Setting Up an Offshore Company in Bermuda or Another Caribbean Tax Haven: Which to Choose in 2026?

Published on August 16, 2026 and written by Cyril Jarnias

Setting up an offshore structure in the Caribbean has never been this technical. Between the introduction of a corporate income tax in Bermuda for certain groups, the tightening of economic substance rules, new beneficial ownership registers, and pressure from the FATF and the OECD, the simple reflex of “zero tax, zero paperwork” no longer holds.

Good to know:

In 2026, choosing an offshore company no longer depends only on the level of taxation, but on the territory’s ability to offer solid banking services, regulatory compliance, and credibility with partners. Comparing Bermuda to other Caribbean tax havens requires weighing cost, regulation, and reputation.

A New Caribbean Tax and Regulatory Landscape

In recent years, the region has had to adapt to a double shock: international transparency standards (CRS, FATCA, beneficial ownership registers) and the OECD’s BEPS plan, supplemented by Pillar Two and its global minimum tax of 15% for large groups.

Example:

Bermuda perfectly illustrates this new reality. Historically, the territory presented itself as entirely “tax neutral”: no income tax, no corporate tax, no capital gains tax, and no VAT. This image remains true for the majority of companies, but it is now more nuanced.

In December 2023, Bermuda adopted a Corporate Income Tax Act introducing a 15% corporate income tax for Bermuda entities belonging to a multinational group with consolidated revenue exceeding €750 million. This is a domestic application of the OECD’s Pillar Two, which aligns the territory with the GloBE rules and keeps the archipelago in the good graces of international bodies.

Caution:

Bermuda imposes a strict economic substance regime on companies conducting relevant activities (banking, insurance, fund management, financing/leasing, headquarters, shipping, distribution, services, intellectual property, holding entities). Core income-generating activities (CIGAs) must be performed locally, with premises, qualified employees, and sufficient expenditures on the territory.

The trend is not isolated: in many Caribbean tax havens, IBCs now must demonstrate minimum substance, often with local directors and annual compliance monitoring. The message is clear: the era of the dormant empty shell is over.

Bermuda: A Premium Jurisdiction, Not a Generic “No Tax” Haven

For an entrepreneur considering creating an offshore company in Bermuda or in another Caribbean tax haven—what to choose in 2026?—it’s important to understand that Bermuda is positioned in a high-end segment.

The archipelago is a common law territory with a solid legal framework, a first-tier financial regulator (the Bermuda Monetary Authority, BMA), and a tradition of hosting large groups, particularly in insurance and reinsurance. The OECD regularly confirms that the country complies with transparency standards and rules against harmful tax practices.

Bermuda Taxation: Zero for Most, 15% for the Giants

The new corporate income tax only applies to companies that are part of a multinational group exceeding €750 million in revenue. For these groups, the rate is 15% on the net taxable income of the “BCE Group”, that is, an aggregate of Bermuda entities belonging to the group. The arrangements are designed to align with Pillar Two: installment payments, true-up adjustments, and centralized filing.

Tip:

For other companies, the tax situation remains unchanged: no profit tax, no withholding tax on dividends, interest, or royalties, and no taxation of capital gains, wealth, or inheritances. Direct tax pressure comes mainly from payroll tax, social security contributions, and property tax.

In other words, an international SME or a family office that does not fall within the radar of large groups continues to benefit from a 0% corporate tax environment, while enjoying the international recognition of the jurisdiction.

Economic Substance: A Real Concern in Bermuda

Bermuda established an Economic Substance Act in 2019, along with associated regulations that are regularly updated. Entities conducting a relevant activity must prove that they are genuinely “managed and directed” from the archipelago, that their CIGAs are carried out there, that they have adequate premises and employees, and that they incur expenses consistent with their level of activity.

The criteria are detailed: board meetings held in Bermuda, minutes kept locally, properly mandated resident representatives, traceable contracts and financial flows, and documented justification of local expenses. Substance declarations must be filed annually through an electronic portal, within a set deadline from the closing of the accounts.

