Bermuda's Pragmatic Regulations

Increasingly, onshore and offshore jurisdictions alike seek to ensure that international business is conducted through active businesses who have their 'mind & management' closely linked to the jurisdictions where they assert their domicile. For example, onshore tax authorities frequently prescribe complex rules associated with, among other facts, where the 'mind & management' of an enterprise is located, the criteria for what makes a business 'active' as opposed to 'passive', how to determine the jurisdiction of corporate control, or what the tests might be to determine if an entity has a real and substantial connection to a jurisdiction.

Bermuda is no exception. For specified business activities in Bermuda, which include banking, insurance, fund management, financing and leasing, corporate headquarters, among others, Bermuda's Economic Substance Act 2018 and related regulations (2018), stipulate certain economic substance requirements that must be met.