Opening a Bank Account for Your Offshore Company in Bermuda: A Practical Guide

Published on August 16, 2026 and written by Cyril Jarnias

Bermuda remains a premier destination for international structures, particularly through “exempted” companies intended to operate outside the territory. But as soon as you move from theory to practice, an obstacle quickly appears: opening a bank account. With economic substance requirements, anti-money laundering controls, a 15% minimum tax for certain groups, and an “offshore” reputation closely scrutinized by correspondent banks, nothing is left to chance.

Good to know:

This guide offers a pragmatic take on the subject: structuring your offshore company, choosing your banking strategy, preparing your file, and avoiding the mistakes that block account access.

Understanding the Bermuda Framework Before Considering a Bank

Before even discussing account opening, it is essential to understand how corporate structures and taxation work in Bermuda, as these factors directly shape how banks react.

“Exempted” Companies: The Standard Offshore Vehicle in Bermuda

The vast majority of international businesses use an “exempted” company for their Bermuda operations. These are structures created by non-Bermudians primarily to conduct business outside the archipelago. They are classified as “exempted undertakings” and receive special treatment with respect to exchange control and local taxation.

For these companies, several features are key from a banking perspective:

– They are considered non-resident for exchange control purposes, unless at least 80% of the capital is held by Bermudians or the majority of partners are residents.

– They may freely pay dividends, distribute capital, open and maintain bank accounts abroad, hold accounts in any currency, and purchase securities—without specific local tax or government control.

– They generally receive a “Tax Assurance Certificate”, protecting them from new Bermuda taxes until March 31, 2035. However, this certificate does not prevent the application of the new 15% corporate income tax regime for large multinational groups.

These elements reassure banks about the legal stability of the framework, but they also attract increased scrutiny of how these companies are actually used.

An Attractive but Increasingly Complex Tax Environment

– Bermuda has long operated on a model of tax neutrality:

– 0% corporate income tax for most companies;

– no income tax, no dividend tax, no capital gains tax;

– no VAT or sales tax.

This foundation remains for small and medium-sized structures, but the landscape is changing for large groups.

The New 15% Corporate Income Tax

Parliament passed a Corporate Income Tax Act introducing, for fiscal years beginning on or after January 1, 2025, a 15% corporate income tax targeting a very specific set of companies: multinational groups with consolidated revenues exceeding €750 million in at least two of the four fiscal years preceding the tested year.

In practice:

– Only Bermuda entities belonging to such a group (Bermuda Constituent Entities) fall within the scope of this tax.

– The taxable base is calculated at the Bermuda “BCE Group” level, not entity by entity.

– The 15% rate aligns with OECD Pillar 2 (GloBE Rules).

– Affected companies must register with the Bermuda Tax Authority, file an annual return, and pay the tax in Bermudian dollars, at a fixed parity with the U.S. dollar.

– Payments are made in installments, with a final true-up before the deadline (generally the 15th day of the 10th month following the close of the fiscal year).

Companies below the €750 million threshold remain subject to 0% tax on profits. But banks systematically ask to understand which regime the company falls under, especially since the introduction of this tax comes with strict rules on foreign tax credits and controlled foreign corporation (CFC) rules used by some groups.

Other Levies Not to Overlook

Even without corporate income tax for most structures, Bermuda is not a “no-cost” jurisdiction. Banks know this and often compare clients’ narratives with the actual flow of funds:

10.25

Payroll tax rate applicable to employee compensation of international “exempted undertakings” companies.

These items affect a company’s costs and therefore its financial presentation, which directly matters to banks when assessing risk.

Economic Substance and International Compliance: An Inseparable Trio

In Bermuda, banks no longer look only at solvency; they look at a complete triangle: economic substance, international tax transparency, and anti-money laundering compliance.

The Economic Substance Regime

Since the Economic Substance Act 2018 and its regulations, entities engaged in certain “relevant activities” must demonstrate a real local presence. These activities include in particular:

– banking, insurance, fund management;

– financing and leasing, shipping;

– distribution and service centers, headquarters functions;

– asset holding (holding), intellectual property rights management.

For these entities, they must have:

– physical offices or premises in Bermuda;

– full-time employees with appropriate skills;

– sufficient operating expenses locally;

– control and management from Bermuda, as well as income-generating activities conducted locally.

