Bermuda Overseas Partnerships

1. INTRODUCTION

The partnership is a popular vehicle for international ventures primarily because it is regarded in most jurisdictions (including the U.S. and the U.K.) as fiscally transparent. As a general principle, tax is imposed at the partner level, not at the partnership level, and consequently the tax position of one partner does not affect the position of any other partner.

Overseas partnerships formed under a law other than the law of Bermuda may apply for a permit to carry on certain trades or businesses in Bermuda under the Overseas Partnerships Act 1995 (as amended) (the "OPA").

2. OVERSEAS PARTNERSHIPS

The OPA allows an overseas partnership to apply for a permit from the Minister of Finance in Bermuda to engage in or carry on a trade or business in Bermuda. Unless authorised by its permit or unless such partnership falls within the "fund" exemption, such partnership may not participate in the domestic economy but is permitted to carry on