Forming a Company in Bermuda: A Practical Guide

Published on September 29, 2025 and written by Cyril Jarnias

Bermuda, this idyllic archipelago nestled in the heart of the North Atlantic, is more than just its pink sand beaches and crystal-clear waters. This British Overseas Territory has built a solid reputation as a premier international financial center. With its sophisticated regulatory framework, political stability, and advantageous tax regime, Bermuda has long attracted entrepreneurs and investors from around the world. In 2025, despite some recent adjustments, the archipelago remains a top destination for offshore company formation. Let’s delve into the intricacies of this business paradise and discover why and how to establish your company there.

Why Bermuda is a Dream for Entrepreneurs

Bermuda is not just a tourist destination. It offers a sophisticated business environment that attracts entrepreneurs worldwide. Here’s why:

A haven of economic and political stability: Bermuda enjoys remarkable political stability, reinforced by a legal system based on English common law. This stability, coupled with a robust economy, provides fertile ground for long-term investments.

Attractive taxation (with some nuances): Traditionally, Bermuda was known for its complete absence of corporate income tax. While this remains true for most businesses, it should be noted that starting in 2025, a 15% tax applies to multinational companies with annual revenue exceeding €750 million. Despite this change, Bermuda’s tax regime remains extremely competitive globally.

A center of excellence for certain sectors: Bermuda has established itself as a global hub for insurance and reinsurance. The archipelago also hosts a thriving ecosystem for fintechs and companies specializing in digital assets, thanks to a forward-thinking regulatory framework.

A reputation for international compliance: Unlike some tax havens with questionable reputations, Bermuda has worked hard to comply with international standards for financial transparency and anti-money laundering. This responsible approach reassures investors concerned about their image.

The Legal Structures That Make a Difference

When it comes to creating a company in Bermuda, several options are available. Each has its advantages and specificities. Here’s an overview of the main legal structures available:

The Limited Company (Ltd): This is the Bermudian equivalent of a limited liability company. It offers great flexibility and personal protection to shareholders. It’s the most common form for international businesses establishing in Bermuda.

The Exempted Company: Particularly attractive to foreign investors, this structure is designed for businesses primarily operating outside Bermuda. It benefits from additional tax advantages and greater confidentiality.

The Limited Liability Company (LLC): Introduced more recently, the Bermudian LLC combines the flexibility of a partnership with the protection of a limited liability company. It is particularly popular with investment funds and technology companies.

The Limited Partnership: Ideal for investment funds, this structure offers great flexibility in the distribution of profits and losses among partners.

The Segregated Accounts Company (SAC): This unique structure allows for the creation of separate accounts within the same legal entity, each with its own assets and liabilities. It is particularly valued in the insurance sector.

Each structure has its own requirements in terms of minimum capital, governance, and reporting. It is crucial to choose the one that best matches your business objectives and long-term strategy.

Taxation in Bermuda: A Major Asset (with Some Nuances)

Bermuda’s advantageous taxation has long been one of its main attractions for international entrepreneurs. Although recent changes have slightly altered the landscape, the archipelago remains a tax-attractive destination. Here’s what you need to know:

Corporate tax: Almost zero, but not for everyone: Traditionally, Bermuda applied no tax on corporate profits. This remains true for the vast majority of businesses. However, starting in 2025, a new rule applies: multinationals with annual revenue exceeding €750 million are now subject to a 15% tax on their profits. This measure aims to align Bermuda with global initiatives to combat tax evasion.

No personal income tax: Residents of Bermuda, whether local or expatriates, do not pay income tax. This is a significant advantage for attracting international talent.

No capital gains tax: Capital gains are not taxed in Bermuda, making it a privileged location for long-term investments.

No VAT or sales tax: The absence of these indirect taxes greatly simplifies business operations and reduces costs for businesses and consumers.

Moderate customs duties: Although there is no VAT, Bermuda applies customs duties on imports. These duties generally range from 0% to 25%, with an average of about 25%.

Payroll tax: Employers in Bermuda are subject to a payroll tax. The rate varies depending on the total amount of wages paid and the company’s industry sector.

