Bermuda: Offshore Legal and Tax Regimes
Employment and Residence
In common with some other crowded and attractive offshore jurisdictions, Bermuda limits immigration through tough controls on work permits and housing.
The Bermuda Immigration and Protection Act 1956 requires that a non-Bermudian, not being married to a Bermudian, must obtain a work permit, and this will only be granted if there is no suitably qualified Bermudian. Positions must first be advertised locally before a permit is applied for, although this requirement is often waived for senior positions. Work permits are normally granted for one year (longer in the case of senior posts). Permits are not normally given to people with more than two children. Effective 1st April 2010, work permits costs range from USD721 for a one-year permit to USD5,150 for a five-year permit. The new ten-year permit costs USD20,000. The ten-year permit was announced during a speech to the Bermuda Chamber of Commerce by Minister for Economy, Trade and Industry, Kim Wilson in late April 2011.
Foreigners are more or less unable to buy land or property, other than houses with a high Annual Rental Value (ARV). The Bermuda Immigration and Protection (Minimum Annual Rental Values) Regulations 2012 set the minimum ARV at USD177,000 (USD153,000 prior to 2012). Foreigners may also hold or acquire designated condominium units with an ARV of USD32,400.
In 2007, new legislation attempted to tighten up and clarify restrictions on the ownership of land and property by 'restricted persons,' in other words non-permanent residents of Bermuda and exempted corporations.
Rentals and leases of property from Bermudians have been possible, with permission from the Minister of Labour and Home Affairs, normally given only if the owner is leaving the island (with the idea of preventing speculative property development). Exempt companies have been able to finance and lease newly-constructed houses subject to certain conditions.
Purchase of properties by non-Bermudians requires a license from the Minister, and payment of a fee of 25% (at the time of writing) of the value of the property.
In June 2007, the Bermuda Immigration and Protection Amendment Act 2007 and seven related Regulations came into force. The commencement of this Act and the Regulations represent the first complete overhaul and modernization of Part VI of the Bermuda Immigration and Protection Act 1956 since the Act came into effect.
It marks the culmination of the legislative process through which this Part was amended to bring into law what was the Government’s land policy and, in particular, to address the problem of “fronting”, by which means non-Bermudians have gained control over land in Bermuda either while avoiding the licensing regime or in defiance of the Government’s land-holding policy. Additionally, the Regulations ensconce in law certain administrative rules supporting Part VI of the 1956 Act.
NB: This is a very abbreviated summary of the complex rules governing property purchase or rental in Bermuda.