Fee for permit companies increased
Overseas corporations will end up paying a considerably higher fee to reduce their tax liability by running their business through Bermuda.
While the practice contains “nothing whatsoever illegal”, finance minister Bob Richards said the island had taken flak in the international press for the arrangement, and deserved to charge higher. From the old fee of $1,995, the charge to set up a Bermuda “branch” is jumping to $25,000.
“There are companies incorporated in other countries that have a branch in Bermuda — many of these are part of elaborate global arrangements for multinational corporations which use it to shelter billions of dollars,” Mr Richards said.
“When I saw how much the treasury was actually getting for its trouble, it was totally out of proportion.”
Permit companies have been allowed under the island’s regulatory framework for decades, and are tightly vetted.
However, they have been “at the eye of the international storm”, drawing accusations that the island was a tax haven.
Mr Richards told Parliament that the defence against reputational risk came at “significant cost”. “If there were evidence of unlawful activities, we would not allow them to use Bermuda as a platform,” he said.
“However, in view of the current transatlantic crossfire over multinationals’ tax burden, their presence in Bermuda has meant that our excellent international reputation has become a casualty — a reputation which the Government has a duty to staunchly defend.”
Incorporation fees for setting up an exempted company, meanwhile, have been left alone.