Bermuda Government to reform 60/40 rule
The Government of Bermuda has announced that it aims to reform the current laws that limit foreign foreign ownership of businesses to just 40 percent.
In his first budget as Premier and Minister of Finance on the Island David Burt announced that the Government of Bermuda was committed to stimulating investment in the economy and attracting foreign investment.
As a part of this he said that the Government would work to make its economy more competitive.
“This Government is determined to create the conditions and opportunities that usher the ‘left-behind’ from the stands and sidelines to the playing field,” he said as he announced the budget. “Bermudian entrepreneurs should not have to rely on their inheritance or banks that often refuse to lend to fund their ambitions. We will increase access to capital for Bermudians by reforming the 60/40 rule to one that only requires 40 percent Bermudian ownership in order to operate in the domestic economy.”
Premier Burt admitted that this was a controversial move and that it would face criticism from both sides of the political spectrum on the Island, but added that the Government of Bermuda intends to consult and strike the right balance to ensure that the revision of this rule has the intended consequence of providing more opportunities for Bermudians to become wealth-generating owners and not just employees.
However, Premier Burt also said that the most pressing threat that the Island is facing at present is the recent tax reform in the United States, which saw a reduction of corporate tax rates combined with protectionist tax measures targeting global companies.
“Although the tax changes were not directly targeted at Bermuda, many of Bermuda’s international companies have had to make quick adjustments to their operations to avoid an additional tax burden,” said Premier Burt. “During and after the debate in the US Congress, the Bermuda Government has maintained its collaborative relationship with the Association of Bermuda Insurers and Reinsurers (ABIR) to protect Bermuda’s interests. Although we feared the worst, the resulting tax changes will not be fatal to our insurance industry, and may present some opportunities for growth due to the superior regulatory advantages for companies operating from Bermuda.
“Recently, the Minister responsible for immigration met with the leadership of ABIR and made it clear that the Government will facilitate any transfer of jobs to Bermuda that may result from any restructuring caused by the US tax reform. Any transfer of jobs to Bermuda will create additional opportunities for Bermudians, and this Government is committed to preparing Bermudians to take advantage of those opportunities.”
