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Offshore Trusts Report: Bermuda

Supervisory and Licensing Regime and Fees

The Trust Companies Act 1991 and the Trusts (Regulation of Trust Business) Act 2001 established a regulatory regime for trust management companies in Bermuda, and many professional firms have taken advantage of this legislation.

The 2001 Act prohibited the carrying on of trust business in or from within Bermuda unless the trustee is licensed or exempt. The Act replaced the Trust Companies Act 1991, and conferred new regulatory and information gathering powers on the Bermuda Monetary Authority.

There are over 30 licensed trust companies in Bermuda, some of them operating as exempt companies.

Private trust companies have gained currency in recent years.

Trust Companies (or indeed partnerships) offering their services more widely need a license from the Finance Ministry, which delegates the issue of licences to the Bermuda Monetary Authority. Certain minimum requirements must be met before a license is issued:

  • Minimum paid-up capital of $250,000;

  • Adequate insurance;

  • Adequate premises and appropriately skilled staff.

An application includes details of beneficial ownership, personnel, business plan etc. A licensed company is subject to reporting and other requirements under the Bermuda Monetary Authority Act 1969. It is also subject to Codes of Conduct covering 'know your customer' rules, defences against money laundering and other criminal activities. The annual licensing fee payable to the BMA is dependent on the type of licence and the number of staff employed. The annual fee for a limited trust licence is USD1,100. The annual fee for an unlimited trust licence starts at USD12,130 for a licensed company which employs five people or less, up to USD36,400 where it employs ten people or more.

There is no stamp duty on Bermudan Trusts; and there are no income or corporation taxes in Bermuda.

The two key associations in Bermuda for trust management companies are The Society Of Trusts and Estate Practitioners (STEP, Bermuda Branch), and the Bermuda International Business Association (BIBA).

Although trust management companies have always been required to register with the Ministry of Finance, following a KPMG review of the jurisdiction's supervisory and regulatory regime, it was recommended that individuals who deal with trusts should also be required to sign up, and that both groups should become the responsibility of the financial services regulator.

As a result of the KPMG review, and in response to pressure from the OECD and FATF, Bermuda introduced the aforementioned Trust (Regulation of Trust Business) Act 2001 which established minimum criteria and a statement of practice for trusts, and ensures that trust professionals treat customers in a fair and proper fashion.

Superintendent of Banking, Trust, and Investment at the BMA, Munro Sutherland explained at the time that: "Bermuda was one of the first jurisdictions to regulate trusts with the Trusts Companies Act 1991. It was pioneering stuff at the time, but it was rather limited." The deadline for registration of individual trust professionals with the Bermuda Monetary Authority under the Act was in January, 2003.

A Code of Practice under the 2001 Act was passed in 2002; it provides guidance as to the duties, requirements, procedures, standards and sound principles to be observed by persons carrying on trust business. A revised 'Statement of Principles' under the Act was issued in June, 2004.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Bermuda News

Cayman Islands Named Leading Specialized IFC Friday 8/9/2017 The Cayman Islands has again been named the world's number one specialized financial center by the Banker magazine, part of the Financial Times Group.

Bermuda, EU To Collaborate On Insurance, Pensions Oversight Tuesday 17/1/2017 The European Insurance and Occupational Pensions Authority and the Bermuda Monetary Authority have newly signed a memorandum of understanding.

Bermuda Passes Raft Of Business-Related Bills Thursday 4/8/2016 Over the past 15 months Bermuda has passed nine legislative bills to modernize the island's legal framework, create new growth opportunities, and ensure the territory remains internationally competitive.

OFCs Join G5 Beneficial Ownership Initiative Monday 25/4/2016 Bermuda, Gibraltar, and the Isle of Man Governments have agreed to support an initiative on the automatic exchange of beneficial ownership information, which is being spearheaded by the five largest economies in the European Union.

Bermuda Trust Companies Receive STEP Awards Wednesday 16/9/2015 Two Bermuda trust firms have claimed top industry prizes at the prestigious 10th annual STEP Private Client Awards in London.

Strong Demand For Bermudan IBCs Thursday 19/6/2014 Bermuda has reported healthy growth in both offshore and local company registrations, including a 21 percent year-on-year increase in the use of international business companies.

Offshore Company Formations Have Slowed Wednesday 7/8/2013 The majority of offshore jurisdictions experienced a decline in company incorporation activity in the second half of 2012 compared with the first half, according to legal services consultancy the Applebly Group.

Bermuda Relaxes Beneficial Owner Reporting Rules Tuesday 26/2/2013 The Bermuda Monetary Authority has announced that it has increased the threshold above which beneficial owners of stakes in companies or partnerships, or companies that are subject to exchange control requirements, must disclose personal information to the Authority, to 10% from 5%.

Former Banking Head To Lead Cayman Finance Friday 8/2/2013 Cayman Finance, the organization formed to represent the Cayman Island's financial services industry, has confirmed the appointment of Gonzalo Jalles, the former head of HSBC Cayman, as Chief Executive Officer with immediate effect.

Bermuda Outlines 2013 Regulatory Priorities Wednesday 6/2/2013 The Chief Executive Officer of the Bermuda Monetary Authority has said that an "extremely busy year" lies ahead for the regulator as it develops a "risk-based regulatory and supervisory environment that fits the unique nature of Bermuda's market" following the territory's decision not to apply the Solvency II capital adequacy framework to the captive insurance sector.