500

Maximum daily fine, in dollars, imposed by the CIT Agency for late filing or non-cooperation.

The consequence for an entrepreneur is clear: a Bermuda company can no longer remain purely “paper”. Even if the setup cost remains reasonable for a small holding vehicle or a holding company, you need to budget for operating costs and a minimum organization to avoid being seen as an artificial arrangement.

Transparency and Beneficial Ownership

On the transparency front, Bermuda crossed a threshold in 2025 with a specific Beneficial Ownership Act that consolidates all beneficial ownership obligations into a single text. The act requires almost all legal entities (companies, LLCs, partnerships) to identify individuals holding or controlling at least 25% of voting rights, capital, or interests, or exercising effective control by other means.

The identified individuals must provide detailed information (identity, address, nature and extent of control) and companies must maintain an up-to-date internal register, while submitting the data to the central register managed by the Registrar of Companies. This register is not open to the public, but it is accessible to certain authorities and “persons” defined by law (regulatory bodies, entities subject to anti-money laundering regulations, etc.). A proposal to expand access for individuals with a “legitimate interest” is in the process of being finalized.

Good to know:

For a project owner, absolute anonymity is no longer possible: banks and service providers will have access to the identity of beneficial owners, and local authorities will be able to share this data during international information exchanges.

Governance and Compliance: A Dense but Predictable Framework

There is no single governance code in Bermuda, but the Companies Act 1981, the BSX stock exchange regulations (for listed companies), and a range of sector codes govern the obligations of directors and officers.

Financial entities, for their part, are under the BMA, which has tightened its requirements regarding “fitness and propriety”, oversight of control functions, and director liability. Directors can now be subject to individual sanctions for serious misconduct.

Added to this are other regulatory blocks:

– a detailed substance regime, with annual filings through the BOSS system and electronic portals;

– a Data Protection Act (PIPA) in force since early 2025, requiring the designation of a “privacy officer”, the adoption of internal policies, and a risk analysis related to personal data;

– anti-money laundering and counter-terrorism financing obligations embedded in sectoral regulations and the POCA Regulations.

For some investors, this complexity is a deterrent; for others, it is a sign of credibility that facilitates fundraising and banking acceptance.

Anguilla, Bahamas, BVI, Cayman, St. Lucia… Very Different Profiles

Compared with the premium jurisdiction that Bermuda represents, the other Caribbean tax havens offer models more focused on speed of incorporation, lower cost, or a more unequivocally 0% tax regime.

Anguilla: Neutral Taxation, Moderate Costs, Targeted Substance

Anguilla is one of the most telling examples of a “tax neutral” jurisdiction in 2026. The territory imposes no corporate income tax, no income tax, no withholding tax on dividends, interest, or royalties, and no capital gains tax. For a classic offshore structure (holding company, international services, asset holding), local tax pressure is therefore zero.

200

Government incorporation and annual renewal fees for an LLC, a Business Company, or an IBC are approximately $200 each.

To get a quick idea of costs, they can be summarized as follows:

Optional services can be added: nominee directors or shareholders (often between $500 and $1,000 per year each), banking assistance, apostilles, etc. More comprehensive packages—including banking support, drafting of operating agreements, or even “turnkey” solutions with a crypto account—can run into several thousand dollars.

On the regulatory side, Anguilla has also adopted an economic substance regime. For companies conducting a relevant activity (within the meaning of international recommendations), it is necessary to demonstrate that CIGAs take place locally, that expenditures are incurred locally, and that strategic decisions are made in Anguilla. Board meetings must be held there at an appropriate frequency, and co-working spaces can be used as long as they remain consistent with the activity.

Good to know:

Compliance relies on a beneficial ownership register and registered agents subject to strict KYC policies: certified passport, recent proof of address, professional references, source of wealth and funds, CV, and incorporation documents for corporate shareholders. For sensitive profiles (high-risk countries, crypto, precious metals), enhanced due diligence is required.

