Bermuda, Mexico Sign TIEA

by Phillip Morton, Investors Offshore.com

20 October 2009

Bermuda’s Minister of Finance, Paula Cox, has announced the signing of the territory’s seventeenth tax information exchange agreement (TIEA), and also a Memorandum of Understanding, with Mexico.

The agreement, upon entry into force, will provide the respective countries’ tax authorities with tax information to aid in criminal and civil tax matters.

The agreements were signed by Mexican Minister of Finance and Public Credit, Agustin Carstens, and Bermuda’s Minister of Finance and Deputy Premier, Paula Cox, in Mexico City at the Nacional Financiera.

In a statement, Cox said that she expected the signing of the TIEA to have positive ramifications on Bermuda, by allowing the territory to benefit from any future Mexican law changes that might benefit trade with its TIEA partners, and also by boosting the jurisdiction’s reputation amongst prospective Mexican investors.

Bermuda will benefit from boosting relations with Mexico, as Bradley Kading, President and Executive Director of the Association of Bermuda Insurers and Reinsurers, explained:

"Mexico is exposed to earthquake and hurricane loss potential, very similar to the United States. Bermuda's reinsurers are the leading providers of natural disaster catastrophe reinsurance and as a result we are logical providers of coverage to Mexico domiciled insurers. We provide 40% of the hurricane and earthquake reinsurance to North America. This tax agreement should contribute to additional cross border trade of benefit to Mexican business and consumers in need of financially strong risk takers."

David Ezekiel, Chairman of the Association of Bermuda International Companies, echoed Kading's sentiments: "Coming just after the conclusion of negotiations with Spain and the signing of the TIEA with France, the signing with Mexico is further good news for the Bermuda international business sector as all three of these countries have a substantial involvement in our market. The signing of the TIEA will enhance those current relationships and should make Bermuda even more attractive as a domicile for prospective clients from Mexico."

Bermuda's TIEA with Mexico is its seventeenth signed agreement. Bermuda now has TIEAs in place with G7 members France, Germany, the United Kingdom, and the United States, as well as with Australia, Ireland, New Zealand, the Netherlands, the Nordic Group (i.e. Denmark, Finland, Iceland, Norway, Sweden, and their associated territories), and the Netherlands Antilles.

Cox said: "We have worked assiduously to strengthen worldwide tax cooperation. We shall continue to build upon our longstanding position of transparency and cooperation which has differentiated Bermuda from other jurisdictions."

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