Each entity subject to these rules must file an Annual Economic Substance Declaration within six months after the end of its fiscal year. Banks frequently ask for proof of filing, or even the key details of the filing, to ensure the client is not non-compliant.

FATCA, CRS, and Automatic Exchange of Information

Bermuda clearly positions itself as a cooperative jurisdiction:

Warning:

Bermuda applies a FATCA Model 2 agreement (direct reporting to the IRS), adopted CRS and OECD country-by-country reporting from the outset, and has signed more than one hundred TIEAs (including with the United Kingdom and European states). Financial institutions must register, notify, and file CRS reports for accounts existing since 2016, with strict deadlines: notification before April 30, reporting before May 31, and CRS compliance form before September 30.

This transparency has very concrete implications for clients: account data is automatically exchanged with the country of tax residence of the beneficial owner. Banks therefore carefully verify CRS self-certifications, TINs (tax identification numbers), and tax residency declarations.

Anti-Money Laundering and Counter-Terrorist Financing

Bermuda has put in place a dense regulatory framework (Proceeds of Crime Act 1997, Proceeds of Crime (AML/ATF) Regulations 2008, Anti-Terrorism Act, etc.). Banks must:

– apply Customer Due Diligence (CDD) measures at account opening and on an ongoing basis, with enhanced obligations above USD 15,000 or in cases of suspicion;

– identify and verify beneficial owners, especially any person controlling more than 25% of voting rights or capital;

– document the source of funds and source of wealth;

– conduct sanctions screening when the relationship is established and for every transaction deemed sensitive;

– file Suspicious Activity Reports with the Financial Intelligence Agency in cases of suspected money laundering or terrorist financing.

In this context, opening an account for an offshore company is never a mere formality: it is an exercise in deep transparency.

Choosing Your Banking Strategy for an Offshore Company in Bermuda

With only four fully licensed banks (HSBC Bank Bermuda, Butterfield, Clarien Bank, Bermuda Commercial Bank) and a banking market dominated by a few cautious players, expecting a competitive landscape similar to Europe or the United States would be illusory. For an offshore company incorporated in Bermuda, three banking paths emerge.

Three Possible Routes for Banking an “Exempted” Company

Practitioners observe that most “exempted” companies or Bermuda LLCs pursue one (often several) of the following three options.

1. Local Account in Bermuda

Obtaining an account with a local bank is feasible, but requires valid identification documents, proof of address, and possibly an initial deposit.

– a real economic connection with Bermuda (insurance activity, a locally managed fund, an on-site management team, operational offices);

– a business model consistent with the territory’s “flagship” sectors (insurance, reinsurance, asset management, shipping, etc.);

– acceptance of constraints: lengthy onboarding, extensive documentation, relatively high minimum deposits and balances, and a heavily relationship-driven approach.

In return, the company benefits from:

Tip:

Choose a multi-currency account integrated into the local professional ecosystem (lawyers, managers, auditors) to strengthen consistency with economic substance obligations, especially when the business is actually run from Bermuda.

2. International or Private Bank in Another Jurisdiction

Many Bermuda holding companies or investment companies hold their assets with international banks in other reputable jurisdictions (Switzerland, Luxembourg, Singapore, etc.). These institutions are often comfortable with Bermuda structures, particularly for custody and portfolio management.

Advantages:

– access to sophisticated investment services;

– the ability to bypass the “offshore” reputation sometimes associated with local banks in the eyes of international correspondents;

– a wide range of currencies and products.

Disadvantages:

– the same level of due diligence, if not more, because the bank will ask “why Bermuda?” if the company has no substance there;

– exposure to the combined oversight of two regulators (the bank’s regulator and the BMA).

3. EMIs and Regulated Payment Providers Abroad

For operational cash management and currency payments, electronic money institutions and payment providers (often European or British) offer a practical alternative:

Comparison of Multi-Currency Accounts

Overview of the key benefits of multi-currency accounts for frequent transactions and faster account opening.

Faster Account Opening

Multi-currency accounts that can sometimes be opened more quickly, simplifying operational setup.

Optimized Digital Interfaces

Digital solutions suited to high transaction volumes (e-commerce, B2B services, etc.) for smooth transaction management.

Flexible Substance Requirements

Requirements less focused on Bermuda, favoring the overall coherence of the file.

But these players remain regulated in their own countries and often take a very cautious approach to so-called offshore structures, especially if the company cannot demonstrate clear commercial activity or full transparency on ultimate beneficial owners.

