The financial services industry is being impacted by fintech, or financial technology, which is transforming the way we do business and interact with customers particularly in relation to banking, trading, financial advice and products. This emerging sector is attracting capital to fintech start-ups and has created many opportunities. Bermuda has recently introduced two Acts namely: Companies and Limited Liability Company (Initial Coin Offering) Amendment Act 2018 (ICO Act) and Digital Asset Business Act (DABA). These changes will regulate initial coin offerings and digital asset business carried out in or from within Bermuda. This is part of Bermuda’s plan to develop a globally recognised standard for regulating the fintech sector in Bermuda.
To compliment Bermuda’s efforts to become a fintech hub, the Island has been quick to introduce business-friendly immigrations policies for reputable fintech companies seeking to do business in or from within Bermuda.
“The Expected Fintech Business Permit Policy” closely mimics Bermuda’s existing “New Business Work Permit Policy”. Following vetting and approval of the Fintech business’ business plan by the FinTech Advisory Committee, the company will be able to apply for a Fintech Business Permit (Permit) using the relevant application form. A certificate of incorporation, and the date the company expects to commence operating in Bermuda, must be included with the Permit application.
Once the initial Permit has been approved, the company will receive automatic approval for five additional work permits. These must be applied for within the first 6 months of the initial Permit. Work permit terms can be granted for up to five years and regular statutory council referral rules apply. Jobs categorised as closed, restricted, or are entry level in nature, cannot be filled using the Permit.
Upon expiry of the initial Permit term, the entity will be obligated to apply for a Standard Work Permit if they desire to continue doing business in Bermuda, which will be subject to Bermuda’s regular advertising and recruitment requirements.
How will the new work permit policy benefit Bermuda?
Fintech is a new specialised industry, and the Government is keen to tie industry development with the investment and training of local talent. Where a company would like to apply for more than five Fintech Business Permits, the company will need to submit a business plan outlining how they anticipate hiring Bermudians long-term. Indication of an intention to enlist the services of local providers is also encouraged.
Bermuda is already reaping the initial benefits of efforts in this space. On 27 April 2018 Bermuda signed a Memorandum of Understanding (MoU) with Binance worth $15 million, inclusive of an earmarked $10 million for university training for Bermudians, and $5 million to be invested directly into local Blockchain companies. Shyft Network Inc. also signed a similar MoU worth up to $10 million with a pledge to create 30 Bermudian jobs.
Bermuda has positioned itself to be at the forefront of this fast growing, niche industry. The Fintech Work Permit Policy is a crucial step towards the Island becoming more attractive to investors, while creating unique opportunities for Bermudians to flourish in this innovative space.