Bermuda: Law of Offshore
Bermudian trusts are governed by The Trustee Act 1975 which is largely based on the English Trustee Act 1925. The Trusts (Special Provisions) Act 1989, another significant statute, introduced the concept of the "purpose trust" and brought Bermudian law still closer to English law. The Perpetuities and Accumulations Act 1989 increased the perpetuity period to 100 years. Foreign inheritance laws are specifically excluded, and there is provision for the non-recognition of foreign judgements. Bermuda has adopted the Hague Convention; the Trusts (Special Provisions) Act 1989 made some consequent adjustments to the law. Appeal is to the English Privy Council.
The legislation allows for the appointment of a Protector, who can be given power to replace trustee(s), add or remove beneficiaries, and transfer the trust to another jurisdiction.
In general, trustees need not be resident in Bermuda; but one must be. A Bermudian trustee is subject to the jurisdiction of the Supreme Court of Bermuda.
The trust fund may comprise cash, land, securities, interests in property or other trusts. Non resident trusts are not permitted to hold Bermuda currency, shares or security in local companies, or an interest in land in Bermuda without the prior consent of the Bermuda Monetary Authority.
Bermuda trusts need not be registered, and following the Stamp Duty Amendment Act 1993 the only Bermuda trusts still subject to stamp duty are those established by residents in favour of their families.
The Trust Companies Act 1991 provided for the licensing and regulation of trust formation and management companies; private individuals or partnerships managing one or a group of named trusts do not need to register under the Act. The Trusts (Regulation of Trust Business) Act 2001 also helped to establish a new regulatory regime for trust management companies in Bermuda.
Bermuda, like many other offshore jurisdictions, tightened up its regulatory regime in response to pressure from the OECD and FATF. As part of this, the government passed the Trusts (Regulation of Trust Business) Act 2001.
Much of the Act is based on the recommendations made by the November 2000 KPMG report on financial services regulation in the Overseas Territories, which was commissioned by the UK government.