Bermuda Exempted Company

Bermuda sits at a strange intersection: it's simultaneously one of the world's most expensive islands and one of its most respected offshore jurisdictions. For non-resident founders, the Bermuda Exempted Company offers something that cheaper alternatives can't — genuine international credibility backed by a mature legal system, a stable regulatory environment, and a zero-tax regime that has been formally protected by government guarantee until March 2035.

That last point deserves emphasis. The Tax Assurance Certificate issued by the Bermuda Minister of Finance is not a loophole or a grey area — it's a statutory instrument that commits the Bermuda government to not levying income, capital gains, or profit taxes on your company until 2035. It's one of the few places in the world where the tax benefit comes with a legal guarantee.

That said, Bermuda is not a budget structure. If you're choosing between a Wyoming LLC ($60/year) and a Bermuda Exempted Company ($2,095/year minimum), you need to have a specific reason to be in Bermuda. The jurisdiction earns its premium through credibility, legal sophistication, and the scale of institutional trust it carries in global finance and insurance.

For the vast majority of founders reading this, the tax situation in Bermuda is straightforward:

No corporate income tax. No tax on profits, dividends, interest, royalties, or capital gains at the entity level. This applies until March 2035 under the Tax Assurance Certificate, and there is no indication the government will change its position for small-to-mid-size businesses beyond that date — though no promises extend beyond 2035.

The 15% CIT caveat. From 1 January 2025, Bermuda introduced a corporate income tax applicable to Bermuda businesses that are part of MNE groups with consolidated annual revenue of €750 million or more. If you're running a SaaS company or a consulting agency, you're nowhere near this threshold. If you're a finance or insurance business at significant scale, you need to assess your group structure carefully.

No filing of financial accounts. Exempted companies are not required to file accounts with the Registrar of Companies. You must keep proper books of account, but they can be maintained anywhere in the world and are for internal purposes and director inspection — not public disclosure.

Annual obligation. The only annual government filing is a Statutory Declaration of your authorised share capital, submitted alongside your annual government fee by January 31 each year. The fee starts at $2,095 for assessable capital of $0–$12,000 (USD). The standard setup of $12,000 assessable capital captures the minimum fee bracket for most companies. Fees increase on a scale above that.

Regulatory fees. From August 2024, the Bermuda government added a regulatory fee on top of the annual government fee, due to cover the Registrar's expanded responsibilities around Economic Substance, AML/ATF compliance, and UBO registers. Budget for both.

Payroll tax. If you have employees based in Bermuda, payroll tax applies. If you have no employees in Bermuda — which is the standard setup for a non-resident founder — no payroll tax is owed. This is one of the few cases where having zero local presence is actually cleaner.

Home country taxes. Bermuda has no income tax, but your home country might. The structure only works tax-efficiently if your personal tax residency situation supports it. A founder living in Germany or France who incorporates in Bermuda will still owe taxes in their home country on profits they draw. This is not a Bermuda problem — it's a universal truth about offshore structures — but it's frequently misunderstood.

Key obligations summary:

• Annual Statutory Declaration + government fee by January 31 (starts at $2,095)
• Regulatory fee due January 31 (from 2025 onward)
• Beneficial ownership disclosure to BMA at formation and on change
• CRS / FATCA reporting obligations where applicable
• No public filing of accounts, no audit requirement
• No annual general meeting required

This is where Bermuda shows its limitations for the typical digital nomad or online founder.

Bermuda-based banks — Butterfield Bank, HSBC Bermuda, and Clarien — are the main local options. All three are reputable, internationally connected institutions. The downside: their onboarding requirements are extensive, in-person visits are sometimes expected or preferred, and typical account opening timelines run 4–8 weeks. These banks cater primarily to the financial services and insurance industry, and a small online business or SaaS company may find it harder to pass their due diligence than a large institutional client would.

The more practical path for most founders is to open international accounts rather than Bermuda-local accounts. Wise Business works with Bermuda-incorporated entities and provides multi-currency accounts with relatively fast onboarding. Airwallex and Mercury are not direct fits for a Bermuda company based on their current published eligibility rules: Airwallex does not list Bermuda as an eligible business-registration country, while Mercury requires the business to be formed and registered in the United States or a US territory.

For payment processing, do not assume that a Bermuda incorporation alone creates access. Stripe does not currently list Bermuda as a supported business location; availability with other processors depends on their current onboarding, ownership, activity and banking requirements.

