The formation procedure of a Bermuda Company is complex. Initially an advertisement is placed in a local newspaper announcing the intention to incorporate. The name of the proposed company, together with the objects clauses, has to be disclosed in the advertisement, also if the company requires to be exempt or domestic. An application for consent to incorporate is made to the Bermuda Monetary Authority. This application contains:
The company name
The proposed registered office address
The nature of intended business
The names, addresses and nationalities of the proposed directors
The names, addresses and nationalities of the proposed shareholders and their interest in the proposed company
The Memorandum of Association detailing the share capital and classes of shares and whether the liability of the company's shareholders will be limited or unlimited
Proposed bank account details
Bank character references relating to the proposed beneficial owners
Authorised Share Capital
The usual authorised share capital of a Bermuda exempt company is US$12,000; divided in to 12,000 common voting shares of US$1, which is the maximum capital for the minimum capital duty payable on incorporation and annually thereafter.
Licence Fees
A company with an authorised capital up to US$12,000 pays of US$1,995 capital duty per annum.
Directors
The minimum number of directors is two, who must be individuals. There must always be sufficient Bermuda resident directors to form a quorum in Bermuda. Non Bermuda directors may be appointed. The directors must appoint a president and vice president or chairman and deputy chairman as officers, who must also be a director of the company.
Company Secretary
A Bermuda company must appoint a resident company secretary, who must be an individual.
Shareholders
The minimum number of shareholders is one.100% foreign ownership is permitted with a Bermuda exempt company, and only one shareholder is required, corporate shareholders are allowed.
Unlike many jurisdictions, a Bermuda company presents a first class image internationally as
Bermuda is an international financial and banking centre with one of the world's highest per capita incomes.
Bermuda's Tax Neutrality System: Bermuda imposes no direct taxation on businesses operating from Bermuda. In essence, there are no income, capital gains or withholding taxes imposed on businesses operating in or from Bermuda.
A Bermuda exempt company is not required to submit annual tax returns or audited financial statements.
Incorporation of Bermuda Exempted Company
An International business company is a company which is exempted from the requirements of the Companies Act of Bermuda, regarding local companies.
An exempted company may be 100% foreign owned.
Incorporation Procedure
It is necessary to make an application to the Bermuda Monetary Authority for permission to incorporate the exempted company and to submit a personal declaration form for each of the proposed Non-Bermudian beneficial owners who proposes to have an equity interest of 5% or more in the company.
Tax Neutrality
There are no taxes on profits, income or dividends nor is there any capital gains tax, withholding tax, estate tax or death duty.
Non-Resident Status – Free of Exchange Controls
All exempted companies, with a few exceptions, will be designated by the Bermuda Monetary Authority as non-resident therefore the company will be free to deal in any currency of its choosing, other than resident Bermuda dollars, and will be completely free from all Exchange Control regulations.
Minimum Capital Requirement and Share Structure
The Companies Act 1981, as amended provides that a company must have at least a minimum capital of US$12,000 and that all shares should have a par value - the minimum share capital of US$12,000 must be subscribed, but there is no requirement that this capital be actually paid up.
Financial Statements - Audits
Bermuda companies are required to have audited financial statements approved by the shareholders at the annual general meeting of the Company, however such audited statements can be waived under the Companies Act if all the shareholders and directors agree to such a waiver.
Corporate Administration Services
Bermuda registered representative
Company Secretary to maintain the corporate records of the client company and maintain the Share Register and Register of Directors and Officers
Providing Registered Office
Liaising with government departments with respect to annual filings and any changes to the constitutional documents of the company
Liaising with banks and other service providers such as accountants and auditors
The Share Register and Register of Directors both of which are deemed to be public documents that are open to inspection by members of the public.
Resident Bermuda Directors - Resident Representative
The Companies Act of Bermuda requires that there be a minimum of two representatives of the company who are ordinarily resident in Bermuda.
Restrictions on Trading
A Bermuda Exempt Company may not trade in Bermuda, and may not own real estate there. A Bermuda Exempt Company may not undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes, the rendering of investment advice or any other activity, which may suggest an association with the banking and insurance industries. All of the aforementioned activities are prohibited unless licensed.
The Bermuda Monetary Authority carefully checks the ownership of Bermuda companies and partnerships and has to be satisfied that the persons who wish to form companies and partnerships are persons of integrity and good financial standing.
Contact Us
If you have further queries, don't hesitate to contact Tannet anytime, anywhere by simply visiting Tannet's website
www.tannet-group.net, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143181. or emailing to
mailtannet@21cn.com. You are also welcome to talk with Overseas SME Service Department online by simply joining our MSN:service@tannet.net.
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