An exempt company is exempted from the requirements of the 1981 Bermuda Companies Act, regarding local companies. In particular, an exempted company may be 100% foreign owned. The company formation procedure in Bermuda takes 3 to 5 days, the first step in the registration procedure is the reservation of your company name with the Registrar of Companies.

Company Name

The first step in the registration procedure is we check and reserve your company name with the Registrar of Companies.

Bermuda companies fall into two principal categories:

Companies incorporated by Bermudans to trade primarily in Bermuda and companies incorporated by non-Bermudans for the purpose of conducting business outside Bermuda. In general terms, the Companies Act restricts an exempted company from conducting business in Bermuda.

Share Capital

The minimum share capital of a Bermuda company is $1, shares of no par value are not permitted and bearer shares are not permitted.

Annual Government Licence Fees

An exempted company pays an annual government fee, the first payment of which is made immediately upon incorporation and subsequent payments of which are made in January of each year.

Company Directors & Resident Representatives

Bermuda companies require only one director, which need not be a Bermuda resident. The Companies Act 1981 requires either one Bermuda Resident Director, Secretary or Resident Representative, who can be individuals or companies.

Company Secretary

A Bermuda company must appoint a resident company secretary which, we can supply.

Shareholders

100% foreign ownership is permitted with a Bermuda exempt company, and only one shareholder is required, corporate shareholders are allowed.

Registered Office

Companies incorporated in Bermuda must maintain a registered office within Bermuda, we can provide this additional service.The share register, register of directors, minute book are kept at the registered office of your company in Bermuda. The registers are open for public inspection at the registered office.

Non-Resident Status – Free of Exchange Controls

The Companies Act restricts an exempted company from carrying on business in Bermuda. 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 free from all Exchange Control regulations.

Exempt Company – Restrictions

An Exempt Company may not trade in Bermuda, own property there or have an office with employees in Bermuda. A Bermuda Exempt Company may not undertake the business of banking, insurance, assurance, reinsurance, fund management, investment schemes, investment advice or any other activity, which may suggest an association with the banking and insurance industries. These banking and insurance activities are prohibited unless licensed.The consent of the Minister of Finance is required only in respect of companies which plan to engage in restricted activities like banking, investment business, trust business.

Ownership of the Company

Bermuda Government policy requires full disclosure of the ultimate beneficial ownership of your Bermuda company. This information is held in the strictest confidence by the Minister of Finance.

Bermuda Taxation

An Exempt Company has no taxes on profits, income or dividends, nor is there any capital gains tax, estate duty or death duty within Bermuda.

Government Filings

With Bermuda exempt company the only annual filing with the Government would be a Statutory Declaration of the authorised share capital upon which the annual government fee is calculated and paid in January of each year.

Filing of Accounts

A Bermuda exempted company is not generally required to file accounts with the Registrar.

Annual Audit

The requirements for the appointment of an auditor and audited financial statements may be waived if all the shareholders and directors agree that there shall be no auditor or audited financial statements.

Statutory meetings

The signatories to the Memorandum are the provisional directors of the company who act as such until the first board of directors is elected. The provisional directors will have subscribed to the bylaws of the company, will allot the share capital and will convene the statutory meeting, which is deemed to be the first annual general meeting of the shareholders of the company.At the statutory meeting, the shareholders will confirm the bylaws, elect the first board of directors and appoint auditors. The first board of directors meets immediately following its election for the purposes of, amongst other things, electing the company's officers for the ensuing year, fixing the company's financial year end, opening bank accounts, establishing the company's registered office and dealing with other matters necessary to put the company in a position to commence business.

Share Capital

The authorised share capital of a company may be increased by resolution of the shareholders in general meeting if authorised by the company's bylaws. Any exempted company may, if so authorised by its bylaws and the shareholders in general meeting, divide its shares into several classes and attach thereto any preferential or special rights.

Company Representatives

The business of a company is managed by its board of directors and the first board of directors is elected at the statutory meeting of the shareholders.Every officer, in exercising his powers and discharging his duties, must:

  • Act honestly and in good faith with a view to the best interests of the company.
  • Exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Financials

The company does not have to keep records in Bermuda. If the company chooses to keep records they can be kept anywhere in the World.

Accounts or financial statements filing

A Bermuda exempted company is not generally required to file accounts with the Registrar

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.