LOWTAX.NET
CONTACT | ABOUT | LEGAL | LINKS     
   NETWORK SITES:
   LOWTAX   
   TAX-NEWS   

Jurisdiction Home Pages

Andorra
Anguilla
Aruba
Australia
Austria
Bahamas
Barbados
Belgium
Belize
Bermuda
Botswana
British Virgin Islands
Brunei
Canada
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Denmark
Dubai
France
Germany
Gibraltar
Greece
Grenada
Guernsey
Hong Kong
Ireland
Isle of Man
Jersey
Labuan
Latvia
Liberia

Liechtenstein
Luxembourg
Madeira
Malaysia
Malta
Marshall Islands
Mauritius
Monaco
The Netherlands
The Netherlands Antilles
Nevis
Panama
Portugal
Russia
Seychelles
Singapore
South Africa
Spain
St. Kitts
St. Vincent and the Grenadines
Switzerland
Turks & Caicos Islands
USA
UK
Vanuatu

Newsletter

To receive monthly updates on new features in lowtax.net and tax-news.com just enter your e-mail address below:

Daily Tax Quote

The Network

3,000 free pages of accurate, timely information

Tax-News.com


Daily, updated news about tax and offshore from our team of 20 international journalists

Lowtax.net

'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail

Investors offshore.com


Global information and advice for expatriates and international investors

Offshore-e-com.com

A topical guide to offshore e-commerce focused on tax and regulation

LawAndTax-News.com


Daily news and background data on tax and legal developments for international business

>
LOWTAX OFFSHORE

BERMUDA: THE ECONOMY


<

BACK TO BERMUDA INFORMATION: BUSINESS, TAXATION AND OFFSHORE

In this Section:


The Economy of Bermuda

The unit of currency is the Bermuda dollar (referred to here as BMD) which has parity against the US dollar; the US dollar is also accepted. Under the Exchange Control Act 1972 and the Exchange Control Regulations 1973, certain exchange controls apply to Bermudian citizens and to 'local' companies. There are no capital or exchange controls applying to non-residents or to the various forms of offshore entity (exempt or permit companies or partnerships) which are free to import and export funds in all currencies. There are no taxes that apply to such transfers, and there is no withholding tax on interest, dividend or royalty payments.

The Bermudan economy has been highly successful, with tourism and international business being the two main sources of revenue. Over 400,000 tourists visit the island annually, mostly from North America. There is a minor industrial sector and agriculture is minimal because of the lack of suitable land for crops. Consequently about 80% of Bermuda's food needs are imported.

Bermuda's GDP in 2004 was over USD4.5 billion, giving a GDP per head of more than USD69,900. GDP growth in 2004 rose to 4.6%.

Unemployment was 2.1% in 2004, and inflation in November 2005 was 2.8%; an average house at the time of writing cost almost $1m.

In October, 2005, Standard & Poor's Ratings Services affirmed its 'AA' long-term and 'A-1+' short-term sovereign credit ratings on Bermuda, reflecting the country's record of prudent economic management. The outlook on the ratings remains stable.

"Bermuda benefits from many years of good economic management, based upon policies consistent with its fixed exchange rate," observed Standard & Poor's credit analyst Lisa M. Schineller.

"The fixed exchange rate, favorable macroeconomic policy mix, and well regarded tax and regulatory regimes will continue to attract the international business sector — particularly insurance — thus ensuring its continuance as the main engine of economic growth in Bermuda," she added.

According to Ms. Schineller, the government has the fiscal and external flexibility to absorb a budgeted expansion in spending.

"As a net general government creditor, Bermuda can afford to increase spending in a cautious and prudent manner," she explained.

S&P said that Bermuda remains a global leader in the reinsurance segment and this has helped offset a secular decline in tourism.

"Sound policy and a favorable, stable investment climate are expected to support growth despite increased discussion about establishing independence from the UK," noted Ms. Schineller.

"The politically controversial debate that has already begun is expected to intensify in the run-up to the next general election due by 2008," she concluded.

