Bermuda Partnerships and Exempted Partnerships
Two or more partners may form a Bermuda exempted partnership upon application to the Bermuda Monetary Authority (‘BMA’). Partners may be individuals or corporations and a Personal Declaration Form must be completed by each such partner and submitted to the BMA with the formation application. If a partner is a corporate entity, a Personal Declaration is required on the ultimate beneficial owners of the corporate entity. If the corporation is a public company, the BMA requires the Annual Report of that company.
The application form for a Bermuda exempted partnership involves (i) the application for consent and ii) the registration of the Partnership Agreement.
The application for consent requires the following:
Once the consent is given to the above application, the partnership is required to be registered and the partners must supply the Registrar of Companies with the certificate of exempted partnership, the consent of the BMA and a copy of the Partnership Agreement or Articles of Partnership. Upon registration as aforesaid, the Registrar issues a Certificate of Registration.
Exempted partnerships may also register as Limited Partnerships under the Limited Partnership Act. A Certificate of Limited Partnership is issued to the partnership upon filing the Articles of Partnership with background and compliance details on the general partner.
When the exempted partnership seeks to be registered also as a Limited Partnership, the application is made at the same time as the application for consent under the Exempted Partnership Act. There is no requirement to disclose the names of the limited partners under Bermuda law. The BMA’s consent would be forthcoming upon the approval of the general partner.
A certificate is then issued by the Registrar upon filing the BMA’s consent indicating that the partnership is also a Limited Partnership.
Exemption from Taxes, Stamp Duty
An exempted partnership (whether general or limited) falls within the definition of “exempted undertakings” in Bermuda, and such entities are exempt from all forms of income, capital gain or appreciation, withholding or other form of taxation in Bermuda upon application to the Minister of Finance. Also, exempted undertakings are exempt from stamp duty on their transactions except with respect to Bermuda property (i.e. leases or fee simple acquisitions of Bermuda commercial or residential real estate).
Overseas Partnerships: Permit Application
Bermuda law permits foreign partnerships (whether limited or general) to obtain a Permit in Bermuda pursuant to the Overseas Partnerships Act 1995. Such a permit enables overseas partnerships to conduct business from Bermuda. Persons seeking to obtain such a permit are required to provide similar information to the Minister of Finance as exempted partnerships (mentioned in this letter), including the general nature of the business being conducted, the law governing overseas partnership, the address outside of Bermuda of the principal place of business (if any) and the term or duration of the partnership.
For detailed information on the Formation of Bermuda Exempted or Limited Partnerships or the registration of Overseas Partnerships, download our Memorandum on Bermuda Partnerships. Contact us for legal assistance with the formation and registration of partnerships.