Other Caribbean Tax Havens: Three Comparison Criteria

When considering creating an offshore company in Bermuda or in another Caribbean tax haven—what to choose in 2026?—you need to reason around several paradigms.

First, taxation. The table below summarizes the situation of several major Caribbean jurisdictions regarding corporate income tax in the context of Pillar Two:

* 0% for most companies, 15% for multinationals exceeding €750 million in annual revenue.

Good to know:

Most serious jurisdictions (Cayman, BVI, Bahamas, Anguilla, Bermuda) impose a substance test with an annual filing (activity, local employees, expenditures, premises, key functions). Small passive holding companies are classified as “pure equity holding entities” with minimal requirements (registered office, governance, records), while active structures must prove a real presence.

Finally, transparency and reputational risk. The region lives under combined pressure:

– FATF evaluations (grey list, blacklist);

– the European list of non-cooperative jurisdictions (the Turks and Caicos Islands, for example, were added in 2026, while Anguilla remains under monitoring in Annex II);

– indices such as the Corporate Tax Haven Index or Financial Secrecy Index, which rank the BVI and the Cayman Islands as “high-risk hubs” in terms of financial secrecy.

A recent study of more than 500 multinationals showed that a visible presence in certain highly stigmatized jurisdictions has a stronger impact on reputation than in others, especially when these countries are perceived as corrupt or not very transparent. For a listed group or a regulated fintech, using a territory deemed “toxic” by regulators and NGOs can complicate access to correspondent banks, increase the cost of capital, and add to due diligence requirements.

Setup Costs: Bermuda Versus Competitors

In terms of costs, Bermuda is well above the regional average for incorporating a classic offshore company.

7,000 to 10,000

Cost in dollars for the first year of a complete incorporation package for an exempted company in Bermuda, including BMA approval, registration, and basic corporate services.

For comparison, some offshore service providers charge:

* Estimates based on provider rate cards, including government fees, agent, registered office, and basic formalities.

These figures should be viewed with caution, as they do not cover bookkeeping, nominee services, banking assistance, or any sector-specific licenses. But the cost hierarchy is clear: Bermuda plays in a different price category than Anguilla, Belize, or the Bahamas.

Banking Security, Compliance, and Market Access

In 2026, the ease of opening a bank account for an offshore structure depends less on the local corporate tax rate than on the overall perception of the territory on three fronts: AML/CTF compliance, tax transparency, and geopolitical risk.

In this game, Bermuda benefits from its image as an “institutional” financial center, highly regulated, with a recognized regulator and full adherence to OECD/FATF standards. Banks—whether local or foreign—generally look favorably on Bermuda structures, provided the KYC file is solid.

Caution:

Territories on the European blacklist or the Financial Secrecy Index face growing difficulties, such as multiplied documentation requests, longer account opening delays, or systematic refusals from international banks. The EU specifies that inclusion may restrict access to certain funds, strengthen controls on flows, and impose defensive measures.

Anguilla illustrates an intermediate case: although tax neutral and under EU monitoring, the territory has strengthened its AML rules, implemented CRS 2.0 and a beneficial ownership register, and aligns with the directives of its Financial Services Commission. For a properly documented company, banks remain open to the file, but will generally require an EDD package (Enhanced Due Diligence): proof of real commercial activity, clear group structure, and justification for incorporating in Anguilla rather than in the beneficial owners’ country of residence.

How to Choose: Bermuda or Another Caribbean Tax Haven?

To answer the question Create an offshore company in Bermuda or in another Caribbean tax haven: what to choose in 2026?, you need to consider at least four dimensions: the size and nature of the group, the risk profile accepted, the budget, and the intended use of the structure.

1. Group Profile: Multinational or International Entrepreneur?

If you run a group whose consolidated revenue approaches or exceeds €750 million, the Pillar Two logic applies anyway. Whether you choose Bermuda, the Bahamas, the Cayman Islands, or another territory that has implemented a QDMTT, the effective 15% tax will be due somewhere. In this case, the choice of jurisdiction is more about:

– the quality of the regulator;

– the depth of the market (insurance, funds, capital markets);

– legal and political stability;

– the ability to engage with the OECD, the EU, and the authorities in your home country.

