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 500,000
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 2010 was over USD5.85 billion, giving
a GDP per head of more than USD91,477. Gross
National Income per Capita in 2010 was USD89,935
and expected to exceed USD99,000 in 2011.
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.
By
the end of 2009, there were 13,539 external
companies, 1,250 exempted parternships, 588
overseas companies, 68 overseas partnerships,
15 non-resident insurance companies and 3,166
local companies on the register.
The
Bermuda Stock Exchange was opened in 1973.
As at 31 December 2010, 807 issuers were listed
on the BSX. Included in the new listings in
2010 was the Variable Note program of Lodestone
Re. The Exchange also listed 124 international
derivative warrants. There were also 55 new
collective investment vehicles listed, and
7 subsequent issues processed during the year.
The
BSX was not immune to the general problems
of stock exchanges in 2008. The Bermuda market
followed the trend by falling 30% in value
as reflected by the BSX/RG Composite Index,
which ended the year at 3417.00, a change
of 1,553 points in total. Offsetting this
decline was a market dividend yield of over
5%, which resulted in a net return of negative
25%. Domestic trading volumes increased from
5.3 million shares to 6.8 million with a corresponding
value of over BMD99m.
The
total market capitalization of the BSX on
December 31, 2008 (excluding fund listings)
stood at over USD226bn of which approximately
USD1.9bn represented the domestic market.
By
the end of December, 2010, total market capitalization
of the BSX (excluding fund listings) stood
at over USD319bn of which approximately USD1.4bn
represented the domestic market. Total trading
volume for the year was 64m shares with a
corresponding value of US$112m.