Bermuda is a group of 181 islands in the North Atlantic Ocean, which is also the oldest British colony in the western part of the world. Therefore, the legal system is based on English common law here. This British Overseas Territory refers to the high-income group and has the highest GDP per capita in the world of $117,740, and a population of about 63,918 people. The main income comes from tourism, as about 600 thousand people visit the island every year. Moreover, the offshore industry is well-developed here. In fact, Bermuda has paved the path for offshore services in many of the Caribbean Basin offshore jurisdictions. Today, offshore services offered in Bermuda include offshore banking, registration and establishment of offshore companies, partnerships, as well as Bermuda trusts.
Ease of Doing Business in Bermuda
Registering an offshore company in Bermuda, with its traditional zero tax rate and high level of confidentiality, is a favorable solution for many businessmen who strive to optimize the level of taxation for their businesses. The majority of incorporated offshore companies in Bermuda belong to US residents, which can be explained by the location and advantages of this area. The country is strong in all aspects: from banks, which serve international clients; insurance companies, being some of the largest in the world; to the normal infrastructure for living.
This British Overseas Territory is recognized as one of the most stable economies. Moreover, having a business in this country makes it easy to do business with England and the United States.
After setting up a company in Bermuda, it is exempt from the obligation to file annual tax returns and financial reports. Additionally, to form an international company, you need only one director and one shareholder who can be non-residents of the island, as well as the same person.
Business Taxes in Bermuda
Bermuda is known as a tax haven. Nevertheless, there are several taxes in Bermuda, such as land taxes and a payroll tax on employers. If you are looking for a country where the international income tax rate is 0%, Bermuda will be the perfect option. It is also the one where the government offers:
- No currency control;
- No capital gains tax;
- No VAT tax.
However, Bermuda has not entered into any double taxation treaties.
There are tax payments, also known as the total number of taxes, paid by businesses (plus electronic filing). This tax is counted as paid once a year even if payments are more often. Nevertheless, there was no research performed in Bermuda in 2019, so the World Bank research has no results for that year.
Income tax
An income tax is a tax imposed on individuals or business entities (taxpayers) in respect of their income or profits earned. Income tax rates may vary by the types or characteristics of the taxpayer and the type of income.
In Bermuda, individuals do not pay income tax, so the Bermuda Personal Income Tax Rate is 0%. However, the government charges a payroll tax instead. The Bermuda Payroll tax rate is no more than 10.25%.
Corporate tax
There is no corporate income tax in Bermuda. A company will be considered a tax resident of Bermuda if it is registered here. Therefore, the corporate income tax (CIT) rate in Bermuda is 0%.