Why Bermuda?

Investment managers have a lot of choices when it comes to setting up a fund. There are many jurisdictions that offer various advantages and disadvantages. However, one jurisdiction that stands out is Bermuda. Bermuda is a small island nation located in the Atlantic Ocean, but it is a global financial center with a long history of supporting the investment management industry. There are many reasons why investment managers should consider setting up a fund in Bermuda, and in this article, we will explore some of the key advantages.

One of the main advantages of setting up a fund in Bermuda is the regulatory environment. The Bermuda Monetary Authority (BMA) is the regulatory body that oversees the financial services industry in Bermuda. The BMA is known for its strong regulatory framework, which is designed to protect investors while also facilitating the growth of the financial services industry. The BMA is committed to ensuring that Bermuda remains a competitive and attractive jurisdiction for investment managers, and it works closely with the industry to ensure that the regulatory environment remains up-to-date and responsive to changing market conditions. In Bermuda, Investment funds can be structured as companies, partnerships, or unit trusts, and there is no requirement for local directors or officers. Additionally, there is no requirement for investment managers to be licensed in Bermuda, provided they are licensed in a recognized jurisdiction.

Another advantage of setting up a fund in Bermuda is the tax environment. Bermuda is a tax-neutral jurisdiction, which means that there are no taxes on corporate income, dividends, or capital gains. This can be a significant advantage for investment managers who are looking to minimize their tax liabilities resulting in higher returns for investors. Bermuda’s tax laws allow for the use of special purpose vehicles (SPVs) and other structures that can be used to further optimize tax efficiency. In addition, Bermuda has entered into tax information exchange agreements with many other jurisdictions, which means that investors can be confident that their tax obligations will be met. Also, Bermuda has a well-established legal system based on English common law, which provides a stable and predictable legal environment for fund managers.

Another advantage of setting up a fund in Bermuda is the ease of doing business. The island has a well-developed infrastructure that is designed to support the needs of the financial services industry. There are excellent telecommunications and transportation links, as well as a modern legal and regulatory framework that is designed to facilitate the establishment and operation of investment funds. In addition, Bermuda has a stable political and economic environment, which provides a level of predictability and stability that is important for investment managers.  In addition, Bermuda is conveniently located between Europe and North America, making it an ideal location for fund managers looking to tap into both markets

Bermuda is also home to a large number of global companies that are active in the financial services industry. These companies provide a wide range of services, including fund administration, legal and regulatory advice, and accounting and audit services. This means that investment managers who set up a fund in Bermuda can benefit from a wide range of expertise and services, which can help to reduce costs and improve the efficiency of their operations.

If you would like more information on setting up a Fund in Bermuda, please email Graham MacDonald  – graham@kensington.bm

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