Rules to head off European concerns about businesses that might set up shop on the island in name only to dodge taxes were tabled in the House of Assembly.

The legislation, tabled by Curtis Dickinson, the Minister of Finance, will require businesses registered in Bermuda to have “a substantial economic presence” on the island.

The Economic Substance Bill 2018 was designed to protect Bermuda from sanctions from the European Union over corporations that reap the benefits of an offshore jurisdiction without conducting business in them.

Corporations will have to declare their compliance to the Registrar of Companies, and will be required to provide details to the authorities of relevant EU states where the owner or holding entity is registered. The Bill also includes clauses for the protection of confidential business information.

The penalty for giving false information to the Registrar would be a fine of up to $10,000, or two years' imprisonment, or both.

The Bill also gives the Registrar recourse to the courts in cases where companies fail to meet economic substance requirements.

The legislation, which will be debated by MPs at a later sitting of the House, was tabled in a bid to keep Bermuda off an EU blacklist of uncooperative jurisdictions.

The requirements for companies will include employment of staff — which will hit worldwide giants such as Google, which at present channels about $18 billion on the island every year.