The honest reality: Bermuda's banking story is more complex than most offshore jurisdictions. This is not a place where you go because banking is easy — it's a place you go despite the banking friction, because the tax and credibility benefits justify it for your specific situation.

Bermuda has been a center for global reinsurance, captive insurance, and international holding structures for decades. It's home to some of the largest insurance and financial groups in the world. That pedigree matters — when you tell a counterparty, investor, or bank that your holding company is incorporated in Bermuda, it reads as a deliberate, sophisticated choice rather than a red flag.

The jurisdiction operates under English common law, which provides a well-developed framework for contracts, corporate governance, and dispute resolution. The Bermuda courts are experienced, accessible, and produce predictable outcomes. For businesses with significant assets or complex structures, that legal predictability has real monetary value.

The tax position is the headline. Bermuda levies no corporate income tax, no personal income tax, no capital gains tax, no withholding tax on dividends or royalties, and no estate or inheritance tax. That's a clean sweep. For small-to-medium international businesses — meaning those with less than €750 million in consolidated group revenue — this remains fully in effect. The Bermuda government's 2023 introduction of a 15% corporate income tax was deliberately scoped to apply only to large multinational enterprise groups hitting that €750M threshold, in compliance with the OECD Pillar Two initiative. If your business is nowhere near that scale, the new CIT does not affect you.

Exchange control is non-existent for exempted companies. The Bermuda Monetary Authority designates all exempted companies as non-resident for exchange control purposes, meaning you can hold and transact in any currency — USD, EUR, GBP, crypto, whatever the business requires — without restriction or approval.

Privacy is genuine but nuanced. You don't file annual accounts publicly. No annual return of shareholders is required. The share register and register of directors are maintained at the registered office rather than in a public government database. That said, Bermuda does require full disclosure of ultimate beneficial ownership to the government at formation and ongoing, and operates under FATCA, CRS, and other automatic exchange of information frameworks. You're private from the public; not from regulators or tax authorities in your home country.

Bermuda enacted the Economic Substance Act 2018, and it matters for some business types. If your Bermuda company carries out a "relevant activity" — including banking, insurance, fund management, shipping, financing, distribution and service centers, headquarters businesses, and intellectual property — you may need to demonstrate local substance. This typically means maintaining physical premises in Bermuda, having adequate employees, and showing that key management decisions are made locally.

For holding companies (pure equity holding, no IP), a lighter "reduced substance" test applies.

For most online businesses, agencies, SaaS companies, and consultancies that don't fit the defined relevant activity categories, economic substance requirements do not apply. But if your Bermuda entity holds intellectual property — particularly IP acquired from related parties — the high-risk IP category applies strict rules and this needs specialist legal advice before you proceed.

1. Choose a Corporate Service Provider (CSP). All exempted companies must work through a licensed CSP in Bermuda. They handle the BMA application, memorandum drafting, filing, and ongoing compliance. Conyers, Appleby, MJM Limited, and Carey Olsen are the top-tier firms. Offshore providers like Flag Theory offer more accessible entry points with transparent fees.
2. Reserve your company name. Submits to the Registrar; typically confirmed within 24 hours. Name must end with "Limited" or "Ltd." for share companies. Certain words (Royal, Bank, Insurance) require special approval.
3. Submit to the Bermuda Monetary Authority. The BMA must approve all exempted company formations. The application includes company name, nature of business, and details of all beneficial owners holding 10%+. Each UBO must sign a declaration and provide certified passport and proof of address. BMA review typically takes about one week.
4. File Memorandum of Association with the Registrar. Once BMA approval is received, the Memorandum is filed along with the certificate of formation. The Certificate of Incorporation is typically issued within 1–2 business days after filing.
5. Appoint resident representative. Every exempted company must have at least one of the following ordinarily resident in Bermuda: a director, a secretary, or a resident representative. Your CSP will provide this.
6. Pay government fee. Due immediately on incorporation, then January 31 annually.
7. Obtain Tax Assurance Certificate. Apply to the Minister of Finance through the BMA. Protects your zero-tax status until March 2035.
8. Open banking. Start with Wise Business for speed. Bermuda bank accounts take 4–8 weeks additional.

Total timeline from start to operational company: 2–3 weeks for incorporation, plus additional time for banking.