Exempt Company Formation Falls In Bermuda

by Mike Godfrey, Tax-News.com, Washington

14 October 2002

Figures released by the Bermuda Monetary Authority last week have revealed that the number of exempted companies (exempted from the 60% Bermudian ownership, and not permitted to do business with other Bermudian companies) formed in the second quarter of 2002 is down to 223, 30% lower than the same time last year, and 55% lower than the number recorded during the second quarter of 2000.

Some observers have drawn a link between falling applications for exempted company status and the ongoing 'corporate inversion' political brouhaha in the United States. However, according to Finance Minister, Eugene Cox, the statistics do not represent any great cause for concern:

'While the number of incorporations in Q2 may be down year-over-year, we expect that 2002 will still be a relatively strong year for company incorporations in Bermuda given the fact that 2001 may go down as one of the strongest years on record. More importantly, it is instructive to note that foreign exchange receipts from international companies increased year-over-year in Q2.'

Speaking to the Bermuda Sun last week, head of the Association of Bermuda International Companies, David Ezekiel echoed this, stating that: 'I don't believe there is, at this stage, any connection between the drop in incorporations and Stanley Tools et al.'

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