Bermuda Economic Substance Update – Key Amendments Enacted

Following continued discussions with the EU's Code of Conduct Group and the OECD, Bermuda has passed amendments to its economic substance laws to more closely align Bermuda's regime to that of other 2.2 jurisdictions.

The Economic Substance Amendment (No. 2) Act 2019 and the Economic Substance Amendment (No. 3) Regulations 2019 came into force on 24 December 2019 and have introduced substantive changes to Bermuda's economic substance laws, which are summarised below. Our full advisory with an overview of Bermuda's economic substance requirements can be viewed here.

Holding entities

One of the key changes is to the definition of the relevant activity of engaging in business as a 'holding entity' which now means only 'pure equity holding entity'. The definition of pure equity holding entity has also been revised such that an entity will only be engaged in business as a pure equity holding entity if, as its primary function, it acquires and holds shares or an