Researched and compiled by Andrea Dismont CPA, ARe. Updated 2005

It can be claimed that Bermuda’s international prominence began with tourism when Princess Louise, the daughter of Queen Victoria, adopted the island as her winter retreat during the turn of the 19th century. She was married to a Canadian Governor General and apparently detested the frigid winters in her newly adopted country. She soon discovered that our balmy jewel in the Atlantic Ocean was the perfect antidote to the northern climes.

The Princess Hotels chain were named in her honour. In time, other intellectual luminaries such as Mark Twain, Noel Coward, Georgia O’Keefe, Winslow Homer to name a few, gravitated to our isles for rest, recreation and creative inspiration.

Those visitors would be amazed that their sleepy quiet island has transformed itself into a leading international financial
centre covering reinsurance, insurance, trusts, banking, investments and now e-commerce. They would find it difficult to believe that these entities, loosely grouped under the term international business, have eclipsed tourism in their contribution to the island’s economy.

While the emphasis may have changed from artistic and literary pursuits to financial ones, the island’s pool of intellectual capital continues as one of several attractive reasons for international businesses to domicile here. Other reasons include the island’s stable political landscape, its legislation and progressive regulatory environment, its modern infrastructure and of course its geographic location.

Intellectual Capital and Professional Expertise

Bermuda has a well-educated, well-informed work force with a 98% literacy rate and unemployment at a fractional rate of 4%. Tertiary education is available at Bermuda College which provides associate degrees along with other professional continuing education courses. Many students continue their tertiary education abroad at Canadian, U.S. or English universities and colleges. Increasingly, many Bermudians pursue work experience overseas for several years before returning to the island.

The island is known for its world-class expertise in accounting, law, finance, actuarial science, telecommunications and e-commerce. In keeping with its educated work force, there are many active professional societies functioning in the business sector who help regulate the island’s business industries through codes of conduct, ethics and regulations. These societies include:

• The Bermuda Bar Association www.bermudabar.org
• ICAB (Institute of Chartered Accountants Bermuda) www.icab.bm
• CABER (Casualty Actuaries of Bermuda) www.casact.org/affiliates/caber
• BFAS (Bermuda Financial Analyst Society) www.membersocieties.org/bermuda.

POLITICAL LANDSCAPE
Known for its political, economic and social stability, Bermuda has been self-governing since early in its history as a colony. The country is governed by a democratically elected Parliament based on the British Westminster system consisting of 36 seats in the House of Assembly and an 11 member appointed Senate. Each member of Parliament represents one constituency on the island. The party with the majority of seats forms the Government with the Premier as its head. As of the latest election held in July 2003, the ruling party is the Progressive Labour Party (PLP), headed by Premier, Alex Scott. Currently, there are 11 cabinet ministers with Finance, Labour, Home Affairs & Public Safety, and Telecommunications & E-Commerce ministries being the most important to international business.

LEGISLATION
The island has a time-honoured independent judiciary system based on English common law with codification using British or Commonwealth law. There also exists a large body of Bermudian statutory law. In maintaining its pristine reputation, the island has enacted several commerce and professional conduct related acts which include the Companies Act 1981, the Insurance Act 1978 (which establishes 4 classes of insurance companies and their capital requirements), Proceeds of Crime (Money Laundering) Act 1998, the Trustees Act 1975 and the Recognition of Trusts Act 1987. Bermuda was also one of the first offshore jurisdictions to pass an Electronic Transactions Act in 1999 governing e-commerce. (see Bermuda Laws Online www.bermudalaws.bm for more laws and their wording). The island prides itself on acting in a proactive manner with a high degree of transparency. It has established several regulatory bodies such as:

• the Bermuda Monetary Authority www.bma.bm
• The Insurance Advisory Committee www.bermuda-insurance.org
• and the Registrar of Companies www.roc.gov.bm to monitor compliance with the laws.

MODERN INFRASTRUCTURE
Beyond physical infrastructure of paved roads, an international airport, highly qualified medical professionals, and a hospital with MRI and CAT scan capabilities, Bermuda also excels in modern telecommunications. The island boasts 3 submarine cables; 3 satellite earth stations (Intelsat–Atlantic Ocean), and 6 internet service providers to assist its burgeoning e-commerce, and international telecommunications operations.

GEOGRAPHY
Bermuda consists of several tiny islands (rumored to total 365, one for each day of the year) with over 150 miles of roads in just 21 square miles of land-mass. Standing alone in the mid-Atlantic, the islands are the ocean’s most northern coral reef system, enjoying semi-tropical weather averaging 71 degrees Fahrenheit. Visitors are often amazed to find that this warm paradise is located less than 2 hours flying time from the United States east coast, making it an easy location in which to do business. Upon arrival, business visitors can enjoy our wonderful beaches, golf courses, restaurants, and conference facilities while staying in up-market accommodations.

EXCHANGE CONTROL AND TAXATION
Another reason why it is easy to do business in Bermuda is that the local currency, the Bermuda dollar, is at par with that of the United States of America.The Bermuda Monetary Authority is responsible for exchange controls,and government and the domiciled banks are intolerant of money laundering. The island’s tax system is based on consumption of goods, with taxes being levied upon importation. There are also other taxes, including payroll, and land tax. International businesses may be liable for taxes in other jurisdictions where they are trading or have connections, particularly where those jurisdictions levy taxes on worldwide income.

IMMIGRATION POLICY
The Bermuda Government has recently introduced term limits on work permits, with the provision for grants of exemption for key personnel. Minister The Hon. K.H. Randolph Horton stated in an address in the Fall of 2003 at the Bermuda Yacht Club, that “The Government is committed to ensuring that businesses operate on the island without excessive regulation.” And that “This Government will do nothing to jeopardize the continuing success of business in Bermuda.” (from Bermuda Insurance Update issue no. 47, Aug 2003). The clarification of Government’s position and the provision for exemptions were seen to have eased concerns in the international business sector. Consult the Government’s official website for more information: www.immigration.gov.bm