Bermuda thriving amid tax transparency drive
The tax transparency drive led by the world’s largest economic powers is effectively helping to drive business to Bermuda, according to a top lawyer with an international firm.
Steven Rees Davies, corporate partner with Appleby Bermuda, said the fact that Bermuda had kept pace with international regulatory changes allowed the island to differentiate itself from less advanced offshore jurisdictions.
“Bermuda has earned an excellent reputation for regulatory standards because of the high standards the Bermuda Stock Exchange and the Bermuda Monetary Authority have put in place, which has positioned the island as a blue-chip jurisdiction that companies want to do business with,” Mr Rees Davies said.
“And these companies are seeking a jurisdiction with a reputation that matches theirs. Some have come to us saying they want to move from another jurisdiction to Bermuda because they are becoming more sensitive to risk.”
Appleby announced last month that it had advised on a $200 million public offering and listing on the BSX of British Virgin Islands-based Waterloo Investment Holdings Ltd, which has hospitality, banking and investment interests in the Caribbean and Central America. Also advising on the deal was the Bermuda office of Estera, an offshore management and administrative services firm formed by a spin-off from Appleby last year.
Waterloo was the latest in a string of debt and equity listings on the BSX by international companies that the two firms have advised on over the last 18 months, with a listing value of $453 million. The listings include Madison Point Holdings SA (Luxembourg), Hawley Group Ltd (BVI), Normandy Ltd (Bermuda) and ABM International (Holdings) Ltd (UK).
Sherman Taylor, Estera Bermuda associate director, said: “We are absolutely seeing a rise in the number of inquiries and in addition to that, an uptick in the number of requests to carry out instructions.”
Much of the interest from coming from Europe and Latin America, he said. Official recognition of the BSX by the Irish tax authorities, announced in January this year, had helped to boost interest in listings from Europe.
The island had a reputation for innovation in financial services, exemplified by it emerging as a world leader in insurance-linked securities over the past six years.
“Bermuda is open for business and the BSX is always open to listen to what people want,” Mr Taylor added.
The Organisation for Economic Cooperation and Development, a club of rich countries, has led international efforts to clamp down on secrecy jurisdictions and improve tax transparency. This had created problems for some financial centres, but for Bermuda, it had created opportunities, Mr Rees Davies said.
“Bermuda has never had secrecy laws, so the move towards greater transparency is simply promoting what we already do,” Mr Rees Davies said.
“The Bermuda Government has been excellent in securing tax information exchange agreements and has been fully involved with the OECD in working towards the goal of tax transparency.”
Prospects were good for Bermuda’s future, Mr Rees Davies added, although much could change in the world with the ongoing process of Britain’s departure from the European Union and elections in the US and Bermuda also imminent.
“A lot is going on in the world and locally that will affect everybody’s view,” Mr Rees Davies said. “But we in Bermuda are well positioned for whatever the future brings. We have put ourselves in a place in which we can provide people with what they may be missing elsewhere.
“From our perspective, it’s a positive outlook.”
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