The Bermuda Monetary Authority (the Authority or BMA) regulates Bermuda’s financial services sector.

Establishing an Investment Management Company in Bermuda

A Bermuda Investment Management Company is governed by the Investment Business Act, 2003 of Bermuda (the “IBA”) and the Bermuda Immigration and Protection Act, 1956 as amended (the “IPA”). No unique requirements are applicable to investment management company incorporations in Bermuda. The company will be incorporated as an exempted (i.e. foreign owned) Bermuda company. There is no minimum share capital required under Bermuda law.

The objects of the Company would be unrestricted but would also specifically include the ability to provide investment management services to foreign (i.e. non-Bermudian) interests.

Bermuda Investment Funds

A Bermuda Investment Fund is governed by the Bermuda Investment Funds Act 2006. The Bermuda Monetary Authority (the “Authority” or the “BMA”) is the principal body responsible for the regulation of investment funds, including those listed on the Bermuda Stock Exchange. The BMA insists that persons proposing to establish funds in Bermuda are persons of sound business integrity and good financial standing in addition to having high industry credentials. The Investment funds will be structured and organised as a company registered under the Companies Act 1981, as amended (the “Companies Act”) as an exempted company and stated to be a ‘mutual fund’. A mutual fund is defined in the Companies Act as “a company limited by shares and incorporated for the purpose of investing the moneys of its members for their mutual benefit and having the power to redeem or purchase for cancellation its shares without reducing its authorised share capital and stating in its memorandum that it is a mutual fund.”

One or more classes or series of shares may be created and offered separately by a mutual fund. Typically, a mutual fund would be incorporated with two or more classes or series of shares, that would include the manager’s shares (usually without participation rights) comprising one class of shares (typically equivalent to US$1.00) that are issued to and held by the manager. The remaining shares would be participating shares issued to investors, who would be entitled to request redemption thereof at net asset value. There is no minimum issued share capital requirement for a Bermuda mutual fund company.

Other Features

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.

Non-Bermudians Companies

These companies 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.

The Companies Act restricts an exempted company from carrying on business in Bermuda, except to the extent that it is authorised by its constitutional documents and has been granted a licence by the Minister of Finance who will form a view as to whether or not the granting of such a licence is in the best interest of Bermuda.

Registered Agent

Each Bermuda Offshore Company must have a Licenced Registered Agent in Bermuda.

Registered Office

Each Bermuda Offshore Company must have a Registered Office in Bermuda, provided by a Licenced Registered Agent.


A Bermuda Company requires a minimum of one director. There must always be sufficient Bermuda resident directors to form a quorum in Bermuda. Non-Bermuda directors may be appointed. Corporate directors are not permitted.


A Bermuda Company requires a minimum of one shareholder.

Tax exemptions and concessions

Bermuda is known as the tax haven. In Bermuda there is no income tax, capital gains tax, VAT, sales or wealth tax.

  • A company is considered to be a tax resident of Bermuda if it is incorporated in Bermuda.
  • Bermuda does not levy corporation tax.
  • Dividend income from local & foreign investments is not subject to corporation tax in Bermuda.
  • There is no withholding tax on divided payments to local or foreign recipients.
  • Royalty income, Capital gains are not taxable in Bermuda.

Types of Funds in Bermuda

Bermuda is a major centre in the international offshore investment fund industry with over US$50 billion in fund assets. There are over 1,500 investment funds registered in and operating from Bermuda.

(i) a closed-ended investment fund

Closed-ended funds (i.e. those that do not allow redemptions at the option of investors) are not subject to the Investment Funds Act (IFA)

(ii) an open-ended investment fund

An investment fund is open-ended if it allows its investors to redeem their shares of their own wish.

(iii) a limited partnership

Limited partnerships, which are formed under the Limited Partnership Act, are commonly used for venture capital investments and closely held investments.

(iv) administered funds

An investment fund qualifies for classification as an Administered fund if its administrator is licensed under Bermuda law and (a) requires participants to invest a min mum of $50,000 in the investment fund or (b) is listed on a stock exchange recognised by the BMA.

(v) specified jurisdiction funds

The Order has been specifically created to ensure that the rules applicable to Japan Funds domiciled in Bermuda will meet the requirements of the Japanese Securities Dealers Association Regulations which provide that Japanese investment dealers may only solicit customers to subscribe to securities of any foreign investment trust that is established in a jurisdiction.