by Rebecca ZuillThe Economist Intelligence Unit (EIU) reported today that the growth in Bermuda’s new international companies are primarily investment holding companies “which contribute little to the local economy in terms of employment or government revenue.”The EIU noted the Island has recorded its strongest first half of the year for new company formations for five years, “ ... raising hopes that international business sentiment is responding positively to the centre-right One Bermuda Alliance (OBA) government’s investor-friendly approach to policy.”It stated: “During the first six months of 2013, 565 new companies and partnerships were registered in Bermuda, the highest number of new registrations recorded since first-half 2008. The total number of companies registered was 18,366 at end-June 2013, up 3.7 percent from end-2012.”But, the Economist commented: “ ... a more meaningful impact will come from the rise in local-company registrations and the increase in insurance-company registrations, supporting the island’s largest international industry.”The Economist Intelligence Unit consists of about 100 country experts and economists, most of whom have lived and worked in the region they cover. In addition, a network of contributors report on economic and political events, comment on the business environment and legislative changes, and give their views on political, economic and social trends.The EIU report on Bermuda included the Ministry of Economic Development report that 422 of the companies formed were international businesses, which represented an increase of 16 percent from the first half of 2012, while the 95 new local-company formations represented the highest January-June figure since 2010. The Bermuda Monetary Authority (BMA, the financial services regulator) reported 34 new insurance-related registrations in the first six months of 2013, representing a 42 percent increase over the same year-earlier period.The EIU said the new company registrations reflected increasing investor confidence and cited the global context of the US economic recovery, the end of the uncertainty brought on by the 2012 US presidential election and the new Chinese leadership.It stated: “At domestic level, Bermuda’s competitiveness has been enhanced by the scrapping of the six-year time limit for foreign workers and the granting of tax breaks to hotel developers and companies hiring Bermudian workers. Efforts to attract international business is being aided by the formation of the Bermuda Business Development Corp.“Efforts to stabilise the public finances through spending cuts and debt management are also acting to reassure business, as concerns over the likelihood of future tax increases abate.”