Economic Substance Amendment Act 2019

The Economic Substance Amendment Act 2019 (Amendment Act) became operative on 28 June 2019. The Amendment Act creates an exemption for entities that are resident for tax purposes in a jurisdiction outside of Bermuda (provided such jurisdiction is not on the EU’s list of non-cooperative jurisdictions for tax purposes). This important development will place Bermuda on a level playing field with other jurisdictions that are subject to the EU’s economic substance requirements.

Information received by the Registrar of Companies (RoC) from an entity to support its non-resident status will be provided to the foreign competent authority of the jurisdiction where the holding entity, the ultimate parent entity, the owner or the beneficial owner of the non-resident entity is incorporated, formed and registered or resident.

Draft Guidance Notes

The RoC released Draft Economic Substance Requirements – General Principles (Draft Guidance Notes) on 26 June 2019 for industry consultation. The Draft Guidance Notes will assist entities in determining whether they are within scope of the economic substance requirements and, where entities are in scope, provide guidance on how to satisfy these requirements. Additional sector-specific guidance notes will be released by the RoC in due course. The Draft Guidance Notes state that the RoC is in the process of building an e-registration system to accept and manage the economic substance declarations and it is anticipated that the e-registration system will launch in the second quarter of 2020.

Next Steps?

The Draft Guidance Notes reiterate that entities incorporated, formed and/or registered on or after 1 January 2019 are immediately subject to the Economic Substance Act 2018 while entities incorporated, formed and/or registered prior to 1 January 2019 will be subject to the ES Act from 1 July 2019.

Appleby has a regulatory team with a specialised knowledge and in-depth understanding of the economic substance regime. For further information please contact Tim Faries, Sally Penrose or your usual Appleby contact.

Locations

Bermuda

Services

Corporate

Sectors

Economic Substance

Type

Insight

Share
Twitter LinkedIn Email Save as PDF
More Publications
25 Jan 2023

Chambers Insurance & Reinsurance Guide 2023: Bermuda

This guide provides the latest information on sources of insurance and reinsurance law, overseas-bas...

23 Jan 2023

Sponsored Dependants; How and Where Can They Work?

If a person arrives on the island under a work permit with their spouse or partner who is a sponsore...

19 Jan 2023

Applications expected under the Investment Business Act

Persons who must comply with the requirements of the amended Investment Business Act 2003 should con...

4 Jan 2023

Artemis Q4 2022 Catastrophe Bond and ILS Market Report

Fresh capital will enter the insurance linked securities (ILS) market, but while catastrophe bond de...

19 Dec 2022

Bermuda Insolvency and Restructuring Law Update

Bermuda’s insolvency and restructuring landscape is distinct in a number of ways. In this article...

15 Dec 2022

Insurers need well drafted commercial contracts to use artificial intelligence

It is impossible to overestimate the dependence of Bermuda’s successful insurance sector on inform...

9 Dec 2022

Americas Restructuring Review 2023

This article discusses the defining features of Bermuda’s insolvency landscape and the primary ins...

5 Dec 2022

Business Crime and Investigations in Bermuda: Overview

A Q&A guide to business crime and investigations in Bermuda.

24 Nov 2022

Information Technology, Outsourcing, Privacy & Data Protection

All aspects of Bermuda's economy rely on information technology and data processing - an essential i...

Contributors: Duncan Card
22 Nov 2022

A Look Back on 2022 and What to Expect for 2023

As we approach the end of 2022, we are able to look back and say with certainty that the arena of la...