament ary inst rument s or t o a conveyance of an int erest in real property. Cert ain act ivit ies t hat are generall y prohibited under Bermuda l aw, for exampl e t he operat ion of a l ott ery or gambl ing facil it y, are al so prohibit ed by el ect ronic means.

6.4. Standard for Electronic Transactions

The St andard for El ect ronic Transactions (t he "Standard") is an ext ension of t he ETA designed t o prot ect the int erest s of consumers and businesses by means of a regul at ory st andard. It appl ies t o int ermediaries and e-commerce service providers carrying on business in Bermuda, or which are ident ified wit h Bermuda for t he purposes of t he ETA.

The St andard imposes a l evel of responsibil it y upon int ermediaries and e-commerce service providers t o (i) observe business int egrit y; (ii) know your cust omer; (iii) know your own business; (iv) prot ect personal dat a; and (v) avoid abusive usage. E-commerce service providers must al so (i) advert ise t rut hfull y; (ii) deal fairl y and openl y with cust omers; and (iii) settl e compl aint s and disput es quickl y and fairl y.

Where an intermediary or e-commerce service provider has act ual knowl edge of any matt er or conduct which fall s bel ow t he st andard required, t hey must t ake act ion fort hwit h to remedy or terminat e t he matt er or rel at ionship giving rise t o t he non-compl iance. If in doubt as t o how t o proceed, t hey may appl y t o t he Minist er for direct ions. The Minist er of Economy and Labour will init iall y give an int ermediary or ecommerce service provider who does not compl y wit h t he St andard a written warning direct ing t hem as appropriat e. I f t hey fail t o adhere t o t he writt en warning, t hey will be guil ty of an offence and l iabl e on summary convict ion t o a fine of US$5,000 for each day on which t he contravent ion cont inues.

An int ermediary or e-commerce service provider shall be deemed t o have observed the St andard and be in compl iance if t heir systems, procedures and pract ices are subst ant iall y in accordance wit h t he following Safe Harbour Guidel ines:

  • The Maint enance of Effect ive Monit oring Syst ems
  • The Est abl ishment of Effect ive Cont ract s
  • Inst it ut e Effect ive "Know Your Cust omer" Pract ices
  • Est abl ish Syst ems t o Protect Privacy (which an intermediary or e-commerce service provider may opt out of by not ifying its cust omers or ot her persons from whom it collect s personal dat a or business records t hat it does not intend t o observe t he Safe Harbour Guidel ines principl es in rel at ion t o privat e dat a)
  • Est abl ish Pract ices t o Avoid Abusive Usage
  • Est abl ish Compl aint s and Disput es Syst ems
  • Est abl ish Business Practices which are Transparent
  • Est abl ish Syst ems t o Avoid Misl eading St at ement s or Omissions

6.5. Encryption

Pursuant t o the ETA, t he Minist er of Economy and Labour is vest ed wit h t he power to make regul at ions in rel at ion t o t he use, import and export of encryption programs. To dat e no such regul at ions have been made.

6.6. Data Protection

The ETA empowers t he Minist er of Economy and Labour t o make regul at ions deal ing wit h dat a prot ect ion. To dat e no such regul ations have been made. Not wit hst anding t his, t he ETA it sel f, t hrough the St andard, recognizes t he European "Safe Harbour" principl es (enabl ing intermediaries and ecommerce service providers t o opt in t o t he European st andard in connect ion wit h data t ransfer bet ween Bermuda and EU Count ries) whil e al so t aking account of t he US view t hat t he free exchange of informat ion is a necessary right . In so doing, it provides for a sat isfact ory compromise bet ween t he European and American approaches by all owing an int ermediary or e-commerce service provider t o "opt in" t o t he "Safe Harbour" principl es when t ransferring dat a bet ween Bermuda and European count ries and "opt out" when t ransferring dat a bet ween Bermuda and all non-EU count ries.

The Personal I nformat ion Prot ect ion Act 2016 ("PIPA") was enact ed but as of t oday's dat e is not full y in force. For furt her informat ion pl ease cont act us.

6.7. Intermediaries and Service Providers

Recentl y much concern has been expressed in ot her jurisdict ions over whet her an int ermediary can be subject t o civil or criminal l iabil it y for informat ion cont ained in an el ect ronic record. The ETA provides that an int ermediary is not civill y or criminall y l iabl e for informat ion contained in an el ect ronic record of one of it s cust omers provided t he intermediary was not t he originat or of t he el ect ronic record and (a) has no act ual knowl edge t hat t he information gives rise t o civil or criminal l iabil ity; (b) is not aware of any fact s or circumst ances from which t he l ikel ihood of civil or criminal liabil it y in respect of t he informat ion ought reasonabl y to have been known; or (c) foll ows the procedure set out in Sect ion 28 of t he ETA if t he int ermediary: (i) acquires knowl edge t hat t he informat ion gives rise to civil or criminal l iabil ity; or (ii) becomes aware of facts or circumstances from which t he l ikel ihood of civil or criminal l iabil it y in respect of t he informat ion ought reasonabl y to have been known.

It is import ant t o not e t hat t here is no obl igat ion pl aced on an int ermediary t o monitor any informat ion cont ained in el ect ronic records aut hored by it s cust omers. However, once t he int ermediary acquires knowl edge of informat ion giving rise t o civil or criminal l iabil it y or becomes aware of fact s or circumst ances from which t he l ikel ihood of civil or criminal l iabil it y in respect of t he informat ion ought reasonabl y to have been known, it must , among ot her t hings, remove t he informat ion from syst ems wit hin it s cont rol and not ify t he Minist er of Economy and Labour of the fact s and ident it y of the person.

