Economic Substance Update
The Government of Bermuda is committed to satisfying the EU’s Intergovernmental Code of Conduct (Business Taxation) Group economic substance requirements and has passed the Economic Substance Act 2018 and brought the Economic Substance Regulations 2018 into force on 31 December 2018.
Amendments have been made to the Regulations on 22 February 2019 and 4 March, 2019 and are reflected in the Economic Substance Amendment Regulations 2019 and the Economic Substance Amendment (No. 2) Regulations 2019. These collective amendments enhance the Economic Substance Regulations 2018,making significant changes to the applicability of the Economic Substance Act 2018 to holding companies, as well as redefining IP business.
The economic substance legislation is now in force and if you have Bermuda entities in your structure, it is important to review the economic substance framework to understand how these requirements may affect you.
The provisions of the Economic Substance legislation have significant impact on companies (including permit and overseas companies), limited liability companies and partnerships (local, exempted, permit and overseas) registered in Bermuda. It is of upmost importance that all persons and bodies within and outside Bermuda understand the impact of on their business structures.
The corporate team at CHW is available to advise on any queries relating to compliance and reporting requirements of this important legislation.