Corporate Taxation in Bermuda

Published on October 2, 2025 and written by Cyril Jarnias

Bermuda, a British archipelago in the Atlantic Ocean, has long been known as an attractive tax haven for international businesses. However, recent changes in Bermudian tax legislation are gradually reshaping this landscape. Let’s examine in detail the current tax regime for businesses in Bermuda, its benefits, and new obligations.

A Tax Regime in Transition: The Introduction of Corporate Tax

Historically, Bermuda levied no tax on corporate profits, making it a favored destination for tax optimization. However, this situation is changing significantly starting in 2025.

The Bermudian government has announced the introduction of a Corporate Income Tax (CIT) that will take effect in January 2025. This measure aims to align Bermuda with international tax standards, particularly the global minimum tax initiative.

The new CIT will apply only to businesses that are part of multinational groups with annual revenue reaching or exceeding €750 million. The tax rate has been set at 15%, in line with the minimum rate under the OECD’s Pillar Two[2].

It is important to note that this new tax does not affect all businesses in Bermuda. Local companies and smaller international businesses will continue to benefit from a very favorable tax environment.

A Still Attractive Tax Ecosystem: Other Taxes and Benefits

Despite the introduction of CIT for large multinationals, Bermuda retains many tax advantages for businesses:

• No personal income tax: Residents and company employees are not subject to income tax.
• No capital gains tax: Capital gains are not taxed in Bermuda.
• No dividend tax: Dividend distributions are not subject to tax.
• No withholding tax: Payments of interest, royalties, or dividends abroad are not taxed.

The main taxes that businesses may be subject to are:

• Financial services tax: Applicable to banks and financial institutions.
• Property tax: Mainly concerning commercial and tourist real estate.
• Customs duties: On certain imported goods.

The Bermudian government has also announced its intention to introduce specific tax credits to support the country’s economic objectives and maintain its overall attractiveness[2].

Registering in Bermuda: A Simplified Process for Businesses

Registering a business in Bermuda is a relatively simple and quick process, designed to attract foreign investors.

The main steps to create a company in Bermuda are as follows:

• Choose a business name and have it approved by the Registrar of Companies.
• Prepare the company’s articles of association (Memorandum of Association).
• Appoint directors and shareholders.
• Submit the necessary documents to the Registrar of Companies.
• Pay the registration fees.

Once these steps are completed, the company receives a certificate of incorporation, typically within 24 to 48 hours.

For tax matters, businesses must register with the Office of the Tax Commissioner. This step is particularly important for companies that will be subject to the new CIT starting in 2025.

It is recommended to engage a local lawyer or accountant to ensure all formalities are properly completed and the company complies with current regulations.

Tax Obligations: Transparency and Compliance at the Forefront

Although Bermuda’s tax regime remains advantageous, transparency and compliance obligations have strengthened in recent years.

The main tax obligations for businesses in Bermuda include:

• Maintaining accounting records: All businesses must keep accurate and up-to-date financial records.
• Annual returns: Companies must submit annual returns to the Registrar of Companies.
• Economic substance reports: Certain businesses must demonstrate substantial economic presence in Bermuda.
• CRS and FATCA reporting: Financial institutions are required to comply with international tax information exchange standards.

Starting in 2025, businesses subject to the new CIT will also need to prepare and submit annual tax returns. The exact procedures for these returns are still being developed by Bermudian authorities.

It is crucial for businesses to stay informed about regulatory developments and ensure they meet all their obligations. Non-compliance with rules can result in significant financial penalties and damage the company’s reputation.

Tax Information Exchange Agreements: An Expanding Network

Although Bermuda has not signed many bilateral tax treaties, the country has concluded several Tax Information Exchange Agreements (TIEAs) and actively participates in international tax transparency initiatives.

Bermuda has signed TIEAs with over 40 countries, including the United States, United Kingdom, France, Germany, and Canada. These agreements facilitate the exchange of tax information between competent authorities and help prevent tax evasion.

Additionally, Bermuda is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which significantly expands its network of international tax cooperation.

Although these agreements do not directly provide for the elimination of double taxation, they can help reduce tax risks for businesses operating in Bermuda and other jurisdictions. Businesses can benefit from greater tax certainty and better protection against international tax disputes.

It is important to note that the introduction of CIT in 2025 may encourage Bermuda to negotiate more bilateral tax treaties in the future, further strengthening the country’s attractiveness for international investors.

Comparison with Other Offshore Jurisdictions: Bermuda Facing Competition

In the landscape of offshore financial centers, Bermuda stands out in several aspects but also faces increased competition from other jurisdictions.

Bermuda’s advantages:

• Political and economic stability
• Strong regulatory framework respected internationally
• Sophisticated financial infrastructure
• Recognized expertise in insurance and reinsurance
• No personal income tax

Comparison with other jurisdictions:

• Cayman Islands: Also offer a favorable tax regime but face increased scrutiny regarding financial transparency.
• British Virgin Islands (BVI): Remain attractive for holding company formation, with generally lower setup and maintenance costs than Bermuda[4].
• Jersey: Offers a 0% corporate tax rate for most businesses, with exceptions for certain specific sectors[1].
• Singapore: Provides a competitive tax environment and strategic position in Asia, but with higher tax rates than Bermuda.

The introduction of CIT in Bermuda may slightly reduce the tax gap with some of these jurisdictions for large multinationals. However, Bermuda retains many strengths, including its established reputation, robust regulatory framework, and expertise in specific sectors like insurance.

Conclusion: Bermuda, An Evolving Tax Haven

Bermuda is undergoing a significant tax transition with the introduction of CIT in 2025. However, this evolution is part of a broader strategy to maintain the country’s attractiveness while complying with international standards.

For businesses considering establishing in Bermuda, it is crucial to:

• Carefully assess their tax situation in light of new regulations
• Consider the non-tax benefits offered by Bermuda, such as political stability and sectoral expertise
• Stay informed about upcoming regulatory developments
• Consult international tax experts to optimize their structure

Despite ongoing changes, Bermuda remains an attractive jurisdiction for many businesses, particularly those operating in insurance, reinsurance, and financial services sectors.