Limited Liability Company
Country code - BM
Legal basis – Common law
Company law - Limited Liability Company Act
Company form – Limited Liability Company (LLC).
Liability - The liability of the members of the company is limited to the amount of their capital contributions.
Capital – There are no minimum capital requirements as well as no maximum limit.
Economic Substance – Under the Economic Substance Act 2018 and the Economic Substance Regulations 2018, Exempted and local companies, permit companies, exempted and local LLCs and partnerships that carry out ‘relevant activities’ are required to meet certain substance tests – such as control and management from within Bermuda, adequate physical presence, employees and operating expenditures, among others.
Relevant business activities include banking, insurance, fund management, finance and leasing, headquarters, intellectual property, distribution and service centers, and holding companies. High-risk IP businesses will be subject to enhanced substance tests, whereas pure equity holdings will be subject to minimum substance requirements.
Companies conducting relevant activities will need to file an Annual Economic Substance Declaration. Existing companies will have until June 30, 2019, to meet substance requirements, whereas newly incorporated entities in 2019 will be required to comply with substance legislation immediately.
Companies that are not compliant with substance requirements may face civil penalties up to BMD 250,000. Making false economic substance declarations may carry out penalties up to BMD10,000 or imprisonment for two years, or both.
Bermudian companies that do not carry out relevant activities are not required to meet economic substance requirements.
Members – At least one member, who may be an individual or a legal entity of any nationality. There are no limitations on the number of members and tiers and levels of members may be dictated by the LLC’s operating agreement. Details of members, managers or beneficial owners are not accessible to the public.
Manager – At least one manager, who may be a natural or legal person of any nationality. An LLC may be managed either by its owners or by third parties. Details of managers are not publicly disclosed.
Registered Address – An LLC must have a registered office situated in Bermuda for the service of process and to which all notices and communications may be addressed.
Electronic Signature – Permitted.
Re-domiciliation – A foreign entity can easily be re-domiciled as a Bermuda LLC.
Compliance – Bermuda LLCs are required to prepare and maintain accounting records, to reflect the financial position of the company. Account records should be kept for 5 years from the date of its preparation and may be kept anywhere.
An LLC must maintain a register of members containing the name and address of each person who is a member of the LLC, the date on which they became a member and the date on which they ceased to be a member.
The register of members need not be kept at the registered office of the LLC, but if it is kept elsewhere, the registered office should maintain a record of the address at which it is kept. The register of members is not open to public inspection.
The LLC Agreement is not required to be filed or registered with the Registrar of Limited Liability Companies
An annual return and an annual fee must be filed and paid to the Registrar.
An LLC that does not conduct any licensed activity is not required to file financial statements, nor annual audit is required.
- Members not disclosed
- Managers not disclosed
- Corporate members permitted
- Corporate manager permitted
- Local manager required
- Registered office or agent required
- Annual meeting required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum members
- USD 1 Minimum registered capital
- - Minimum paid up capital
- USDAny Capital currency
- 100% Foreign-ownership allowed
- 2017 AEOI
Corporate income tax - Bermuda does not levy corporate income tax. In addition, an LLC is a tax transparent entity, which means that any profits are passed through to the members to be reported as personal income in their country of residence.
Members pay personal income taxes in their country of residence on LLC profits proportionally to their share of participation in the LLC company, whether distributed or not.
It is important to note that certain countries do not recognize the pass-through status of an LLC, if the LLC is deemed to be tax resident in one of such countries, it may be subject to corporate income tax.
However, LLC’s tax transparency allows residents of certain jurisdiction to not be penalized under controlled foreign company rules.
Other taxes - Bermuda does not levy personal income taxes, including capital gains and investment income, which are exempt from taxation.
An annual tax is levied on the annual rental value of land and stamp duties may apply on estates transferred upon death at progressive rates from 5% up to 20% on estates with a value exceeding BMD 2,000,000.
- Tax transparent entity
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 0% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- Average cost Inventory methods permitted
- 0% Personal Income Tax Rate
- 0% VAT Rate
- 0 Tax Treaties
The Bermuda Islands are a British overseas territory located in the North Atlantic Ocean off the east coast of the United States. The closest American continent point is the Cape Hatteras in North Carolina, located 1,030 km to the northwest, while the city of Miami is 1 770 km to the southwest. It has just over 67,000 inhabitants and its capital is Hamilton.
Bermuda forms the northern peak of the legendary Bermuda Triangle, a large maritime area in which it is said that they have been disappeared numerous ships and aircraft in unexplained circumstances. The archipelago is in an adverse climate area prone to be hit by hurricanes.
Its official currency is the Bermudian Dollar (BMD), pegged to the US$ at a 1:1 ratio.
The executive power in Bermuda resides in the monarch and is exercised in his name by the Governor. The governor is appointed by the Queen on the proposal of the British Government. The head of government is the prime minister.
The cabinet is proposed by the prime minister and officially appointed by the governor. The Legislative Branch consists of a bicameral parliament inspired by the Westminster system. The Senate is the Upper House, composed of eleven members appointed by the governor on the proposal of the prime minister and the leader of the opposition.
The House of Assembly, or lower house, has thirty-six members elected by the population with the right to vote by secret ballot.
The country has one of the highest per capita income worldwide. Its economy is based on insurance and reinsurance, banking and financial services, as well as tourism, which accounts for approximately 28% of GDP. Bermuda has a robust international business and financial sector, which accounts for 60% of its GDP.
The industrial sector is small, and agriculture is severely limited by the lack of adequate land.
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