Bermuda — Offshore Financial Center and Regulatory Framework

Bermuda is a British Overseas Territory and one of the world's leading offshore financial centers, particularly in the insurance and reinsurance industry. The Bermuda financial center is supervised by the Bermuda Monetary Authority (BMA) as its sole regulator, overseeing banks, insurance companies, investment funds, and the emerging digital asset sector.

• Insurance market: Third-largest reinsurance market globally, home to numerous captive insurance companies; the commercial (re)insurance regime has held full EU Solvency II equivalence since 2016
• Anti-money laundering: BMA as AML/ATF regulator under the Proceeds of Crime Act and AML/ATF Regulations
• Tax law: Historically no income tax, corporate tax, or capital gains tax — funded via payroll tax and customs duties; however, the Corporate Income Tax Act 2023 introduces a 15% corporate income tax for affected multinational groups (revenue ≥ EUR 750M) for fiscal years beginning on or after 1 January 2025 (OECD Pillar Two)
• Digital assets: Pioneer with the Digital Asset Business Act 2018 (DABA)
• International compliance: FATF-compliant, British Overseas Territory standards, OECD CRS participant

Bermuda's development as an offshore financial center began in the 1940s with the establishment of international companies attracted by the tax-free environment. The founding of the Bermuda Monetary Authority in 1969 laid the foundation for modern financial regulation. Through the 1970s and 1980s, Bermuda grew into the world's leading jurisdiction for captive insurance and achieved a dominant position in the reinsurance market.

The enactment of the Proceeds of Crime Act 1997 and its subsequent amendments established a robust AML regime meeting international standards. Bermuda was placed on the OECD's list of cooperating tax jurisdictions in 2000 and has since concluded numerous Tax Information Exchange Agreements (TIEAs). With the Digital Asset Business Act 2018, Bermuda positioned itself as one of the first jurisdictions globally with a comprehensive regulatory framework for cryptocurrencies and digital assets. The implementation of CRS (2017) and the FATCA agreement (2013) fully integrated Bermuda into the international tax information exchange network.

The BMA, as Bermuda's sole financial regulator, supervises all financial intermediaries:

• Licensed banks and deposit-taking institutions
• Insurance companies — Class 1 through Class E (captives to large reinsurers)
• Investment funds and fund administrators
• Trust companies and corporate service providers
• Money service businesses
• Digital asset businesses (crypto exchanges, custodians, stablecoin issuers under DABA)

Bermuda's commercial insurance and reinsurance regime was granted full EU Solvency II equivalence by the European Commission (Delegated Decision (EU) 2016/309, retroactive to 1 January 2016). Bermuda is, alongside Switzerland, one of the few jurisdictions with full equivalence.

• BMA licensing for all financial institutions, insurers, and digital asset businesses
• Compliance with the Proceeds of Crime Act and AML/ATF Regulations
• Customer Due Diligence (CDD) and ongoing monitoring per BMA guidelines
• Reporting of suspicious transactions to the Financial Intelligence Agency (FIA)
• Registration and compliance under the Digital Asset Business Act (DABA) for crypto businesses
• Meeting economic substance requirements under the Economic Substance Act 2018 and the Economic Substance Regulations 2018 (effective 1 January 2019) for entities carrying on relevant activities
• Implementation of CRS for automatic exchange of information
• Compliance with FATCA agreement (IGA Model 2) with the United States

The entry omits the economic substance requirements (Economic Substance Act 2018 and Regulations 2018, effective 1 Jan 2019). They apply to all Bermuda-registered entities carrying on 'relevant activities'.

The entry emphasizes Bermuda's (re)insurance hub role but omits its full Solvency II third-country equivalence (Delegated Decision (EU) 2016/309, retroactive to 1 Jan 2016). Bermuda is, alongside Switzerland, one of few jurisdictions with full equivalence.

The key_dates end in 2018 (DABA) and contain no entry for the Corporate Income Tax Act 2023 — Bermuda's most significant tax-policy change in decades.

The entry states 'No income tax, corporate tax, or capital gains tax'. No longer accurate as of 1 January 2025: the Corporate Income Tax Act 2023 introduces a 15% corporate income tax on entities of multinational groups (revenue ≥ EUR 750M) (OECD Pillar Two).

Bermuda had no connections. Connected to FATCA as IGA jurisdiction.