Bermuda: Offshore Business Sectors
Commercial Trading Companies
Given its small size and distant location, Bermuda is not suited to be a base for physical warehousing, processing or distribution into the vast EU and US markets that lie on either side of it. Financial services have therefore understandably tended to dominate the island's business development in the last quarter of a century.
It is sure that the advent of the Internet and e-commerce has opened up a highly attractive new line of business for offshore jurisdictions which like Bermuda have sophisticated business infrastructure and good Internet facilities. In fact, the Government has made a point of passing comprehensive e-commerce legislation, and has very publicly committed itself to developing the e-commerce sector.
For a company with B2C or B2B trading operations in high-tax countries, this means that large parts of its sales, marketing and procurement activities can be based in a low-tax area such as Bermuda. Distribution of physical goods in high-tax areas can be outsourced, and distribution of digital goods (eg software or music) can take place from Bermuda itself. Corporate structures can be adjusted so that profits do not have to be remitted to the high-tax jurisdiction. At least one major software and systems supplier has moved its distribution division to Bermuda lock, stock and barrel.
See Offshore-e-com.com for extended descriptions of how businesses can take advantage of the combination of offshore and e-commerce, and see E-Commerce In Bermuda for more details of the facilities that are available on the island.
The Companies Amendment Act 2006, which was passed late that year, included the creation of a system of registration for companies with Non-Roman secondary names, the removal of the minimum share capital requirement and the extension of the rights of a natural person (companies having unrestricted objects) to companies incorporated in Bermuda. Also covered by the Amendment Act were the creation of a system which would facilitate the delivery of electronic records, provision for the indemnification of directors and the implementation of treasury shares.