In November 2015, Bermuda was awarded full equivalence under the EU’s Solvency II directive, which gives its firms a “passport” to sell directly into Europe.
Since January 1 this year, the Bermuda Monetary Authority has implemented the Basel II regime for banking, which requires financial institutions to maintain enough cash reserves to cover risks incurred by operations.
According to Timothy Faries, Bermuda Managing Partner, the offshore law firm, the reputation of those sectors has created a “snowball effect”. “Not only do you have the actual market here but also the capital, the decision makers who can do deals, as well as the support infrastructure,” he says. “You have got lawyers, you have got regulations, and you have got the accountants, auditors, and actuaries: you have everything here.”
Asset Management businesses are coming to Bermuda, including private equity, hedge funds, mutual funds, as well as investment management services firms. Bermuda is also home to private client firms such as family offices.
Added to its solid regulatory approach are relative economic and political stability; it has a legal system based on English Common Law and a neutral location within which to structure transactions. Travellers to the US can pre-clear customs in Bermuda and so enter America as a domestic arrival.