Bermuda is a former British Colony situated north of Venezuela in the eastern Caribbean Sea. The country gained independence in 1966, however, the colonial heritage is very much intact and visible in every aspect of the society.
Bermudahas a colorful and vibrant culture and cuisine. Beautiful sandy beaches, crystal clear waters, and warm hospitality draw millions of tourists each year to Bermuda. Tourism plays a pivotal role in the country’s economy while agriculture and financial services play a supporting role.
English is the official language of Bermuda and the total population is just below 300000 people.
Types of business structures in Bermuda
Bermuda is categorized as an upper-middle-income economy by the world bank with a GDP per capita of $17,000 per year. The state encourages entrepreneurs and investors through flexible policies and streamlined infrastructure. Investors can choose from a variety of options while setting up a company, as discussed here.
| S# | Type of company | Local name | Min. paid-up capital required |
| 1. | Sole proprietorship | One-owner company | No paid-up capital required |
| 2. | Partnership | No paid-up capital required | |
| 3. | Limited Liability Company | Private Limited Company (Pvt. Ltd)Exempt Private Company (EPC)External Company | $2No paid capital required$5,000 |
| 4. | Public Limited Company | Corporation | $12,500 |
Sole Proprietorship
A sole proprietary business is owned and operated by a single person. It is the simplest business format preferred by startup businesses and entrepreneurs with little investment. A sole proprietorship is subject to very few state or local regulations.
Partnership
A partnership business is formed between two or more natural persons to achieve a common commercial interest. Partners may be general or limited depending on their roles and assumed set of liabilities. It is important to mention the type of partnership at the time of incorporation so as to avoid any ambiguity in the future.
Limited Liability Company
A limited liability company or LLC essentially safeguards the personal assets of the owners from debts and other liabilities. Hence, small and medium investors prefer LLC over other simpler formats.
In Barbados there are 3 types of LLCs:
Private Limited Company (Pvt. Ltd.)
A private limited company is structured to perform operations as a separate entity from its owners. In case of debts and liabilities, the company is obligated to compensate from the company assets, while the owners (shareholders) have no such obligation.
Exempt Private Company (EPC)
An EMC is a special company that is exempted from certain regulations such as yearly audits, financial return filings, etc. In all other cases, it is structured and performs as a Pvt. ltd.
External Company (ExComp)
When a company registered outside of Barbados wishes to operate within the country it needs to register as an External Company. These may include foreign companies that wish to establish a presence in Barbados or countries from the Caribbean Community (CARICOM) member states.
Public Limited Company
A public limited company or corporation is a company that is most complicated in terms of formation and structure. A corporation is subject to a list of regulations and compliance protocols. It can raise capital through the public by offering its shares.
Costs involved in registering a company in Bermuda
The costs involved in the registering and incorporating process of a company depends on the type, nature, and size of the business.
Here are a few costs that are most likely to be incurred:
Incorporation Fees
The incorporation fee is payable to the Corporate Affairs and Intellectual Property Office (CAIPO) and varies depending on the type of company being formed. As of March 2023, the incorporation fee for a private company is $170, while the incorporation fee for a public company is $1,800.
Legal Fees
Legal fees may be incurred if you choose to engage the services of a lawyer or law firm to assist with the incorporation process, draft legal documents, or provide advice on legal matters related to your company. Legal fees can vary depending on the complexity of the work required and the hourly rate charged by the lawyer or law firm.
Accounting Fees
Accounting fees may be incurred if the services of an accountant or accounting firm are rendered to assist with the preparation of financial statements or tax filings. Accounting fees can vary depending on the complexity of the work required and the hourly rate charged by the accountant or accounting firm.
Other Fees
Other fees that may be incurred when registering a company in Barbados include fees for obtaining a business license, fees for registering for taxes, and fees for obtaining permits or certifications required for certain types of businesses.
Cost of doing business
The cost of doing business or operational expenses in Bermuda can be on the higher side as compared to other countries in the region. Operational expenditure is a recurring head of account and it may vary depending on the season, time, forex rates, etc.
A few OPEX items are explained below:
Corporate Taxes
Companies operating in Bermuda are subject to corporate income tax on their profits. The standard corporate tax rate in Bermuda is 5.5%, although some companies may be eligible for tax exemptions or reductions.
Labor Costs
Labor costs in Bermuda can include salaries, wages, benefits, and payroll taxes. The minimum wage in Bermuda is $4.5 per hour, although some industries may have higher minimum wage requirements. Employers are also required to contribute to the National Insurance Scheme (NIS), which provides social security benefits to employees.
Rent and Utilities
Rent and utilities can be significant costs for businesses operating in Barbados. The cost of commercial rent can vary depending on the location and type of property, while utilities such as electricity, water, and telecommunications also add to the cost of doing business.
Regulatory Compliance
Companies in Bermuda must comply with various regulations and requirements, such as obtaining business licenses, registering for taxes, and maintaining proper records. Compliance costs can vary depending on the industry and the size of the business.
Transportation and Logistics
Businesses that rely on transportation and logistics to import or export goods may incur additional costs, such as shipping fees, customs duties, and storage costs.