If it fail s t o do t his, t he Minist er will give t he int ermediary a writt en warning. I f t he int ermediary t hen fail s t o compl y with t he t erms of t he warning it will be guilt y of an offence and may be fined US$5,000 for each day it cont inues t o cont ravene t he warning.

The ETA provides t hat where a corporat ion is guilt y of an offence, each person who was a direct or or officer of t he corporat ion at t he t ime of t he offence is guilt y of t he offence unl ess t hey prove t he offence t ook pl ace wit hout his or her consent or t hat he or she exercised al l due dil igence t o prevent t he commission of t he offence.

6.8. Law and Jurisdiction

The ETA does not contain any deeming provisions in respect of any appl icabl e l aw or jurisdiction for disput e resol ut ion. It is int ended t hat t he det erminat ion of t he proper l aw and jurisdict ion be made on t he basis of existing confl ict of l aws principl es.

6.9. Cryptocurrencies/Digital Asset Business

Crypt ocurrencies, as used in e-commerce, are defined by t he Financial Act ion Task Force as "dist ribut ed, open-source, mat h-based peer-t o-peer virt ual currencies t hat have no cent ral administ rat ing authorit y, and no central monit oring or oversight ". Bermuda's regul at ors have t o dat e issued no regul ations or guidance regarding t he use of cryptocurrencies in e-commerce, e.g. Bit coin.

Wit h t he passing of t he Digit al Asset Business Act 2018, Bermuda creat ed one of t he worl d's first digit al asset business (DAB) regimes.

The BMA currentl y offers t hree t ypes of DAB l icences t hat enabl e ent it ies to conduct act ivit ies from wit hin Bermuda t hat fall under the Digit al Asset Business Act 2018 (l ist ed bel ow): t he Test "T" Licence, for t hose seeking t o test t heir proof of concept; t he Modified "M" Licence for t hose seeking t o expand operat ions for a l imit ed period and the Full "F" Licence for companies seeking t o provide any or all of t he fol l owing DAB act ivit ies:

  • Issuing, sell ing or redeeming virt ual coins, t okens or any ot her form of digit al asset ;
  • Operat ing as a payment service provider business ut il ising digit al asset s which incl udes t he provision of services for the t ransfer of funds;
  • Operat ing as a digit al asset exchange
  • Operat ing as a digit al asset t rust services
  • Providing cust odial wall et services
  • Operat ing as a digit al asset derivat ive exchange provider
  • Operat ing as a digit al asset services vendor


Bermuda has comprehensive l egisl ation prot ect ing all aspects of int ell ectual propert y ("IP"). Bermuda I P l aws l argel y derive from their UK equival ent s and cont inue to evol ve t o meet t he needs of t echnol ogical devel opments and t rends.

If an e-business is incorporat ed in Bermuda, it may regist er it s domain name on t he ".bm" domain. The ".bm" domain is onl y avail abl e t o companies incorporat ed in Bermuda. Regist ering and using a .bm domain name may al so be advant ageous t o an e-business for ot her reasons. The European Union ECommerce Direct ive defines t he pl ace of est abl ishment as the pl ace where an operat or act uall y pursues an economic act ivit y t hrough a fixed est abl ishment , irrespect ive of where websit es or servers are sit uat ed or where t he operat or may have a mail box. It may be advisabl e for an e-business wishing t o est abl ish it sel f in Bermuda t o, among ot her t hings, incorporat e a l imit ed l iabil it y company and regist er a .bm domain name so as many st eps as possibl e are t aken t o demonstrat e t hat it is est abl ished and domicil ed in Bermuda.

The Domain Administ rat ion for t he .bm Count ry Code Top Level Domain is provided by t he Bermuda NI C Regist ry operat ed by t he Regist ry General . For more informat ion on the .bm domain pl ease consult www.bermudanic.bm.

Bermuda operat es it s own independent t rade mark and pat ent registries. More informat ion on t he regist rat ion process can be obt ained from Conyers' publ icat ion "I nt ell ect ual Property and Trade Mark Prot ect ion in Bermuda". Qual ifying copyrights are prot ect ed by st atut e from t he t ime of creat ion. Regist rat ion of copyright in Bermuda is not necessary or even possibl e.

The rel ief avail abl e in Bermuda for I ntell ect ual Propert y infringement is ext ensive. It incl udes emergency and permanent injunct ions, Ant on Pill er orders where t he dest ruct ion of evidence by t he defendant is l ikel y, del ivery up and/or dest ruct ion of infringing art icl es, and full discovery upon oat h and damages, which coul d eit her be by way of an enquiry or an account of profit s. Taxed cost s oft he proceedings will usuall y be awarded t o t he winning part y.


The worl d of e-commerce changes quickl y. Bermuda as a jurisdict ion is part icul arl y adapt ive t o change, making it well suit ed t o add e-commerce t o it s areas of expert ise. A sensibl e regul at ory environment , t oget her with an abundance of qual it y service providers, makes Bermuda a prime jurisdict ion for t he est abl ishment of e-commerce business. Bermuda has been on t he cutt ing edge of e-commerce l egisl at ion from t he indust ry's beginnings and promises t o remain t here by maint aining a fl exibl e approach t o new t echnol ogical advancement s.

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.