Branch Operations and Permit Companies
A foreign corporation that is seeking to establish a Bermuda branch or physical presence in Bermuda from which it can carry on a trade or business may do so by obtaining a permit from the Minister of Finance pursuant to Section 134 of the Companies Act, 1981. Such entities are referred to as ‘Permit Companies’ in Bermuda. Examples of circumstances in which permits have been issued pursuant to Section 134 of the Companies Act, 1981 include:
- Where the applicant company wishes to take advantage of benefits it enjoys in its country of incorporation but needs a presence in Bermuda for other reasons
- Where it can be costly for the applicant company to liquidate in its home jurisdiction and re-establish in Bermuda
These branch operations are called “Permit Companies” in Bermuda and, like Exempted Companies, will upon application receive an undertaking from the Minister of Finance exempting them from all forms of taxation on income, capital appreciation or gain, stamp duty or other form of taxation until 2035 or such further period as extended from time to time by the Exempted Undertakings Tax Protection Act.
A number of foreign insurance companies that were formed in countries that had favourable tax treaties with jurisdictions where the premium originated have obtained Permits from the Minister of Finance to carry on their business activities in Bermuda. This is because of Bermuda’s favourable location, excellent insurance expertise, sophisticated banking and professional infrastructure.
A number of foreign companies incorporated in jurisdictions that have a ‘non-resident’ class of company have established branch operations in Bermuda from which business is conducted, by means of the Permit issued by the Minister of Finance.
A foreign corporation wishing to establish a Bermuda branch for a particular part of its business operations may apply to the Minister of Finance for a Permit pursuant to Section 134 of the Companies Act 1981. The detailed procedures involved in the application are set forth in our Memorandum on Permit Companies. For legal assistance with establishing Bermuda branch operations or permit companies, contact our office directly.