LONDON -- The international corporate world is talking about a new Bermuda triangle; one that is linking global corporations and telecoms upstarts based offshore with mainland investors and takeover targets via the US or London stock exchanges.

A series of billion-dollar telecoms deals have originated from Bermuda these past weeks. And today there is talk of yet another high profile mega-merger, this one involving a possible $3.5 billion takeover of Britain's Williams Holdings by Bermuda-based Tyco International. Williams, maker of Chubb alarms and Yale locks, confirmed Press speculation on Monday that it was in talks with Tyco.

Bermuda already surprises many people when they discover that insurance and financial services, not tourism, is the biggest industry. Lately it has been attracting a new kind of growth industry. A slew of cable, satellite and Internet start-ups, including Global Crossing, Iridium, Globalstar and Britain's ICO, which are all competing to launch phone systems that roam anywhere, have all opted for a Bermuda base.

So has Tyco, the US security systems and cable group, and Project Oxygen, which plans a global underwater fibre-optic network. The Island also recently welcomed its first major player in the promising world of offshore e-commerce.

"As we become a global company, and derive income from hundreds of different places, it makes sense to be in a location that has neutral and favourable tax treaties with as many different countries as possible,'' said Mac Jeffery, communications director for Globalstar, which is in the satellite phone business.

There is no arguing that the favourable tax system and escaping government bureaucracy is the main advantage of a Bermuda domicile.

But why have these global corporations chosen Bermuda to set up office and not one of the many other offshore financial centres? The Cayman Islands, Barbados and the Channel Islands are also favourite domiciles of foreign companies looking for tax breaks, banking confidentiality and less red tape; and they are cheaper to operate than in Bermuda, where the average wage is nearly $700 per week.

The answer, according to corporate big wigs, is that Bermuda has been able to offer credibility, good communications and modern infrastructure along with its zero income and corporate tax. Bermuda's clean image is important because, to a large degree, these communications start-ups must raise the money to build their networks in the sky and under the sea through the sale of shares.

The Island has escaped the corruption and fraud scandals that have plagued some Caribbean islands, largely because it has not allowed offshore banking in, and it has rigid know-your-client laws to counter money-laundering. It was also one of the first offshore centres to set up a monetary authority.

"Bermuda has always been very selective about who it allows to incorporate here,'' says Shadow Finance Minister and businessman Grant Gibbons. "Here we have 10,000-odd companies, where in other jurisdictions there are tens of thousands of companies.'' Bermuda proves magnet to companies Tyco and Global Crossing left Wall Street buzzing last month after clinching two merger deals from their Bermuda offices worth a total of $40 billion.

They are both counting on strong gains in their share prices to finance the takeovers.

Tyco, whose products range from fire alarms to undersea fibre-optic cables, bought its 100th company, America's Raychem, for $2.9 billion from its small four-person office in Hamilton. The company lists on the New York, London and Bermuda stock exchanges Brad McGee, senior vice-president at Tyco International, said the Tyco board actually flew to Bermuda to finalise the deal.

He said his company's Bermuda location came out of its merger a few years ago with ADT, the security business built by Michael Ashcroft, the Tory Party treasurer treated with a great deal of caution by the City and who is known for his fondness for exotic tax havens. Ashcroft sold off ADT for $5.4 billion, pocketing $250 million himself, after a controversial hostile bid by Western Resources.

"We're going to stay in Bermuda,'' Mr. McGee says. "There are some tax advantages of being in Bermuda and we're very active here from the standpoint of charitable work. Plus we like it.'' Global Crossing, which acquired US West for $37 billion, has spent almost $50 billion from its Bermuda headquarters in the past year, morphing into a global giant from a fledgling firm. Not to be accused of being a paper company, it recently went on a recruiting drive in Bermuda, hiring a number of Bermudians, and opening a 50-person customer service centre on the island. This was confirmed by Global Crossing chief executive officer Robert Annunziata.

"Most international cable operators do come to Bermuda because the Government there treats them favourably,'' said Mr. Annunziata, who achieved the remarkable feat of making $90 million in the 90 days that he has been with the company. "Personally, I go there as much as I can -- just for the weather.'' Not all the news out of Bermuda is good. Iridium, which with its $5 billion network in the sky was the first company to offer a satellite phone service, has struggled with technological delays and in finding customers. Shares have fallen from a high of $61 to a current low of about $8. To save itself from the danger of disappearing in the Bermuda triangle it must prove to its lenders by June 30 that it can meet certain customer and revenue targets.

Granger Whitelaw, the chief executive of EOCnet.com, which launched itself from Bermuda last Thursday selling "e-suites'' to Internet businesses, says Bermuda is known in corporate circles as the Rolls-Royce of offshore centres.

"In a nutshell, Bermuda possesses something beyond what the casual tourist sees,'' he says. "It has a forward-thinking, progressive Government, with lawmakers who are business-savvy and business-friendly. "It also has the only US SEC-recognised offshore stock exchange,'' Mr. Whitelaw says. "Cayman simply does not have the same level of regulatory and legal environment.'' David Ezekiel, head of the Chamber of Commerce international companies division, said corporations wanted a domicile that had both sufficient internal regulation but at the same time gave them freedom to do as they wish.

They also liked Bermuda because it had intellectual capital on-Island, a good school system, British-based legal system and sophisticated infrastructure compared to the Caribbean.

"If you are going to send some senior people down here, Bermuda is a great place to live,'' he said. "It is a lot more cosmopolitan that the Caribbean and it is only one and a half hours away from the US East Coast.

"Certainly from the North American viewpoint, Bermuda has become the domicile of choice.'' Robert Annunziata David Ezekiel