There are two separate restrictions on carrying on business in Bermuda, and which one applies to you depends on whether your entity is local or exempted. A license lifts either of them.
Local entities and the sixty per cent rule
A local company may not carry on business of any sort in Bermuda unless it satisfies the sixty per cent Bermudian ownership requirement in Part I of the Third Schedule, or falls within one of the other limbs of section 114(1), or holds a license.
The restriction is about who owns the entity. A local entity that is Bermudian controlled may trade in the domestic market without any license at all.
RELATED
The Bermudian ownership requirement →
Local and exempted entities explained →
Exempted entities and section 129
An exempted company is exempt from the ownership requirement, and in exchange section 129 restricts what it may do here. It may not acquire or hold land in Bermuda except under specified leases, and may not carry on business of any kind in Bermuda beyond a list of permitted exceptions.
The restriction is about what the entity does, not who owns it.
Section 24 does the same job for exempted LLCs
The Limited Liability Company Act 2016 mirrors the company regime: section 24 restricts what an exempted LLC may do in Bermuda, and section 25 provides the license.
Activities that need no license
An exempted company may, without a license:
- do business with persons outside Bermuda
- do business in Bermuda with another exempted undertaking, in furtherance only of that undertaking's business conducted outside Bermuda
- deal in securities of exempted undertakings, local companies or partnerships
- bank with a bank licensed under the Banks and Deposit Companies Act 1999
- conclude in Bermuda contracts necessary for its external business
- act as manager, agent, consultant or adviser to an affiliated exempted or permit company, or to an exempted or overseas partnership in which it is a partner
- reinsure risks undertaken by a Bermuda insurer
- carry on specified marketing and dealing activities relating to funds, limited partnerships and unit trusts
Which license you need
| Local company | Application under Companies Act 1981 s.114A, license granted under s.114B |
| Exempted company | License under Companies Act 1981 s.129A |
| Local LLC | Application under LLC Act 2016 s.12, license granted under s.13 |
| Exempted LLC | License under LLC Act 2016 s.25 |
| Formed outside Bermuda | A permit from the Minister, not a license |
RELATED
Applying for a local company license →
Applying for an exempted company license →
Applying for an overseas company or partnership permit →