Bermudian Firms Face Uncertainty Over Work Permit Term Limits

by Amanda Banks, Tax-News.com, London

21 July 2003

A top Bermudian lawyer has criticised the six year term limits imposed on work permits for creating a climate of uncertainty amongst the island's businesses, which are facing a potential recruitment crisis, with workers turning down job offers, and employees leaving the jurisdiction altogether as the 2007 cut-off date approaches.

"The sole concern and fear has been there generally for about 18 months, but the closer we come to 2007 there has been greater response and activity," Kelvin Hastings Smith told the Royal Gazette, adding that it is by no means cetain that CEOs and key workers will be granted a three year extension to their permits.

Mr Hasting-Smith has recently published a guide for his firm's clients based on the work permit regulations which were introduced by former Minister for Labour and Home Affairs Paula Cox. Entitled "Bermuda: Key Personnel - Planning for the Future" the introduction states that: "It is easy to believe that six years is a long time, but those six years in 2001 are now just four. Within a short while the impact of the immigration policy change of April 2001 will begin to have effect. Maybe your organisation is beginning to feel the effects now – overseas employees deciding that there is no long term future in Bermuda and either moving back to their home country now (or making plans to) or moving to a country with less stringent immigration policies. These effects affect Bermuda businesses. Either way, change will occur."

The work permit term limits are unpopular throughout the business community in Bermuda, and it is an issue which the Association of International Bermuda Companies considers "critical." One of the central flaws in the legislation is the ambiguity surrounding the exemption from term limits of beneficial owners and Chief Executive Officers. Mr Hastings-Smith observed that whilst most people assume this to be the case, statements from the government have clouded this issue. He warned that it is "not a given" that these groups will be exempted from the rules.

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