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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

Offshore Trusts Guide: Jurisdictions

Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Cook Islands Cyprus Gibraltar Guernsey Isle of Man Jersey Liechtenstein Madeira Malta Mauritius Monaco Nevis New Zealand Panama Seychelles Turks & Caicos Vanuatu

Bermuda News

Bermuda Discusses Rental Tax Proposal, Tax Data Exchange
Tuesday 12/2/2019
Bermuda's Government has stated that proposals for a rental income tax, detailed in a pre-budget report, were released as part of a consultation exercise and that the proposal for the levy has not been confirmed or formally announced. A decision on whether to include the measure in the Budget will be revealed when it is presented to parliament on February 22, 2019, it said.

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.