Bermuda Exempted Company
Formation of a Bermuda Exempted Company
A Bermuda exempted company (BEC) can be formed with a minimum issued capital of only $1. There is no corporate tax, and no statutory requirement to submit annual tax returns or audited financial statements.
Bermuda is a renowned centre of commerce, with a stable economy, a highly-skilled workforce, and a business-friendly environment.
14 - 21 days
FACTS & INFO
The principal statute governing the formation and operation of Bermudian companies is the Companies Act 1981 ("the Act") and is infrequently amended. There are 4 types of companies that can be incorporated in Bermuda, each having different constitutional characteristics: a company limited by shares (the the most common type of company incorporated under Bermudian law), a company incorporated with unlimited liability, a company limited by guarantee, and a limited duration company.
For foreign investors, the most popular form of company formation in Bermuda is the Bermuda exempted company (BEC). An exempted company is one which is exempted from the provisions of Bermudian law that apply to local companies which, among other things, restricts the portion of share capital which may be owned by non-Bermudians. Thus, exempted companies are predominantly owned by non-Bermudians and, although incorporated in Bermuda, may carry on business from within Bermuda normally only in connection with transactions and activities external to Bermuda. Under Section 129A of the Companies Act 1981, applications may be made to the Ministry of Finance for permission to carry out business in Bermuda.
The formation procedure of a Bermudian company is complex. Initially, an advertisement has to be 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, confirming whether the company wishes to be exempted or domestic.
An application for consent to incorporate is then made to the Bermuda Monetary Authority (BMA); this application should contain the following information:
- The name of the company;
- The proposed registered office address;
- The names and addresses and nationalities of the proposed directors;
- The names and 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;
- Proposed bank account details;
- Bank character references relating to the proposed beneficial owners;
- The appropriate registry fees.
The proposed name of a company can be reserved with the Registrar of Companies, up to three months prior to incorporation. No company may be registered with a name which, in the opinion of the registrar, is undesirable or which: is identical to or resembles the name by which another company is already registered or incorporated in Bermuda; contains the words "Chamber of Commerce" or suggests the patronage of Her Majesty or any member of the Royal Family; contains the word "municipal" or "chartered"; contains the word "co-operative"; contains the words "building society"; contains the word “bank” (see section 57 of the Banks and Deposit Companies Act 1999); does not contain the word "limited" in the case of a company limited by shares; or ends with the word "limited" where the company is formed with unlimited liability. If, at any time after a company has been registered, it appears to the registrar that a company's name is undesirable, the registrar may notify and direct the company to change its name.
MEMORANDUM AND ARTICLES OF ASSOCIATION
A company is incorporated in Bermuda by applying to the Registrar of Companies. The memorandum of association must be logged with the registrar. The memorandum specifies the activities in which the company may engage, the share capital of the company, the liability of shareholders, and the rules governing the internal management of the company.
A Bermuda exempted company must have at least one member (or shareholder) of any nationality, who can be an individual or a legal entity. Upon the issue of shares the names and addresses of the members must be entered on the share register. The share certificates may be denominated in any currency.
The minimum share capital of an exempted company is US$12,000; of an insurance company US$120,000; or of a mutual fund US$1 (or an equivalent amount in another currency). The authorised share capital may subsequently be increased by a resolution in a general meeting of the company. Shares of no par value and bearer shares are not permitted.
DIRECTORS AND COMPANY SECRETARY
A company must have at least one individual director, who need not be a resident of Bermuda. Corporate directors are not permitted.
A list of directors must be maintained at the registered office. The names of directors and officers are not made public; however, the registrar may require the information in some circumstances, such as if an official certificate is required. Changes in directors or officers need not be registered or reported.
The directors must also appoint a secretary, which may be a company; if the secretary is a director, then it must be an individual.
A Bermuda exempted company must have a registered office in Bermuda, and must appoint a president and vice president (or a chairman and deputy chairman). The foregoing positions must be filled by an individual who is a director of the company.
A Bermuda exempted company can be fulfilled by the appointment of any one of the following, who must be ordinarily resident in Bermuda:
- A resident secretary
- Resident representative
- Where a secretary is also either a director or resident representative in paragraphs a) and c) above, the provisions of the Companies Act 1981 will not be satisfied.
A Bermuda exempted company must keep its corporate records and register of officers and directors at its registered office.
Director meetings may be held in or outside of Bermuda. Notice of a meeting of the directors must be given to all directors. Shareholder meetings (AGMs) must be held every calendar year and need not be held in Bermuda.
Usually the process takes 14 working days, but we require an additional 7 working days for legalisation of the documents and delivery by courier.
RECURRING MAINTENANCE FEES
As from the second year, there are recurring maintenance fees of $9,250. These include:
- Provision of registered office and registered address
- Provision of resident representative
- Provision of corporate administration and/or secretarial services
- Payment of annual government fee payable in January of each year
In Bermuda there is no income or corporation tax, no capital gains tax, no VAT or sales tax, and no withholding tax. Companies and partnerships pay annual fees to the government depending on their nature and capitalisation.
AUDIT AND ACCOUNTING
Although there is no statutory requirement to file accounts, there should be sufficient accounting records in place to enable the directors and shareholders to ascertain the financial position of the company. The accounting records should be kept at the registered office address. If they are kept outside Bermuda, copies of all accounting records should be available for inspection by the directors each quarter. All Bermudian companies should appoint an auditor, except where the directors and shareholders have unanimously agreed not to appoint one.
OUR SERVICES AND REQUIREMENTS
OUR SERVICES INCLUDE:
- Name check and approval
- Application fee for consent to incorporate
- Filing fee for memorandum of association
- Provision of registered office
- Provision of resident representative
- Corporate equipment
- Payment of the government fee
- Application fee for tax exemption undertaking
- Rubber stamp
Please note: If applying for a corporate bank account, you will need to order a full set of apostilled company documents where the account is opened outside of Bermuda.
Please provide the following documents for all directors, shareholders, beneficial owners, and authorised signatories:
- Notarized copy of valid passport.
- Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within three months).
- Original or certified copy of Banker’s reference letter (dated within three months).
- In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and certificate of good standing (for companies registered more than one year).
IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES
If you conduct any activity without the required license or authorisation granted by a relevant authority in any jurisdiction, Starting Business will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.
Licensable activities include, but are not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.
Please contact us if you need assistance in the licensing of your financial, Forex brokerage or gambling company.
Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to your order during checkout. Shipping costs for international courier services are set automatically depending on geographic zones.