On 21 June 2019, Bermuda's House of Assembly passed a Bill
entitled "The Economic Substance Amendment Bill 2019".
The Bill will now be debated in the Senate and, if passed, is
expected to become operative following the Governor's assent by
the end of June 2019.
The Bill introduces an important exemption from the economic
substance requirements that were introduced by Bermuda under the
Economic Substance Act 2018 (the "ES Requirements"). If
passed, entities which are registered in Bermuda and engaged in
'relevant activities' for the purpose of that Act will not
be subject to ES Requirements if they can prove that they are a
'non-resident entity'.
A non-resident entity means an entity which is resident for tax
purposes in a jurisdiction outside Bermuda that is not in Annex 1
to the EU list of non-cooperative jurisdictions for tax purposes
(the so-called 'black list').
Non-resident entities will be required to provide sufficient
evidence to the Registrar of Companies to support their tax
residence in a jurisdiction outside Bermuda. In addition, the
information received by the Registrar will be provided to the
foreign competent authority of an EU member state or other
jurisdiction where a holding entity, the ultimate parent entity, an
owner or the beneficial owner of the entity is incorporated,
formed, registered or resident.
Please contact Natalie Neto, Jonathan Betts or Sarah Demerling of
Walkers Bermuda or your usual Walkers contact for further
information.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.