Exempt companies will now be able to buy hospitality units on hotel properties after the Companies Amendment Act 2010 was passed.

Under the legislation, hotel accommodations can be occupied or rented to people who work for exempt companies on a long-term basis.

Finance Minister Paula Cox told the House of Assembly: "The tourism market is highly competitive these days and is constantly changing. The Honourable Junior Minister for Immigration has highlighted the type of products which are now part of a hotel development project and may be acquired as tourist accommodations including residential suites.

"Hotels which include a residential component are not a new phenomenon. The concept was introduced in the United States in the 90s and is now a key component of most developments."

She continued: "Bermuda must be open to these innovations. In the past Bermuda was one of the prime movers in defining leisure tourism at the turn of the 20th century and we must continue to embrace new ideas and concepts."

Ms Cox said under the legislation, companies may acquire land if sanctioned by the Finance Minister or by entering into a lease not exceeding 50 years. Alternatively, they can enter a letting agreement not exceeding 21 years to provide accommodation for officers and employees with the Minister's sanction.

Exempted companies can acquire land by a lease not exceeding 50 years. They may also enter a lease or letting agreement not exceeding 21 years to provide accommodation for officers and employees with the Minister's sanction.

They are not allowed to acquire land for an extended period of time, the Minister said.

She added the term exempted mean international companies.

Ms Cox said some of the benefits of the amendments include more employment opportunities for Bermudians. She said hotel developers will have access to a wider pool of capital, local companies can broaden their investment in tourism and exempt companies will be able to control their housing costs.

During Friday's debate, Shadow Education Minister Grant Gibbons said: "Cayman Island a long time ago gave up its birthright because it allows international business much more leeway in terms of purchasing property.

"Certainly in retrospect, there were some changes there. It might provide a more welcoming sense to exempt companies. On that particular issue, I haven't canvassed a lot of exempt companies but I went to [the Association of Bermuda International Companies and the Association of Bermuda Insurers and Reinsurers] and it didn't seem to be on their radar."

Telecommunications Minister Michael Scott said: "The reality is that we live in Bermuda. What has happened in Bermuda is that we have built up this brilliant infrastructure and I don't understand why [Dr. Gibbons] strains so much as if he is in breech birth situation over there.

"It's so clear that we have done a great job with developing our infrastructure. Today we have wonderful infrastructure in terms of housing."

Deputy Opposition leader Trevor Moniz said: "We would like to think that this legislation that has come before us today is obviously a fundamental shift in Government policy.

"If it doesn't produce this huge life in tourists, then all we're going to see is that companies are buying houses, we're going to see a shift in people renting. That's what we're going to see."

Minister without Portfolio Zane DeSilva said: "This should be a time when we should be optimistic. We have had announcements in the last several weeks the Lantana, Grand Atlantic. Morgan's Point, Park Hyatt.

"The other side may say we have been hearing that for months. We are not different from any other country. We are all in this business worldwide competing for that dollar.

"We didn't have a new hotel for 35 years under their watch. They have to believe that this is got to be good for Bermuda if these things come to fruition."