THE FORMATION OF
EXEMPTED COMPANIES
IN BERMUDA
1. Most exempted companies can be formed by
registration within a week from the date when complete
instructions are received at our offices. To enable our
office to accomplish registration on your behalf, we will
require the following:
(a) the
proposed name of the exempted company, preferably with two
alternative names. The Registry is quite flexible and
allows
registration of names that are case sensitive (e.g.
with certain letters
or words in block capitals), or using
plays on words or letters
Accordingly, please insert the
name as you want it to appear;
(b) a full
description of the intended activities of the proposed
exempted company (as opposed to its objects and powers);
(c) the full
names, including middle names (initials are not acceptable),
residential addresses, occupations and nationalities of all
beneficial owners of the proposed exempted company;
and
(d) Personal
Declarations (as attached), completed and signed by each
beneficial owner, for submission to the Bermuda Monetary
Authority. If the parent of the proposed company is listed
on a recognized stock exchange, these are not necessary.
2. Our standard fees for the formation and
organization of an exempted company, incorporated by
registration, are set out in the attached Form A. These
fees do not include any additional work such as the drafting
of special objects or bye-laws and also do not include
disbursements in connection with the incorporation, which
would be as follows:
(a) An Annual Fee is payable to the Bermuda
Government based
on share capital. US$1,995.00 is charged
on share capital of
US$NIL up to $12,000.00 for each year
the company is in existence
on a calendar year basis, the
first installment of which is due
immediately upon
organization of the company.
If the
company is formed between 11st September and 31st
December the Annual fee for the balance of that year is
reduced by half (i.e. US$997.50).
(b) A fee for
incorporation of $269.00 is payable on application to the
Bermuda Monetary Authority, together with a registration fee
of $80.00.
(c) All
printing, advertising costs (if necessary), corporate
supplies, which normally amount to approximately $500.00.
(d)
Miscellaneous disbursements of approximately $80.00 (faxes,
long distance calls, photocopies, etc.).
3. An exempted
company is entitled to apply for an undertaking from the
Bermuda Government for an exemption from tax in the event of
direct taxation being introduced through the legislature,
such as corporation or dividend tax, income or capital
asset, gain or appreciation tax or tax computed on profits.
This undertaking, or statutory guarantee, is provided for
under The Exempted Undertakings Tax Protection Act, 1966 and
is valid until March 20, 2016. A fee of US$165.00 is
payable to Government for this tax exemption, which is
optional.
4. Apart from the above, there are no fees or taxes
payable in Bermuda by the exempted company.
5. The annual
running expenses of an exempted company will be as follows:
(a) the Annual
Fee mentioned above.
(b) costs for
the provision of directors, secretary and registered office
of the corporate client. (Bermuda law requires that an
exempted company have a registered office in Bermuda at
which the corporate and financial records must be
maintained).
It is also a requirement of Bermuda law that a company have
(a) a minimum of two directors, ordinarily resident in
Bermuda; or (b) a secretary who is ordinarily resident in
Bermuda and a director, other than an alternate director,
who is ordinarily resident in Bermuda; or (c) a secretary
(who is not a director or the resident representative) who
is ordinarily resident in Bermuda and a resident
representative; or (d) in the case of a company the shares
of which are listed on an appointed stock exchange, have a
resident representative. Our firm will be pleased to
provide these services under normal circumstances. It is
necessary to supply the full names, residence addresses,
occupations and nationalities of all intended directors and
officers.
Our fees
for the provision of some or all of these services depend
upon the responsibility and activity involved, and are
normally settled by negotiation. Therefore, it is difficult
at this stage to give a pre-estimate of such fees, although
our minimum annual service fee is US$3,500 for the provision
of corporate secretarial services and registered office.
This is charged separately from the incorporation fees and
is usually pro-rated to the end of the current year.
(c) Bermuda
law specifically requires an exempted company to maintain at
its registered office in Bermuda, records of its financial
affairs sufficient so as to show a true accounting on a
quarterly basis and further, that such accounts be audited
each year (subject to deferral). There is no requirement
that such audited accounts be filed with any governmental
authority or body, nor are they required be made available
for inspection.
With
regard to those exempted companies writing insurance,
governmental policy presently requires that their capital
must be at least the minimum specified for the types of
risks to be written (ranging from US$120,000 to US$370,000),
and this should be discussed with the proposed manager of
the insurance company.
6. There is no legal requirement (other than in the
case of those exempted companies writing insurance) that the
share capital be fully paid up. Alexanders only insists
that the share capital be fully paid up where we are
requested to act as nominees for a beneficial owner or
owners.
Should the need arise, the
capital can be increased by simple resolution of the
shareholders. In the case of insurance companies,
particular attention should be paid with regard to the
minimum solvency margin, written premium ratio and
admissible assets to ensure the proposed exempted company is
within the Regulations of the Insurance Act, 1978, as there
is a rigid governmental examination of these types of
applications to ensure that they meet the minimum standards
of the regulations.
7. All Bermuda exempted companies are normally
designated by Foreign Exchange Control as “non-resident” for
exchange control purposes, which means that these companies
are free to deal in any currency of their choosing (other
than Bermuda dollars) and thus are in effect completely free
from all exchange control regulations.
8. In keeping with Bermuda Law and International
requirements regarding Money Laundering and Proceeds of
Crime, we are required to obtain satisfactory information
regarding our clients before commencing a relationship.
This information ensures that we are able to keep in close
contact and provides protection for confidential
arrangements. Accordingly, we require the following
information on the ultimate beneficial owners of accounts
established with us:-
(1) A certified copy of a current photographic
identification (e.g. photo page of passport or valid
driver’s license).
(2) Permanent and alternate addresses and contact
numbers (i.e. street and mailing addresses, telephone, fax,
pager, cellular phone, email).
(3) A minimum of two references attesting to
integrity and financial standing. References relating to
integrity will be accepted from professionals (e.g. lawyers
or accountants) while letters relating to financial standing
will usually be from a bank or financial institution. They
should include statements regarding the length of time of
relationship which should preferably be over three years.
In the case of the Bank of N.T. Butterfield all references
must be for relationships of over five years. For those
companies whose ultimate beneficial owners are publicly
listed companies, references are not required. In the case
of non-public companies, background information is required
on:
(a) the source of monies being used to fund the
client’s arrangements, and
(b) confirmation that professional tax advice on the
proposed structure has been obtained in appropriate
jurisdictions.
(4))
Biographical information such as a resume or
curriculum vitae.
N.B. The above information is treated as
confidential and would only be disclosed to third parties
under process of law or in connection with
required transactional procedures in connection with the client’s affairs (e.g. to support opening of
bank accounts).
Please download the Exempt Company
Incorporation Questionnaire (pdf) below and
fax the completed form
to (441) 292 2024
 |
