Bermuda's Offshore Sector Praised By Moody's

by Amanda Banks, Tax-News.com, London

15 January 2004

Following the recent positive assessment of the Bermudian economy by Standard & Poor’s, another ratings agency, this time Moody’s, has affirmed the jurisdiction’s ‘stable’ outlook and praised the continuing strength of the offshore sector.

Assigning an ‘AA’ long-term credit rating and an ‘A-1+’ short-term credit rating, Moody’s analyst Steven Hess commented: "Bermuda has established itself as a premier offshore business centre as tourism has steadily declined over the last 20 years.”

“Led by the insurance sector, offshore business continues to drive economic activity,” added Hess.

He continued: "The Government's policies have demonstrated continued commitment to sound fiscal policies and low Government debt levels. For example, it has maintained the policy of keeping Government debt at less than ten percent of GDP.” Hess also noted that the government is expecting increased revenues from customs duties and payroll tax to help reconstruction in the aftermath of Hurricane Fabian.

However, whilst Moody’s predicted continued growth in Bermuda’s offshore sector, the analyst warned that changes in tax legislation may have a “significant impact” in the jurisdiction’s insurance industry. Hess also flagged the possible knock-on effects of future changes in US tax legislation.

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