House: economic substance may help Bermuda
The race to come in line with international standards has left Bermuda in a strong position, the finance minister said.
Curtis Dickinson told the House of Assembly on Monday that last year had been a “transitional” year with a degree of uncertainty about how new legislation would affect the island.
Mr Dickinson said: “We were all here for the mad rush to get economic substance passed in late December of 2018 and no one was putting any money on what the impact of that legislation would be.
“We had a couple of interesting things happen in 2019. We had the black listing, the grey listing and then the white listing.
“We also had, probably unbeknown to most members of the public, a similar set of assessments being done by the Organisation for Economic Co-operation and Development around our economic substance regime, which we passed with flying colours.”
He added: “For a number of companies 2019, even for a number of practitioners in the industry, was kind of ‘hold on to your breath and hopefully the floor doesn't fall out'.
“People were not making aggressive pushes to recommend Bermuda because they were unclear about a number of things.”
Mr Dickinson said that while Bermuda has landed on the white list, the Cayman Islands found itself on the black list, which could present opportunities for Bermuda.
He said: “We may see an uptick of activity as a result of that black listing.
“While I am not advocating this, I am sure many of my private sector former colleagues are out there sharpening their marketing pencils and positioning this jurisdiction as best they can.”
Mr Dickinson said the number of inquiries about economic substance had increased and Bermuda has positioned itself well as a high-quality jurisdiction.
He added: “I think with the benefit of hindsight, economic substance may be a good thing for us.”
Mr Dickinson said economic substance would not silence the “nonsense” political narrative of the island as a tax haven, but Bermuda must continue its commitment to best practice and meeting international requirements.