Bermuda's Economic Substance amendment Act 2019 became operative on June 28, 2019. It creates an exemption for entities that are resident for tax purposes in a jurisdiction outside of Bermuda, as long as jurisdiction isn't itself on the EU blacklist. Similar exemptions were already accessible under the es Legislation of the BVI and the Cayman Islands.
Draft Bermuda guidance:
On June 26, 2019, the RoC released for discussion draft Economic Substance requirements – Draft guidance Notes – General Principles (Bermuda guidance Notes).
The Bermudas guidance Notes are meant to help entities in determining whether they are in scope of the es regulations and, if entities are in scope, to supply guidance on how these requirements could also be satisfied.
Key points to notice from the draft Bermudas guidance Notes are the following:
The RoC is in the process of building an e-registration system to simply accept and manage the information and data collected under Bermuda's Economic Substance Legislation and this capability is scheduled to launch within the second quarter of 2020.
Where the economic substance requirements obligate a relevant entity to manage and direct a relevant activity in Bermuda, the RoC can assess whether the entity:
holds meetings in Bermuda where strategic or risk management and operational choices are taken ("key decisions"), and
has an adequate number of senior executives, employees or other persons in Bermuda who are appropriately qualified and responsible for oversight or execution of the entity's core income-generating activities. The RoC would ordinarily expect at least a majority of such key meetings to be held in Bermuda or, for a relevant entity with a minimum level of activity, a minimum of one key meeting in every relevant financial period.
A relevant entity's core income generating activities with relation to any relevant activity should be undertaken in Bermuda.