Flag of Bermuda>

Economy and Banking Sector of Bermuda

Bermuda
Location
North Atlantic Ocean
Population  (2010)
64 237
EU Status
not part of the EU (OCT)
Currency
BMD (Bermudian dollar)
Nominal GDP
n/a
Credit Ratings (as of Sep 2016)
A+/A2
Consolidated Banking Assets (2016)
22 700.00 mln USD  (-5.81%)
Deposit Guarantee
25 000 USD
Number of Banks
4

Bermuda is a British overseas territory situated in the North Atlantic Ocean.

The economy of Bermuda is traditionally based on tourism and light manufacturing. In the recent years however, international business has been rapidly increasing its share, making Bermuda a highly successful offshore financial center.

Currently there are 4 banks operating in Bermuda: Bermuda Commercial Bank Limited, Capital G Bank Limited, HSBC Bank Bermuda Limited, The Bank of Butterfield & Son Limited.

List of Banks in Bermuda

National Currency

Bermudian Dollar (BMD)

Since 1970, the official currency of Bermuda is Bermudian dollar (BMD), it is pegged to the United States dollar at a one-to-one ratio: 1 USD = 1 BMD.

Pegged Rate

1 USD = 1 BMD

Credit Ratings (as of Sep 2016)

Fitch Moody's
A+ (high credit quality), outlook stable A2 (upper medium grade), outlook stable

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Bermuda: 0.0 - 0.0%

Withholding tax rates applied on payments of interest and dividends in Bermuda are shown in Table 1.

Dividends Interest
Natural person, resident 0.0 %0.0 %
Natural person, non-resident 0.0 %0.0 %
Table 1. Withholding tax rates in Bermuda.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Bermuda: 4 Signed Agreements

Bermuda signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Bahrain
 Seychelles (Jul 2013)
 United States

There are also several agreements between Bermuda and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):

 Qatar

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 38 Signed Agreements

Bermuda signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Argentina
 Aruba
 Australia
 Canada
 China
 Denmark
 Faroe Islands
 Finland
 France
 Germany
 Greenland
 Guernsey (Apr 2014)
 Iceland
 India
 Ireland
 Japan
 Malaysia
 Malta
 Mexico
 Netherlands
 New Zealand
 Norway
 Portugal
 Singapore
 South Africa
 Sweden
 United Kingdom
 United States

There are also several agreements between Bermuda and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):

 Belgium (Apr 2013)
 Brazil
 Curacao
 Czech Republic
 Indonesia
 Italy
 Korea, Republic of
 Poland (Nov 2013)
 Sint Maarten (Dutch part)
 Turkey

Automatic Exchange: Starts in September 2017

Bermuda signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Automatic Excnange: 49 Bilateral Agreements to Receive Information

Bermuda has signed bilateral agreements with 49 jurisdictions to automatically receive information:

 Argentina
 Australia
 Austria
 Belgium
 Brazil
 Bulgaria
 Canada
 China
 Colombia
 Croatia
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Greece
 Greenland
 Hungary
 Iceland
 India
 Ireland
 Italy
 Japan
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 San Marino
 Seychelles
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 United Kingdom
 Uruguay

Automatic Excnange: 0 Bilateral Agreements to Send Information

Bermuda has not singed any bilateral agreements to automatically send information.

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Bermuda
IGA in effect since 19 December 2013, Model 2

Bermuda has FATCA agreement with the U.S. in effect since 19 December 2013 (Intergovernmental Agreement Model 2).

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
25 000 USD

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Bermuda are summarised in Table 2.

Scheme Participantsall credit institutions operating in Bermuda (including branches of foreign banks), branches of Bermudian banks abroad
Eligible Depositorsnatural persons, small businesses
Maximum Protected Amount25 000 USD
Paid In CurrencyUSD

Table 2. Deposit guarantee scheme in Bermuda.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Bermudian dollar) Foreign Currency
Aa3 (high grade) A2 (upper medium grade)

Local currency (Bermudian dollar) deposit ceiling for Bermuda is set to Aa3 (high grade), foreign currency deposit ceiling is A2 (upper medium grade).

Banking Supervision

Bermuda Monetary Authority

Banking Sector Structure

Number of Banks
4
Consolidated Assets (2016)
22 700.00 mln USD  (-5.81%)

Currently there are 4 credit institutions operating in Bermuda.

In 2016 consolidated banking assets in Bermuda were 22 700.00 mln USD. The consolidated banking assets' evolution is shown at Chart 1 below.

Consolidated banking assets in Bermuda.

Chart 1. Consolidated banking assets in Bermuda.