The effects of 11 September 2001 have had both positive and negative ramifications for Bermuda. On the positive side, a number of new reinsurance companies have located on the island, contributing to the expansion of an already robust international business sector. On the negative side, Bermuda's tourism industry - which derives over 80% of its visitors from the US - was severely hit as American tourists chose not to travel, although it has rebounded somewhat in recent years.

The development of Bermuda's thriving financial sector began in the 1950's. The Government's selective attitude to incoming business, and particularly its - until recently - exclusion of foreign banks, created and maintains an excellent reputation for the island. A wide variety of financial services are represented, with the captive insurance sector being the world leader; fund and trust management are also prominent. Supervision of the financial sector is in the hands of the Bermuda Monetary Authority, an independent agency which inherited regulatory and supervisory powers from the Government under The Banks And Deposit Companies Act 1999, which was implemented in 2000.

Figures released by the government of Bermuda showed that the number of business incorporations on the island continued to increase during the first nine months of 2005, albeit at a slower pace than seen during the previous year. According to the government's Bulletin of Statistics, a total of 1,001 new incorporations were registered during the first three quarters of 2005. This compared to a figure of 1,020 incorporations during the same period in 2004.

The new incorporations during 2005 meant that the total number of firms registered in Bermuda stood at 16,808 as at September 30, an increase of 413 since the end of the third quarter of 2004.

While local company registrations were up 2.2% year-on-year at the end of the third quarter 2005, exempted company formations were down by 5.3% over the year to the end of September.

However, exempted companies continued to make up the largest proportion of registered Bermudan companies, totalling 12,517 at the end of September of that year. Meanwhile, there were 3,045 local companies, 632 exempted partnerships, 592 non-resident entities, and 20 non-resident insurance companies registered at the end of the third quarter.

By the end of 2007, there were 13,688 external companies, 841 exempted parternships, 486 overseas companies, 68 overseas parternships, 20 non-resident insurance companies and 3,376 local companies on the register.

The Bermuda Stock Exchange was opened in 1973. The total market capitalization of the BSX as at 31 December 2007 (excluding fund listings) stood at over $350 billion of which approximately BMD2.7 billion represented the domestic market.

As at 31 December 2007, 543 issuers were listed on the BSX, 115 more than at the same stage in 2006. Some quite sophisticated international e-broking services are developing around the Exchange.

 

 

 

<

BACK TO BERMUDA INFORMATION: BUSINESS, TAXATION AND OFFSHORE

THE LOWTAX LIBRARY

One of the web's largest and most authoritative business and investment information sources. Alongside topical, daily news on worldwide tax developments, you can receive weekly newswires or access up-to-date intelligence reports on a range of legal, tax and investment subjects.

FREE TRIAL NEWS SUBSCRIPTION

Our 16 constantly updated intelligence reports cover every important aspect of 'offshore' and international tax-planning in depth, including banking secrecy, the EU's savings tax directive, offshore funds, e-commerce, offshore gaming and transfer pricing. Reports are available for immediate downloading or as subscription services with news pages.

Advertising & Marketing

With over 50,000 qualified readers every month our web-sites offer a number of cost effective, targeted advertising, sponsorship and marketing opportunities:

Display advertising - from 'skyscrapers' to 'buttons'
Content/article submission and sponsorship
Opt-in email marketing
On-line Services Directory listings

Click here to learn more or contact Peter Wiggins on +44 1424 425933 or email him at peter@lowtax.net

News & Content Solutions

Could your corporate web-site or newsletter benefit from incorporating regularly updated news and content tailored to serve your clients' interests? We can provide a variety of maintenance-free news and content solutions that can be seamlessly integrated and dynamically delivered:

Customised, personalised 'own-brand' news services
Newsletter content and management
News Headlines Tickers

Click here to learn more or contact Peter Wiggins on +44 1424 425933 or email him at peter@lowtax.net

IMPORTANT NOTICE: LOWTAX.NET has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments. All materials on this site copyright LOWTAX.NET 1999 to 2008. Contact us for further information.