Ensuring international business has the infrastructure, and goodwill, to survive tough economic times and to continue to achieve a high level of prosperity is essential for Bermuda's economic survival in the next six years, according to the Bermuda First Committee.

Its report, "Continuing Bermuda's Economic Miracle", which was released yesterday, canvassed 66 leaders of commerce, non-profit organisations and the public sector in order to determine what changes needed to be made to the Island's economy.

The industry leaders rated Government performance as "weak" and "in need of significant improvement" when it came to accountability and meeting the needs of companies — two areas they said are of "very high importance to businesses".

The international business and financial sectors account directly for 48 percent of Bermuda's economy and another 20 percent of the economy through their demand for goods and services from other sectors, and employ 12,000 people, the report stated.

It added: "From 1997 to 2007, Bermuda's GDP grew at 7.7 percent per year, much higher than that in most of the developed world. Over this interval, international business activity and financial intermediation grew at an impressive rate of 14.8 percent and 9.9 percent per year, respectively.

"These two sectors pulled up the rest of the economy, more than compensating for the much slower growth in the tourism sector, which used to be an even more important part of Bermuda's economy."

But the report noted that many Bermudians seemed unaware of the contribution this sector makes to Bermuda, informing Bermudians about its importance was key to ensuring continued success.

"Since the general public is largely unaware of these facts, public policy debates often hinge on misperceptions about what is ultimately important to the welfare of the broad base of Bermudians," the report stated.

"Anti-business rhetoric by public figures in Bermuda is often picked up and transmitted by the international business press, thereby undermining Bermuda's reputation as an attractive place to conduct business."

One of the key planks of the proposals to ensure international business continues to prosper on the Island was extending the exemption of corporate tax past 2016.

The report stated: "The exemption of international business from corporate tax is one of Bermuda's most powerful appeals. The exemption will remain in effect until 2016, but businesses are uncertain about whether it will be extended or allowed to lapse, and policymakers have not provided definitive signals in either direction.

"As a result, some businesses have begun factoring the risk of losing the tax exemption into their current decision-making about how much capital and how much of their business operations to commit to Bermuda."

It added that if extended, the exemption would lead to additional businesses remaining on the island, but it could hurt Bermuda's effort to explain to the rest of the world that it is not a tax haven.

Bermuda First co-chairman Premier Ewart Brown said the recommendation was "under consideration".

Waiving term limits and work permits for occupations that historically have permits approved 100 percent of the time was also recommended. Co-chairman Don Kramer said this was important to ensure Bermuda kept international talent in Hamilton.

Three of the recommendations had to do with streamlining and increasing the coordination between the Ministry of Finance and Bermuda Monetary Authority, which would enable them to better anticipate and influence policy changes by foreign governments and regulators, especially on matters of tax and regulation.

The report said that both bodies were working hard and making significant progress stating Bermuda's case in international circles on tax issues, but that there was room to do more. Working together would ensure there was no overlap and the correct message was being disseminated.

In particular it recommended: "These groups should align on (a) establishing deeper relationships with European policymakers and regulators, (b) using a common set of talking points during all interactions abroad, and (c) conducting joint trips abroad."

To do so the report said extra resources should be provided to the Ministry and BMA "either through taxes or fees charged to international businesses".

It added: "The Ministry of Finance may well need additional personnel to establish and maintain constructive relationships abroad and to continue to negotiate agreements and keep pace with evolving international regulatory standards.

"The BMA may well need additional technical personnel to analyse company data and share technical information with foreign regulators. These organisations could obtain these resources through direct hiring, external contracting, or secondment from industry."

The report also suggested that due to the Island's strong legal system and geographic location it should look at becoming an international arbitration centre, which would generate fee income and bolster Bermuda's reputation as a responsible financial hub.

The report also recommended Bermuda pursue new insurance and reinsurance lines such as worldwide aircraft and ocean marine insurance lines which both garner about $3 billion in premiums each year. Another way to bolster the economy would be to attract more asset-management funds and fund administrators and become an intellectual property centre.

The report also recommended the Island grant generous multimillionaires permanent residency, adding: "Bermuda should consider providing permanent residency to wealthy individuals and their children if those individuals commit to investing large amounts of money in Bermudian businesses or making substantial charitable contributions, for example by building schools or medical facilities."

To see the complete report, click here