Bermuda
Trust Management
The
Trust Companies Act 1991 and
the Trusts
(Regulation of Trust Business) Act
2001 established
a regulatory regime for trust management
companies in Bermuda. Excluded from
the regime is any individual, partnership
or company acting as the trustee of
a specific trust or group of trusts;
in the case of a company the word
'private' or 'pvt' must be included
in its name.
Trust
Companies (or indeed partnerships)
offering their services more widely
need a license from the Finance Ministry,
which delegates the issue of licences
to the Bermuda Monetary Authority
(BMA). Certain minimum requirements
must be met before a license is issued:
- Minimum
paid-up capital of $250,000;
- Adequate
insurance;
- Adequate
premises and appropriately skilled
staff.
An
application includes details of beneficial
ownership, personnel, business plan
etc. A licensed company is subject
to reporting and other requirements
under the Bermuda Monetary Authority
Act 1969. It is also subject to Codes
of Conduct covering 'know your customer'
rules, defences against money laundering
and other criminal activities. The
annual licensing fee payable to the
BMA is USD10,000.
A private trust company, that is,
one formed to act as trustee of a
limited number of trusts for the benefit
of members of the same family or connected
with a particular commercial transaction,
is exempt from the licensing regime.
The BMA requires the same background
information relating to the identities
of the owners of the private trust
company as for the incorporation of
any other company in Bermuda, but
once incorporated there is no obligation
on a Bermuda private trust company
to file financial statements or written
reports with any regulatory body in
Bermuda regarding either itself or
any
trusts it acts as trustee of.
When assets of significant value are
placed in trust, the running costs
of a private trust company will often
be significantly lower than those
of a public, licensed trust management
company. In addition, professional
trust managers are becoming twitchy
about liability issues and may be
reluctant to take on trust management
of some types of business and asset.
This problem is largely avoided in
a private trust company.
There
were 33 licensed trust companies in
Bermuda in 2007, some of them operating
as exempt companies.
The
two key associations in Bermuda for
trust management companies are The
Society Of Trusts and Estate Practitioners
(STEP, Bermuda Branch), and the Bermuda
International Business Association
(BIBA).For a listing of trust management
firms in Bermuda, see the Lowtax
Bermuda Services Directory.
