Economic Substance Q2 2021

Our last quarterly update on the developments of the economic substance regimes in the British Virgin Islands, the Cayman Islands and Bermuda related largely to reporting procedures and deadlines issued by the relevant regulatory bodies.  Since that update, important developments have occurred with respect to the applicability of the economic substance regime.  Specifically, amendments are proposed that will bring partnerships (or, in the case of Bermuda, more types of partnerships) into scope.

Currently in Bermuda partnerships (exempted, exempted limited and overseas) which have elected to have separate legal personality in accordance with section 4A of the Partnership Act 1902 are "relevant entities" and therefore in scope of the economic substance regime.  A bill relating to the Economic Substance Amendment Act 2021 (the "Bill") was tabled in the House of Assembly of Bermuda on 5 June 2021, which will ensure that all partnerships (even those that do not elect to