Mistakes to Avoid When Starting a Business in Bermuda

Published on October 2, 2025 and written by Cyril Jarnias

Bermuda, with its favorable tax regime and political stability, attracts numerous international entrepreneurs. However, starting a business in this island paradise requires meticulous preparation and deep knowledge of the local context. Here are the most common mistakes to avoid to maximize your chances of success in Bermuda.

Blurry Vision: The Danger of Rough Planning

Embarking on the entrepreneurial adventure in Bermuda without a clear strategy is a recipe for failure. Too many entrepreneurs underestimate the importance of a solid business plan, thinking that the archipelago’s tax appeal alone will guarantee their success.

Yet, Bermuda has its own challenges. The local market is limited, with a population of about 64,000. Your business will likely need to target international markets from the start. This involves complex logistics and additional costs that must be anticipated.

Moreover, certain sectors like insurance and reinsurance are already highly developed in Bermuda. In 2024, these industries represented over 70% of the archipelago’s GDP. If you’re targeting these fields, your business plan must demonstrate real added value to stand out.

Rigorous planning must include:

• A thorough market study, including an analysis of local and international competition
• Realistic financial projections for at least 3 years
• A marketing strategy adapted to the Bermudian and international context
• A detailed operational plan, taking into account local specifics (recruitment, logistics, etc.)

The Trap of Misleading Numbers: Risky Financial Management

The absence of corporate tax in Bermuda can give a false impression of financial ease. However, managing a company’s finances on the archipelago requires particular rigor.

First, the cost of living in Bermuda is among the highest in the world. In 2024, the cost of living index in Hamilton, the capital, was 45% higher than in New York. This impacts your business operating expenses: rents, salaries, services… Everything is more expensive.

Second, although corporate tax is zero, other taxes and fees exist:

• Customs duties, which can reach 25% on certain imported products
• Social security contributions for employees (about 5% of salary)
• Annual business license fees, varying by company type and size

Effective financial management in Bermuda requires:

• Substantial working capital to handle high startup costs
• Rigorous accounting, ideally managed by a local expert
• A cash flow strategy accounting for seasonal fluctuations (the high tourist season runs from April to October)
• A diversified financing plan, combining equity, bank loans, and potentially foreign investors

The Regulatory Maze: Don’t Underestimate Administrative Complexity

Despite its reputation as a tax haven, Bermuda has a sophisticated regulatory framework that is crucial to master. Neglecting this aspect can lead to severe penalties and compromise your business’s viability.

The process of starting a business in Bermuda involves several steps:

• Obtaining approval from the Bermuda Monetary Authority (BMA) for the company name
• Submitting the company’s articles of incorporation to the Registrar of Companies
• Obtaining a business license from the Department of Exchange Control
• Registering with tax authorities for social security contributions

Each business sector has its own regulatory requirements. For example, insurance companies must obtain a specific license from the BMA and comply with strict solvency and governance standards.

To effectively navigate this regulatory maze:

• Hire a local lawyer specialized in business law from the start of your project
• Familiarize yourself with the main laws governing businesses, such as the Companies Act 1981 and the Economic Substance Act 2018
• Plan a realistic budget and timeline for administrative procedures (allow at least 2 to 3 months to finalize your business setup)
• Implement a regulatory monitoring system to stay updated on legislative changes

The Illusion of Isolation: Anticipating Fierce Competition

The idyllic image of Bermuda can make one forget that the archipelago is a highly competitive international business center. Underestimating the competition is a fatal mistake for many entrepreneurs.

In 2024, over 16,000 international companies were registered in Bermuda, including many multinationals. This concentration of economic players creates a sophisticated and demanding business environment.

Competition isn’t limited to local businesses. Bermuda attracts talent from around the world, creating a competitive job market. In 2023, 28% of Bermuda’s workforce consisted of expatriates, often highly qualified.

To stand out in this competitive environment:

• Precisely identify your competitive advantage and unique value proposition
• Invest in innovation and technology to stay at the forefront of your sector
• Develop a strong network by actively participating in local professional events
• Consider strategic partnerships with complementary businesses
• Adopt a global approach, targeting markets beyond Bermuda from the start

Winning Strategies: Keys to Success in Bermuda

Succeeding in Bermuda requires a holistic approach, combining strategic vision, operational rigor, and adaptability. Here are the essential strategies to maximize your chances of success:

1. Cultivate Your Local Network

Bermuda operates largely on relationships. Invest time to:

• Participate in events organized by the Bermuda Chamber of Commerce
• Join professional associations in your sector
• Establish relationships with local authorities and opinion leaders

2. Bet on Continuous Training

The Bermudian market evolves rapidly. To stay competitive:

• Regularly train in new technologies and practices in your sector
• Encourage your employees to develop their skills
• Stay alert to international trends that could impact your business

3. Adopt a Sustainable Approach

Bermuda is increasingly sensitive to environmental issues. To stand out:

• Integrate sustainable practices into your business model
• Communicate about your ecological initiatives
• Explore opportunities in green sectors, like renewable energy

4. Diversify Your Funding Sources

Don’t limit yourself to traditional funding sources:

• Explore international crowdfunding options
• Consider strategic partnerships with foreign investors
• Inquire about government support programs for innovative businesses

5. Invest in Cybersecurity

Bermuda is a major financial hub, making it a prime target for cyberattacks. Protect your business by:

• Implementing robust security protocols
• Regularly training your employees in cybersecurity best practices
• Considering cyber insurance, which is well-developed in Bermuda

Creating and growing a business in Bermuda offers unique opportunities but requires meticulous preparation and constant vigilance. By avoiding common pitfalls and adopting a strategic approach, you’ll maximize your chances of success in this entrepreneurial paradise.