New economic substance regimes in Bermuda, the British Virgin
Islands and the Cayman Islands give rise to new considerations for
counterparties transacting with offshore entities
Economic substance requirements have been enacted in all leading
offshore financial centres in response to the EU Code of Conduct
Group (Business Taxation) reports issued in June 2018.
These set out the requirements for economic substance that
relevant non-EU jurisdictions were required to adopt in order to
avoid being blacklisted by the EU.
Scope of new regimes
The economic substance regimes enacted in Bermuda, the BVI and
the Cayman Islands generally cover the same ground and in
materially similar terms, although there are certain nuances across
the jurisdictions.
