A local company may apply to the Minister responsible for the Companies Act 1981 (the “Act”) for a licence to conduct business in Bermuda under section 114A of the Act (i.e. where Bermudian control is less than 60%). The issuance of such a licence is at the discretion of the Minister and may be for such duration and subject to such terms and conditions as the Minister may see fit to impose.
When deciding whether or not to grant a licence, the Minister will be guided by whether it would be in the public interest and will have regard to, amongst other things, the economic situation in Bermuda, the nature and previous conduct of the company and persons having an interest in the company, any advantages or disadvantages which may result from the company carrying on business in Bermuda, and the desirability of retaining in the control of Bermudians the economic resources of Bermuda.
Companies incorporated by non-Bermudians for the purpose of conducting business outside Bermuda are known as “exempted companies”, and are so called because they are exempted from those provisions of the Act which stipulate that at least 60% of the equity must be beneficially owned by Bermudians.
In general terms, section 129 of the Act restricts an exempted company from carrying on business in Bermuda, except to the extent that it is so authorized by its constitutional documents and has been granted a licence by the Minister responsible for the Act, who will form a view as to whether or not the granting of such a licence is in the best interest of Bermuda. There are certain activities that are expressly excluded from the requirement for a licence. Such activities, amongst others, include: doing business with other exempted undertakings (e.g. exempted companies, permit companies, exempted partnerships and exempted unit trust schemes) in furtherance of the business of the exempted company that is being conducted outside Bermuda; dealing in securities of exempted undertakings, local companies or partnerships; carrying on business as manager or agent for, or consultant or adviser to, any exempted company or permit company which is affiliated (whether or not incorporated in Bermuda) with the exempted company; or an exempted partnership in which the exempted company is a partner; carrying on the business of re-insuring risks undertaken by any company incorporated in Bermuda and permitted to engage in insurance and reinsurance business; in the case of mutual funds, marketing of shares or dealing with holders of shares of an exempted company where the exempted company is a mutual fund; marketing interests in or dealing with holders of interests in a limited partnership in respect of which the exempted company is a general partner; and marketing units in or dealing with holders of units in a unit trust scheme in respect of which the exempted company is a manager.
An application fee of $2,100 applies to both 114A and 129A licence applications. Once a licence is issued a licence issuance fee of $1,000 must be paid to the Bermuda Government. Thereafter, an annual licence fee of $1,000 is payable in January of each year for as long as the licence subsists.
Wire Transfer Payment/Direct Bill Pay Instructions:
|HSBC Bermuda||BERMUDA GOV-REGISTRAR OF COMPANIES||010-723971-501||USD|
|HSBC Bermuda||BERMUDA GOV-REGISTRAR OF COMPANIES||010-723971-001||BMD|
- The bank accounts are for the deposits pertaining to payments made to the Registrar of Companies and are not intended for transactions with other government departments. There will be delays in allocating funds not intended for the Registrar of Companies and the department will not be held responsible for any penalties incurred.
- Please include the company registration number in the bank reference field.
- All bank fees are borne by the sender. Any shortages in fees will reflect as an underpayment and will generate a penalty, if applicable. Companies will be deemed to be non-compliant until the difference is paid in full. Contact HSBC for transaction fees.
- Licence fees are deemed to have been received when the transaction appears on the Bermuda Government account-not on the date the funds were submitted. This must be taken into consideration when sending funds from other countries and other local banks that may require a longer period of time to process the funds. Contact HSBC for processing times.