Unit Trusts are frequently used in Bermuda. There is at present no specific applicable legislation, but a unit trust scheme is defined in the Stamp Duties Act as "any arrangement made for the purpose, or having the effect of providing for persons having funds available for investment facilities for participation by them as beneficiaries of a trust, in profits or income arising from the acquisition, holding, management or disposal of any property whatsoever". The promoters of a Unit Trust require approval by the Bermuda Monetary Authority. The management company will normally be incorporated in Bermuda, an acceptable bank or trust company must be the custodian and a registrar and transfer agent in Bermuda is required. It is somewhat surprising that far more made of (corporate) Mutual Fund structures, when one considers the lower costs and greater flexibility offered by Unit Trusts. This may simply be symptomatic of a "fear of the unfamiliar" which pervades trust applications generally. This will disappear as the Trust movement gathers momentum.
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.
