Bermuda winning trust business from Cayman

Make text smaller Make text larger

  • Trust business boost: the BDA's Sean Moran

    Trust business boost: the BDA's Sean Moran

Bermuda’s competitive trust laws are attracting clients from other jurisdictions seeking a particular streamlined restructuring avenue.

In the Cayman Islands alarm has been expressed at the “flight to Bermuda” of trusts seeking a more competitive solution for clients.

Other jurisdictions with sizeable trust sectors are seeing a similar trend as trusts recognise the advantages offered through Bermuda’s trust laws.

The development has been hailed as good news for Bermuda.

“This is a prime example of the competitiveness of Bermuda’s trust law,” said Sean Moran, of the Bermuda Business Development Agency (BDA).

The “flight to Bermuda” issue was highlighted at the Mourant Ozannes’ International Trusts & Private Clients Conference in Grand Cayman.

Lawyer Shân Warnock-Smith QC, of ICT Chambers (Cayman), said she had dealt with a number of trusts changing governing law to Bermuda.

At the crux of the matter is the ability for beneficial interests under a trust to be varied, something for which a more straightforward path exists under Bermuda trust law.

Bermuda’s advantage comes from an apparent amalgam of sections from two separate 1925 Acts passed in England.

Randall Krebs, general counsel for Meritus Trust Company Limited in Bermuda, said: “Shân is referring to section 47 of the Trustee Act 1975. This is a unique provision of the Bermuda legislation that the courts have interpreted to allow the variation of trusts where it is expedient.”

He said Ms Warnock-Smith had observed that the Bermuda legislation permits variations that can impact beneficial interests.

“Cayman is not the only jurisdiction that has seen migration of trusts to Bermuda, it occurs with other jurisdictions such as Jersey and Guernsey. These other jurisdictions are looking at enacting legislation that will allow their courts to handle similar applications,” said Mr Krebs.

Meanwhile, Mr Moran, a business development manager for the BDA, whose remit includes trusts, said: “Trustees of vehicles set up in other locations are increasingly looking to change the administration of trusts to Bermuda so they can avail themselves of the flexibility of our laws — in this case, the ability of our courts to vary the beneficial interests under a trust.”

He added: “Our trust practitioners and lawyers, in partnership with the BDA and government, are continually looking for ways to keep our legislation modern and commercially sensible. Bermuda has a great track record and reputation for this.”

The subject of trusts, and how Bermuda sells itself to the sector as a preferred destination, will be the topic of a discussion session at the 2015 STEP Bermuda Conference on Thursday.

Mr Moran will chair the session, with a panel of guests that includes Mr Krebs. It will be the final session of the daylong event, which is being held at the Bermuda Underwater Exploration Institute.

You must be registered or signed-in to post comment or to vote.

Published Oct 13, 2015 at 8:00 am (Updated Oct 12, 2015 at 7:44 pm)

Bermuda winning trust business from Cayman

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon

  • Take Our Poll

    Today's Obituaries