It is important to note that, although taxation in Bermuda is generally advantageous, companies must remain vigilant about tax implications in their home country. Many countries have implemented strict rules regarding offshore companies, and it is crucial to ensure compliance with international regulations.

Creating Your Company in Bermuda: A Simplified Process

Establishing a company in Bermuda may seem intimidating, but the process is actually relatively simple and fast. Here are the key steps to follow:

1. Choose a name for your company: Start by checking the availability of your desired name with the Registrar of Companies in Bermuda. The name must not be misleading or similar to that of an existing company.

2. Prepare the incorporation documents: You will need to draft the Memorandum of Association and the Articles of Association. These documents define the structure and operating rules of your company.

3. Appoint directors and a secretary: Your company must have at least one director and one secretary. The secretary can be an individual or a corporate entity, but at least one director must be an individual.

4. Choose a registered address: Your company must have an official address in Bermuda. This can be done through a local agent.

5. Obtain necessary approvals: Depending on your industry, you may need specific authorizations. For example, businesses in the financial sector must obtain approval from the Bermuda Monetary Authority (BMA).

6. Submit your application: Submit all required documents to the Registrar of Companies, along with the registration fees.

7. Obtain the certificate of incorporation: Once your application is approved, you will receive a certificate of incorporation, marking the official birth of your company.

8. Open a bank account: This step is crucial and can take time due to strict due diligence checks.

9. Ongoing compliance: Once established, your company must comply with various reporting and compliance obligations, including maintaining proper records and submitting annual returns.

It is highly recommended to engage a local lawyer or corporate formation agent to guide you through this process. Their expertise can prove invaluable in navigating the subtleties of local regulations.

Bermuda Facing Competition: How Does It Position Itself?

In the world of offshore jurisdictions, competition is fierce. Bermuda stands out in several aspects but also faces challenges. Here’s how it compares to other popular destinations:

• Political and economic stability superior to many competing jurisdictions
• Sophisticated regulatory framework, particularly attractive for insurance and fintech sectors
• Reputation for compliance with international standards, reducing reputational risks
• Absence of personal income tax, unlike some competing jurisdictions

• Cayman Islands: Offer similar tax advantages, but Bermuda has a better reputation for compliance
• British Virgin Islands: Faster company formation process, but less sophisticated regulatory framework than Bermuda
• Singapore: Larger financial center, but less advantageous taxation for certain structures
• Luxembourg: Attractive for investment funds, but more complex taxation than Bermuda

• Higher cost of living and business operations than in some competing jurisdictions
• Recent introduction of corporate tax for very large multinationals, which could reduce appeal for some large groups
• Growing international pressure on low-tax jurisdictions

Despite these challenges, Bermuda maintains a strong position thanks to its unique combination of tax advantages, stability, and sophisticated regulatory framework. Its ability to adapt to international standards while preserving its key assets allows it to remain a top destination for many international entrepreneurs and investors.

Social Obligations: A Balance Between Flexibility and Protection

Although Bermuda is known for its business-friendly environment, it has also implemented a system of social obligations aimed at protecting employees while maintaining some flexibility for employers. Here’s what you need to know:

Social security: Bermuda has a social security system called the “Contributory Pension Fund.” Both employers and employees must contribute. In 2025, the total contribution amounts to 10.25% of salary, shared equally between employer and employee.

Health insurance: Employers are required to provide health insurance to their employees. The cost is generally shared between employer and employee, with a minimum of 50% borne by the employer.

Paid leave: Bermudian law guarantees a minimum of 2 weeks of paid leave per year for full-time employees. This figure increases with seniority.

Working hours: The standard work week is 40 hours, with provisions for overtime.

Employment protection: Bermuda has strict laws against wrongful dismissal, offering significant protection to employees.

Work permits: For non-Bermudian employees, obtaining a work permit is necessary. The process can be complex, and employers must demonstrate that no qualified Bermudian was available for the position.

Training and development: Bermuda strongly encourages the development of local skills. Companies are encouraged to invest in training their Bermudian employees.

