Bermuda is a U.K. overseas territory situated between North America and Europe. Its leading economies are tourism and international finance, which make out for the major share of the GNP. The island is famous for its pink sand beaches and historic town of St. George (founded 1612), attracting half a million tourists every year.
Bermuda has long been a draw to many global businesses because of its low income taxes, and many notable corporations have registered headquarters on the island. The government derives most of its revenues from tariffs and various taxes on tourism and real estate. Also because of this many insurance and investment companies have established offices there. The capital city is Hamilton, the official language is English, and the currency used is the Bermudian dollar (BMD).
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Visa requirements in Bermuda
If you are willing to work in Bermuda, you must have some of the following:
- Work Permit
- Spousal Letter
- Landing Permit
- PRC Certificate
Business structure in Bermuda
It is important to decide the nature of your business activities. Here are the main types of business you can start in Bermuda:
- Sole Proprietorship
- Partnership
- Limited Company
- Limited Liability Company (LLC)
The formation of a limited company, partnership, or LLC does not require the consent of the Minister of Finance. And this process is fast and may be accomplished within one day after an application is received. Where the consent of the Minister is required, the processing time may be up to a week.
What is a sole proprietorship in Bermuda
A sole proprietorship is owned by an individual in charge of operating the business, and this is the simplest form of business entity. The owner has all its capital and is entitled to all its profits. All obligations and liabilities of the sole proprietorship are the personal responsibility of the proprietor. This business form is the most suitable for small businesses. It is highly flexible to the changing environment. Since there is only one decision-maker, changes can be made fast.
If you have decided to operate your business as a sole proprietor, you have to register it with the authorities.
Sole proprietorship registration process
It usually takes less than a week to register a new company in Bermuda. You must register with the Office of the Tax Commissioner and the Department of Social Insurance. You may be needing some additional registration depending on the type of business activity conducted.
An individual listed as the owner will be thoroughly investigated before the business registration can be approved. The investigation will include both personal and business histories. If a company owner is holding more than 5% of the share capital, it is required to complete statements of their personal history and provide certified copies of their passports. As part of the application process, a clear business plan is also required.
It is necessary for the Bermuda Monetary Authority (BMA) to approve any proposed company name because certain words are not allowed. Bermuda companies are obligated to have a registered address where the records and shareholder register are held, as it cannot be a P.O. Box.
Registered companies must also declare a financial year-end and appoint outside auditors. It can be operated from bank accounts in Bermuda or elsewhere in the world. Once your registration has been approved, a certificate of incorporation will be issued. You are not required to register with the Registrar of Companies. It is also encouraged to register with the Bermuda Economic Development Corporation (BEDC).
Taxes for sole proprietorships in Bermuda
As mentioned above, Bermuda has enjoyed a long tradition of no Bermuda-imposed income or profits taxes.
- Corporate tax in Bermuda - 0%
- Personal income tax - 0%
- VAT rate - 0%
- Double taxation treaties signed with 41 countries, and 9 Tax information exchange treaties signed.
However, everyone who works on the island is obliged to contribute to a pension fund and is liable for certain taxes. These include corporate service tax, stamp duty and payroll tax, land tax, and some other minor taxes.
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