Good to know:

Bermuda presents strong arguments for the insurance/reinsurance sectors, institutional vehicles, and listed structures, depending on the criteria considered.

For an individual entrepreneur, an international SME, a startup, or a family office, the €750 million threshold makes Bermuda corporate tax practically nonexistent. You therefore benefit from traditional tax neutrality, with the comparative advantage of a jurisdiction well regarded by regulators, at the cost of additional administrative and financial overhead compared with lower-cost territories such as Anguilla or Belize.

2. Appetite for Reputational Risk

Recent analyses show that the “brand” of the offshore territory now plays a role in the overall assessment of a group’s reputation. Using a place considered highly opaque or politically contested has a cost: heavier due diligence, probing questions from institutional partners, or even a discount in valuations.

Example:

Bermuda, having adopted Pillar Two, centralized beneficial ownership registers, and AML standards aligned with best practices, enjoys a “reputation premium”: a Bermuda structure rarely causes tension during an investor roadshow, unlike a holding company located in a state recently blacklisted by the EU.

For a highly visible project — IPO, institutional debt issuance, partnerships with top-tier banks — this dimension should not be underestimated.

3. Budget and Acceptable Level of Complexity

A Bermuda company is more expensive to incorporate and maintain and more burdensome to manage daily than an IBC in a small Caribbean territory. You have to contend with:

– high incorporation fees;

– recurring fees for the resident representative, registered office, and compliance support;

– substance and beneficial ownership filings, and, where applicable, specific obligations related to the activity (insurance, funds, etc.).

Good to know:

For a modest holding structure (international real estate portfolio) or an online services company without regulatory exposure, a less expensive and simpler territory is rational. This implies accepting increased compliance vigilance: KYC/AML, minimum substance, and CRS.

4. Economic Substance: Are You Ready to Have a “Real” Presence in the Jurisdiction?

Economic substance is the common thread of the decade. In Bermuda, as in other serious offshore centers, the authorities have an obsession: avoiding being perceived as harboring profits without real activity. In Bermuda’s case, this translates into clear requirements: local board meetings, strategic decisions made locally, an informed representative present, and expenditures consistent with revenues.

Anguilla, the Cayman Islands, BVI, or the Bahamas are following the same trajectory, even though the severity bar varies and “pure holding” regimes retain lighter requirements.

The question to ask yourself is therefore: am I ready to organize a real presence (even a limited one) in the chosen jurisdiction? If the answer is no, you will need to consider other architectures (companies in more traditional countries with attractive tax regimes, use of participation exemption regimes, etc.) while potentially accepting a little more formal tax.

Bermuda or Another Caribbean Tax Haven in 2026: The Final Equation

In 2026, the question of creating an offshore company in Bermuda or in another Caribbean tax haven—what to choose in 2026?—no longer has a binary answer. Bermuda is neither the cheapest “all-terrain” option, nor necessarily the most aggressive tax tool; it is, however, one of the most credible, structured, and politically acceptable environments for hosting high-value-added international activities.

Good to know:

Caribbean tax havens (Anguilla, Bahamas, BVI, Cayman, St. Lucia, Antigua, Grenada) still attract entrepreneurs thanks to their fast incorporation, low costs, and 0% taxation without Pillar Two for small structures, but they remain constrained by substance requirements, beneficial ownership registers, CRS 2.0, crypto regulations, as well as pressure from the EU and the FATF.

The right choice will therefore depend less on a race to the corporate tax rate and more on your business model, your time horizon, your exposure to capital markets, and your tolerance for regulatory risk. In other words, successful optimization in 2026 is no longer the one that merely promises “zero tax”, but the one that finds a sustainable balance between tax neutrality, legal security, and international acceptability.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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