The days of the 60/40 ownership rule appear numbered after Finance Minister Bob Richards declared it was blocking foreign investment which could restore Bermuda to prosperity.

In his Budget Statement, Mr Richards described the regulation — which guarantees majority Bermudian ownership of companies — as a relic of the old oligarchy’s attempts to maintain their economic dominance.

He dismissed calls for it to be retained to prevent an influx of foreigners as political scaremongering.

“Perhaps living on a small island in the middle of the ocean means the fear of being overwhelmed by outsiders is in our DNA,” the Minister told the House of Assembly.

“Those who want to hold on to protectionist rules appeal to that fear. But the facts speak for themselves. Historically, foreign participation in Bermuda, both by way of capital and people, is what helped Bermuda grow from a sleepy, isolated community to a highly developed, sophisticated country.

“The infrastructure for tourism, for example, the airport, the hotels, hotel management expertise and of course the tourists themselves were all foreign-sourced. And then there is international business — surely the term speaks for itself.

“The bottom line fact is that a successful and vibrant Bermuda economy, which Bermudians want to participate in, cannot occur without the participation of the outside world.

“And yet we have rules such as the 60/40 ownership rules that hinder the inflow of investments that are needed today to power recovery that can restore hope, opportunity and jobs for our people.

“The truth is the 60/40 rules were established by the old oligarchy to protect their own interests; to enable them to retain their position of economic dominance. So the sources of the calls for the retention of the 60/40 rule are most ironic.”

In recent years the 60/40 rule has been relaxed for BSX-listed companies such as KeyTech, BF&M and Argus Group.

Yesterday, Mr Richards questioned what mess Bermuda would be in if 60/40 had been retained in telecommunications and the banking system.

He added: “Today’s Bermuda needs capital to recover and there is only one place to get it: from outside Bermuda. So people who try to stir up the fear of being overwhelmed by foreigners do so only for political gain.

“Bermudians have a choice: either we acquire the fuel we need from abroad to power ourselves back to growth and prosperity or we allow political demagogues to trap us with our own fears. This Government chooses growth and prosperity not fear and stagnation.”