Bermuda Simplifies Partnership Legislation

by Amanda Banks, Tax-News.com, London

30 January 2006

New Bermuda laws have simplified the regime for Exempted and Overseas Partnerships, which are typically used for venture capital private equity, real estate and other investment purposes, reports law firm Conyers Dill and Pearman.

Minister of Finance Paula Cox told the House of Assembly that the Exempted Partnerships Amendment Act 2005 and the Overseas Partnerships Amendment Act 2005 are designed to bring administrative rules for partnerships into line with those for companies and to permit more sophisticated uses for a Bermuda partnership.

Key changes include the following:

• The Register of limited members in a partnership will no longer be on the public file;
• The distinction between contributions in capital and kind is being abolished;
• The requirement for minimum capital of $12,000 has been removed;
• The notification requirement for changes in limited partners' capital has been removed;
• Individual non-Bermudian partners will no longer require authorization to act in Bermuda on behalf of their partnership.

It is expected that the changes will make it easier for investment funds to make use of a Bermudian partnership structure, in which the general partner is often a local firm and the limited partners are high-net-worth, sophisticated investors.

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