Bermuda companies fall into two principal categories: companies incorporated by Bermudians to trade primarily in Bermuda and companies incorporated by non-Bermudians for the purpose of conducting business outside Bermuda. This section is concerned only with the latter kind of company. Companies falling into this category are known as “exempted companies” and are so-called because they are exempted from those provisions of Bermuda law which stipulate that at least 60% of the equity must be beneficially owned by Bermudians. Permit companies (ie overseas companies which have received a permit to carry on business in or from within Bermuda) are addressed.
In general terms, the Companies Act restricts an exempted company from carrying on business in Bermuda, except to the extent that it is so authorised by its constitutional documents and has been granted a licence by the Minister of Finance (the “Minister”) who will form a view as to whether or not the granting of such a licence is in the best interest of Bermuda. Having said that, there are certain activities which are expressly excluded from the requirement for a licence. Such activities include: doing business with other exempted undertakings (ie exempted companies, permit companies, exempted partnerships and exempted unit trust schemes) in furtherance of the business of the exempted company which is being conducted outside Bermuda; dealing in securities of exempted undertakings, local companies or partnerships; carrying on business as manager or agent for, or consultant or advisor to, any exempted company or permit company which is affiliated (whether or not incorporated in Bermuda) with the exempted company or an exempted partnership in which the exempted company is a partner or, in the case of mutual funds, selling or distributing their shares in Bermuda.
The Companies Act makes provision for, among other things, the incorporation of single shareholder companies. The reader should therefore be aware that, in this Guide, references to shareholders also embrace the sole shareholder of such a company.