Bermuda should be proud of its what it has achieved and not be ashamed of its tax status, according to Veronique de Rugy, a tax expert at the Washington think-tank, the Cato Institute.

And she said that the Island should not give in to bullying from the United States on corporate inversions, as the US was at fault for having an unfair tax policy in place that was forcing away business.

Ms Rugy, a fiscal policy analyst at Cato, was the keynote speaker at yesterday's Bermuda International Business Association annual lunch and gave an impassioned speech about the right of sovereign nations to decide their own tax policy.

"Bermuda is a mystical place to me, a place that is very rich and successful," she said. "This is the kind of model we want to build upon."

Speaking after the conference Ms Rugy, who was on her first trip to Bermuda, said that she had been following Bermuda since the corporate inversions issue raised its head in the States, the OECD started blacklisting countries and the European Union was looking at exchange of information.

She said: "You should be proud of your accomplishments and there is nothing to be ashamed of. Good for you, Bermuda!"

Ms Rugy works as tax analyst for the Cato Institute, which was founded in 1977 by Edward H. Crane and is a non-profit public policy research foundation headquartered in Washington, D.C.

The Institute is named for Cato's Letters, a series of libertarian pamphlets that helped lay the philosophical foundation for the American Revolution.

The institute seeks to broaden the parameters of public policy debate and is an advocate of limited government, individual liberty, free markets and peace.

Ms Rugy was introduced as a "great defender of Bermuda for the past few years when it has at times seemed we have had few friends out there," by outgoing BIBA chairman Jeffery Conyers.

"I will always be a big defender of Bermuda," she told the two hundred business men and women and politicians attending the lunch. And she said that the tax issue was close to her heart as "an oppressed French tax payer."

Ms Rugy went on to say as a French woman she had to pay income tax of 56 percent and put up with strikes all the time. Her American friends urged her to move across the Atlantic, citing lower taxes as a lure for her to make the move.

"It was come over, you are welcome," she said. And while it was seen by her American friends as only right to move for tax reasons to the US, when it came to companies making the same decisions, they were frowned upon and called greedy and unpatriotic.

"When they do this we are told that by moving to Bermuda they are doing something that is wrong," she said. "We are told that Bermuda is allowing something wrong to happen."

And she said as a result Congress was trying and had been trying for some time, to get bills passed to stop repatriation.

"I strongly believe in the right of people to move and move even if it is for tax reasons," she said. "Tax competition is a very liberating force in the world."

Ms Rugy said that instead of blaming Bermuda and saying that moving offshore was unpatriotic, the question had to be asked, "why are companies moving to Bermuda?".

And she made the analogy of a pond full of ducks at the bottom of the garden, and if you kept shooting the ducks, they would soon all fly away or be dead.

"The US has been shooting the ducks," she said, saying that the US' double taxation on businesses - where US companies overseas not only have to pay local taxes but US taxes, was the root of the problem.

She went on to say that the US had the second highest income tax in the world - higher than Sweden and France. "And to be higher than France, that is something."

Ms Rugy added: "Is it (corporate inversions) illegal? No it is not illegal. It is no more illegal than me moving from France to the US."

"Has Bermuda done something wrong? No, of course not. I still believe in a country's right to be sovereign. Bermuda is a very tiny country and cannot compete with the US an Europe on issues such as infrastructure. So what can Bermuda compete with is with capital, investment and financial services."

And she said it made sense to have competitive taxes on the Island to help bring in business.

Ms Rugy pointed out that Bermuda has very strong know your customer policies and had kept its jurisdiction's name clean by its anti-money laundering policies.

And she said that there had in fact been little money laundering offshore compared to the main money laundering centres of the world - the US and the UK.

She also said that the US public was misinformed because they had read the New York Times, but once it was explained to them why companies made the move, it made sense.