Bermudian Work Permit Term Limits Could Force Firms Off The Island

by Amanda Banks, Tax-News.com, London

22 July 2003

A recent report in the Royal Gazette has revealed that many Bermudian based firms are considering leaving the island as they become ever more exasperated by the work permit term limit rules, with Dublin emerging as a popular alternative location.

From 2001, the government required all foreign workers in Bermuda to obtain a work permit, which has a limitation period of six years, with the possibility of three year extensions for certain key personnel. However, as the 2007 cut-off date fast approaches, many firms are considering drastic measures as they cope with a potential recruitment crisis and loss of highly trained and experienced employees.

Of the nine firms interviewed by the Gazette, all of them were said to be considering their options, including relocating operations to Dublin, which enjoys a corporate tax rate of 12.5% and work permits without term limits. All of the firms were considering relocation as part of their contingency plans.

According to the Gazette, the Irish Development Agency has received a number of enquiries from Bermudian firms, though a spokeswoman was unable to divulge their identities.

"Dublin would give its right arm to have an ACE or XL come to the city," a CEO of a Dublin-based insurance firm with knowledge of the Bermudian market told the Gazette. "If Bermuda loses, Dublin will gain. If Bermuda goes ahead with its work permit policy and shoots itself in the foot, we will have a stronger sector here."

"Intellectual capital is absolutely vital. If a government starts saying you can have this person or can't have that person or have to start hiring this person, it becomes an issue. Here we take all kinds of people and are glad to have them," added the CEO. "But Bermuda seems to be getting close to pushing the self-destruct button. The whole term limits thing beggars belief."

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