Following the introduction of new international requirements for companies to show economic substance in jurisdictions where they have a registered presence, members of the Association of Bermuda Insurers and Reinsurers (ABIR) has expressed support for the island’s efforts to facilitate tax transparency and compliance with global standards.
The Bermudian government recently enacted the Economic Substance Act 2018, intended to meet the commitment made to address concerns raised by the European Union’s Code of Conduct Group in relation to the need for relevant businesses to demonstrate economic substance in Bermuda.
Kevin O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd, and current Chairman of the Association of Bermuda Insurers and Reinsurers, said: “This state-of-the-art legislative package further aligns Bermuda’s statutory and regulatory framework with both Bermuda’s prevailing, world-class business practices, and with emerging global standards.”
“As the global centre of risk transfer, we believe Bermuda’s international business sector already meets or exceeds worldwide requirements. We applaud the Government’s legislative reform package which further enhances that framework, and its commitment to ensuring that clients and markets worldwide will continue to benefit from Bermuda’s critical financial capacity and leading risk management expertise.”
Data reported in 2017 showed ABIR members’ aggregate direct economic impact to the Bermuda economy was $842.6 million, including travel, business, charity giving, construction expenses and compensation paid to Bermudian-based employees.
ABIR members also said similar economic contributions from companies in “relevant activities” specified in the ESA has potential to greatly enhance Bermuda’s economy.
Starting January 1 for new companies and July 1 for existing companies, substance requirements will affect entities carrying out the following activities: banking, insurance, fund management, financing & leasing, headquarters, shipping, intellectual property, distribution & service centres, and related holding companies.