How Banks Evaluate a Bermuda Company

All serious institutions apply Enhanced Due Diligence (EDD) to companies in Bermuda, regardless of the channel chosen. This enhanced review covers at least:

Good to know:

To open an account in Bermuda, provide the company’s full identity (certificate of incorporation, articles, registers, certificates), the ownership chain down to the ultimate beneficial owners with ID documents and proof of address, a detailed description of the business (customers, suppliers, geographic scope, volumes, economic rationale), and the source of funds and source of wealth (sale proceeds, dividends, salaries, inheritances, capital gains, crypto) duly documented.

When wealth comes from complex events (IPOs, asset sales, private equity investment, crypto assets), the file must align contracts, statements, and audit certificates so that the financial narrative is consistent. A sloppy or incomplete file is now the surest way to end up with a refusal.

The Decisive Role of Substance in Convincing the Bank

In Bermuda, substance is not just a tax requirement: it is a key factor in gaining access to a bank account. A company limited to a registered office provided by a corporate service provider, with no real office or team, will struggle to convince a Bermudian bank that it is not a mere “shell.”

Substance can take several forms:

– insurance or fund management activity actually run from the island;

– resident directors and board meetings held locally;

– actual local administrative or operational staff;

– significant operating expenses in Bermuda.

The more tangible these elements are, the more comfortable the bank will be opening and maintaining the account, especially given pressure from U.S. and European correspondents that often classify Bermuda as a jurisdiction to watch.

Opening a Bank Account: The Step-by-Step Process

Once the overall strategy is chosen, the account opening process generally follows a fairly standard framework, whether in Bermuda or another financial center.

Step 1: Company Formation and Basic Compliance

No bank will process a file until the structure legally exists. The company must therefore be duly incorporated under the Companies Act 1981 (or, in the case of an LLC, under the relevant provisions), with:

– a name reserved and approved by the Registrar of Companies;

– Memorandum of Association and bye-laws drafted and filed;

– appointment of directors, the secretary, and, where applicable, the resident representative;

– registration of the registered office with a licensed corporate service provider;

– payment of initial government fees and, where applicable, application for a Tax Assurance Certificate;

– minimum compliance with economic substance requirements if the intended activity falls within the scope of the ESA.

The basic documents issued by the Registrar (Certificate of Incorporation, registered articles, etc.) will form the core of the banking file.

Step 2: Bank Selection and First Contact

The choice of bank depends mainly on: the bank’s reputation, fees and commissions charged, quality of customer service, products offered, and online banking options.

– the nature of the business (investment holding, brokerage, insurance, shipping, e-commerce, etc.);

– the profile of the beneficiaries (individuals, family office, listed group);

– the volume of flows and currencies used.

Example:

An initial exchange with the bank—often initiated by a relationship manager or advisor and introduced by a lawyer or corporate service provider—helps lay the groundwork for the relationship and establish a structured first contact.

– test the bank’s appetite for the type of structure presented;

– clarify minimum deposit thresholds, account maintenance fees, and average opening timelines;

– check whether remote opening is possible or whether a physical visit by the principals is required.

Step 3: Preparing the Account Opening File

The key to success is putting together a complete, certified file ready for audit. For a Bermudian offshore company, the same documentary blocks generally apply.

Corporate Block

– Certificate of Incorporation.

– Up-to-date Memorandum and bye-laws.

– Register of directors and shareholders.

– Board resolution authorizing the account opening and designating the signatories.

– Certificate of good standing if the company is not recently formed.

– Where applicable, a certificate of incumbency attesting to the current management and structure.

Beneficial Owners and Directors Block

For each beneficial owner (often at or above 10% or 25% ownership) and for each signatory:

– certified copy of passport;

– secondary photo ID (national ID card, driver’s license) when required;

– recent proof of address (utility bill, bank statement, tax notice);

– resume or professional profile for more complex files;

– bank reference letter for high-net-worth or complex asset profiles.

Business and Compliance Block

– Detailed business plan: activity description, business model, target markets, key suppliers/customers, financial projections.

– Evidence of business activity: contracts, invoices, import/export documentation, licenses, as applicable.

– Documentation on the source of funds intended for the account: sale contracts, bank statements, audited financial statements, dividend distribution agreements, etc.

