Update To Bermuda's Economic Substance Legislation

The month of June 2019 saw a number of important updates to Bermuda's economic substance regime ahead of the 1 July deadline for compliance for entities in existence when the legislation came into force. This bulletin contains a summary of those developments.

Entities tax resident overseas out of scope

The Economic Substance Amendment Act 2019 (the "Amendment Act") came into force on 28 June. The Amendment Act introduced to the Economic Substance Act 2018 and associated regulations (collectively, the "ES Regime") the concept of a "non-resident entity", which it defines as an entity which is resident for tax purposes in a jurisdiction outside Bermuda that is not in Annex 1 to the EU list of noncooperative jurisdictions for tax purposes (i.e. an entity resident in a "blacklisted" jurisdiction will not count as a non-resident entity1). The Amendment Act further excludes non-resident entities from the scope of the ES Regime.