It is important to note that these obligations, while representing a cost for employers, contribute to social stability and Bermuda’s attractiveness as a workplace for international talent.

Opening a Corporate Bank Account: A Rigorous Process

Opening a corporate bank account in Bermuda is a crucial step that can prove complex. Bermudian banks, in accordance with international anti-money laundering and counter-terrorism financing standards, apply strict due diligence procedures. Here are the steps to follow:

1. Choose the right bank: The main banks in Bermuda include HSBC, Butterfield Bank, and Clarien Bank. Each has its specificities in terms of services offered and target clientele.

• Certificate of Incorporation of your company
• Company bylaws
• Proof of company address in Bermuda
• Identification and proof of address for all directors, significant shareholders, and authorized signatories
• Detailed business plan explaining the nature of your activity and the origin of funds
• Projected financial statements

3. Pass the bank interview: Most banks will require an in-person interview with a company representative. Be prepared to explain your activity and financial projections in detail.

4. Thorough checks: The bank will conduct extensive checks on your company and its key players. This process can take several weeks.

5. Approval and account opening: Once all checks are completed and if your application is approved, you can proceed with the actual account opening.

6. Initial deposit and activation: An initial minimum deposit is generally required to activate the account. The amount varies by bank.

It is important to note that the process can be lengthy and approval is not guaranteed. Bermudian banks are particularly vigilant regarding companies operating in sectors considered high-risk.

Future Sectors in Bermuda: Where to Invest?

Bermuda, although known for its thriving financial sector, is actively diversifying its economy. Here are the most promising sectors for entrepreneurs in 2025:

1. Insurance and Reinsurance: A traditional pillar of the Bermudian economy, this sector continues to innovate, particularly in parametric insurance and emerging risks related to climate change.

2. Fintech and Blockchain: Bermuda has established a forward-thinking regulatory framework for financial technology companies. The 2018 “Digital Asset Business Act” positioned the archipelago as a leader in the regulation of cryptocurrencies and digital assets.

3. Renewable Energy: With a strong commitment to sustainability, Bermuda offers growing opportunities in solar, offshore wind, and energy storage technologies.

4. Luxury Tourism and Ecotourism: The tourism sector is reinventing itself, focusing on high-end, environmentally friendly experiences.

5. International Professional Services: Demand for legal, accounting, and consulting services specialized in international operations remains strong.

6. Marine Biotechnology: Bermuda’s unique position as an ocean archipelago offers opportunities in research and development related to marine resources.

7. Information and Communication Technology (ICT): Investments in digital infrastructure have paved the way for a dynamic ICT sector, particularly in cloud services and cybersecurity.

These sectors often benefit from government incentives and a well-developed support ecosystem, including business incubators and mentorship programs.

Recruiting in Bermuda: Attracting and Retaining Talent

Recruiting in Bermuda presents both unique opportunities and specific challenges. Here’s how to navigate this process effectively:

Understand the local labor market: Bermuda has a highly skilled workforce, particularly in financial and legal sectors. However, the limited size of the population (approximately 64,000 inhabitants) can make recruiting for certain specialized positions difficult.

Priority to Bermudians: Local legislation requires employers to give priority to qualified Bermudian candidates. You will need to demonstrate that no local candidate was available or qualified before you can recruit internationally.

Work permit process: For non-Bermudian employees, obtaining a work permit is mandatory. The process can be lengthy (4 to 6 weeks on average) and costly. Permits are generally granted for a duration of 1 to 5 years.

• Collaborate with local recruitment agencies that understand the nuances of the Bermudian labor market
• Use popular online platforms in Bermuda, such as BermudaJOBS.com
• Participate in local job fairs and networking events
• Develop partnerships with local educational institutions for recruiting young talent

Attractive compensation packages: The cost of living in Bermuda is high. Offer competitive packages including not only salary but also benefits like health insurance, housing allowances, and relocation bonuses for expatriates.

Training and development: Invest in continuous training for your employees. This not only improves their skills but also increases their loyalty to the company.

Inclusive corporate culture: Create a work environment that values diversity and inclusion. This will help you attract and retain the best talent, whether local or international.