– Source of wealth statement for the beneficiaries: professional history, major transactions, investments.

– Shareholding structure chart if the company is part of a larger group.

– Internal AML policy when dealing with a financial intermediary or regulated entity.

Warning:

Banks require recent, legible documents and, if necessary, translated into English and certified as true copies by a notary, lawyer, or recognized accountant.

Step 4: Submitting the Application and Pre-Analysis

The file is then submitted to the bank, usually via a secure portal or through the relationship manager. This phase includes:

– a basic completeness check;

– initial sanctions and PEP (politically exposed persons) screening on the names provided;

– preliminary review for inconsistencies (address in a sanctioned country, undeclared high-risk activities, etc.).

If the profile is deemed outside the bank’s criteria (no economic link with Bermuda whatsoever, business incompatible with the bank’s policy, beneficiary in a sanctioned jurisdiction), the file may be rejected at this stage.

Step 5: Interview and Enhanced Due Diligence

Once the file passes this initial filter, the bank usually arranges a discussion with the principals:

– an in-person meeting in Bermuda or at an international branch;

– a recorded video conference with real-time identity verification.

The goal is to:

– clarify the understanding of the business;

– verify consistency between the narrative and the documents;

– detail expected flows (volumes, currencies, counterparties, countries involved).

In parallel, the compliance team performs an in-depth review:

– AML/ATF analyses;

– verification of the group structure and any subsidiaries in countries listed as non-cooperative;

– detailed review of supporting documents for the source of funds.

Files with multiple jurisdictions, crypto flows, or a long ownership chain almost automatically trigger Enhanced Due Diligence: external cross-checks, commercial intelligence reports, press reviews, etc.

Step 6: Decision, Opening, and Activation

If the compliance committee approves the file:

– the account is opened in the agreed currency or currencies (BMD, USD, EUR, etc.);

– e-banking access is activated;

– the bank sets the minimum balance level, authorized services (cards, international transfers, possible credit lines).

In some cases, a significant initial deposit is required, particularly for wealth management accounts or large holding companies. For smaller structures, the minimum may remain symbolic, but monthly account maintenance fees and international transaction costs remain high compared with traditional retail banks.

What Banks Expect from a Bermudian Offshore Company

Beyond the documents, the bank seeks to answer a few simple but demanding questions.

Why Bermuda?

For a so-called “offshore” structure, being unable to clearly explain the choice of Bermuda is a deal-breaker. Justifications generally well received are:

– proximity to locally regulated insurance or reinsurance activities;

– integration into a group already present in Bermuda;

– access to a common law legal environment and a sophisticated professional infrastructure for funds, trusts, or vessel management;

– a clear international financing or investment strategy.

Good to know:

A vague statement such as “tax optimization without further detail” immediately triggers compliance alarms. It is therefore essential to be precise and detailed to prevent any risk of being flagged.

Do the Numbers Match the Business Plan?

Banks closely examine:

– projected flows (amount, frequency, countries);

– the nature of counterparties (B2B clients, platforms, marketplaces, etc.);

– consistency between declared share capital, projected cost structure, and cash flow needs.

A company with nominal share capital, no local expenses, but projected flows in the tens of millions raises doubts.

Substance and Regulatory Consistency

For activities covered by the Economic Substance Act, banks want to ensure that:

Good to know:

The management structure must match reality: if directors are presented as Bermuda residents, concrete evidence (address, role, actual presence) must back this up. The entity must also meet its economic substance and beneficial ownership filing obligations with Bermuda authorities. Finally, its status under the new 15% corporate income tax must have been analyzed, even if the conclusion is that the company is outside its scope.

In practice, an entity that ignores these matters discredits itself in the bank’s eyes, even if its flows are perfectly legal.

Frequent Obstacles and Mistakes to Avoid

Opening an account for an offshore company in Bermuda is still possible, but several recurring pitfalls derail projects.

Underestimating Bermuda’s “Offshore” Reputation

Bermuda is perceived as a sophisticated offshore center. That attracts large groups, but worries some correspondent banks, particularly in the United States and the European Union. The result:

– local banks themselves face pressure from their correspondents and apply heavier due diligence to non-resident companies;

– foreign banks systematically question the rationale for a Bermuda structure without substance.

Thinking this reputation has disappeared with transparency efforts is a miscalculation.

