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.
|Location||North Atlantic Ocean|
|Population (2010)||64 237|
|EU Status||not part of the EU (OCT)|
|Dependent Territory Of||United Kingdom (British Overseas Territory)|
|National Currency||BMD (Bermudian dollar)|
|Credit Ratings (as of Sep 2016)|
|Fitch||A+||high credit quality, outlook stable|
|Moody's||A2||upper medium grade, outlook stable|
|S&P||A+||upper medium grade|
|Withholding Tax||0.0 - 0.0%|
|Double Taxation Agreements||4 signed agreements|
|Exchange on Request||38 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 19 December 2013, Model 2|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||25 000 USD|
|Country Ceiling for Deposits|
|Local Currency (Bermudian dollar)||Aa3||high grade|
|Foreign Currency||A2||upper medium grade|
|Banking Supervision||Bermuda Monetary Authority|
|Banking Sector Structure|
|Number of Banks||4|
|Consolidated Assets (2015)||24 100.00 mln USD (+4.33%)|
|List of Banks in Bermuda|
Bermuda is one of the OCTs (Overseas Countries and Territories) of the European Union. This means that although its nationals are in principle EU citizens, Bermuda is not part of the EU or directly subject to EU law.
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.
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 applied on payments of interest and dividends in Bermuda are shown in Table 1.
|Natural person, resident||0.0||0.0|
|Natural person, non-resident||0.0||0.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Bermuda signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
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 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
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.
Bermuda signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Bermuda and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Bermuda signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
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).
Bermuda has FATCA agreement with the U.S. in effect since 19 December 2013 (Intergovernmental Agreement Model 2).
FATCA and European countries
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:
All these details about deposit guarantee scheme in Bermuda are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Bermuda (including branches of foreign banks), branches of Bermudian banks abroad|
|Eligible Depositors||natural persons, small businesses|
|Maximum Protected Amount||25 000 USD|
|Paid In Currency||USD|
Table 2. Deposit guarantee scheme in Bermuda.
Deposit Guarantee Schemes in European Territories
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) deposit ceiling for Bermuda is set to Aa3 (high grade), foreign currency deposit ceiling is A2 (upper medium grade).
Currently there are 4 credit institutions operating in Bermuda.