Overlooking Fixed Costs and Ongoing Obligations

Even without activity or revenue, a Bermuda company bears:

Good to know:

Annual government fees depend on the authorized capital and can be high for structures with substantial capital. Add the registered office costs charged by the corporate service provider, plus bank account maintenance fees, sometimes with high minimum balances.

Ignoring these costs at the financial modeling stage undermines the credibility of the business plan presented to the bank.

Treating Economic Substance as a Formality

For activities covered by the Economic Substance Act, settling for a “mailbox” company is now untenable. Not only can Bermuda authorities sanction the entity, but banks, once aware of an obvious breach, may decide to close the account.

Choosing Opacity over Transparency

In a CRS/FATCA environment, trying to conceal the actual tax residence of the beneficiaries or failing to properly document the source of funds is a losing strategy:

Warning:

Authorities in several countries automatically cross-check the information they receive. Thus, when a bank finds a discrepancy between declarations and reality, it tends to terminate the client relationship or even report the case to the authorities.

The best approach is to assume that any offshore structure will, sooner or later, be visible to the tax authorities in the beneficiaries’ country of residence, and to act accordingly.

Comparing Costs and Constraints: Bermuda vs. Other Centers

It is useful to place Bermuda in the competitive landscape of offshore jurisdictions. On pure taxation, several territories (Cayman, certain British Overseas Territories) offer a 0% corporate income tax rate for offshore structures, as do Bermuda for entities below the €750 million threshold. The difference therefore lies elsewhere:

Good to know:

Bermuda offers a regulated hub compliant with OECD and FATF standards, a stable common law framework, a robust ecosystem for insurance, funds, trusts, and financing, as well as no VAT and no income tax. On the other hand, it has few double-taxation treaties, imposes high fixed costs (government fees, compliance, cost of living), and makes banking access difficult for purely asset-holding structures with no local economic link.

This positioning explains why Bermuda is particularly well suited to companies linked to insurance, funds, shipping, or sophisticated wealth management, but less suited to small general trading structures simply looking for a “cheap” account in a neutral jurisdiction.

Summary Table: Types of Structures and Banking Access

The following overview helps visualize typical profiles and their banking feasibility.

Type of Bermuda Company	Main Activity	Typical Local Substance	Local Bank Account Access	Key Banking Comment
Exempted company – insurance / reinsurance	Underwriting, reinsurance	Offices, team, local management	High	Core Bermuda business, banks very familiar
Exempted company – holding / investment	Holding investments, portfolios	Variable substance	Medium	Accounts often held internationally rather than in Bermuda
Exempted LLC – international services	Consulting, IT, B2B services	Substance possible but costly	Variable	Clearly justify “why Bermuda”
Passive “mailbox” company	Passive holding of assets with no real activity	None apart from registered office	Low	High likelihood of refusal, especially at a local bank

Checklist: Items to Prepare Before Contacting the Bank

To increase your chances of success, a review of the “essentials” is useful.

Item to Prepare	Purpose for the Bank
Articles of incorporation, certificate of incorporation, registers	Prove legal existence and governance structure
Register of beneficial owners (>25%)	Identify who really controls the company
Business plan and financial projections	Understand the business model and expected transaction volume
Key contracts, evidence of business activity	Show that the activity is not purely fictitious
Source of funds / source of wealth file	Validate the legitimacy of the capital
Proof of compliance with substance obligations	Reduce perceived regulatory and tax risk
Clarification of status under the 15% CIT	Position the company within the modern Bermuda tax framework

Toward a Realistic and Sustainable Approach

Opening a bank account for an offshore company in Bermuda is far from impossible, but it requires:

– a project consistent with Bermuda’s ecosystem (key sectors, substance);

– careful anticipation of tax, substance, and reporting obligations;

– full transparency with the bank regarding the beneficiaries, the source of funds, and the structure’s objectives.

Good to know:

In Bermuda, bank secrecy has disappeared: the model relies on the absence of corporate income tax for most small structures, but with strict alignment with international standards on information exchange and anti-money laundering. Banks offer selective, but stable, account access for well-prepared projects.

For entrepreneurs and international groups, the conclusion is clear: the more structured, documented, and realistic the file, the more likely the company will enjoy a solid banking relationship over the long term in Bermuda or through international partners that accept Bermuda structures. The “offshore” company can no longer be an empty shell; it must become a credible link in a global organization that is fully embraced and reported.

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