Economic substance: impact on Bermuda insurers and insurance intermediaries
Bermuda’s Economic Substance Act 2018 (ESA) and Economic Substance Regulations 2018 (ESR) came into operation on 31 December 2018. The ESA was enacted in response to guidance published by the European Code of Conduct Group (Business Taxation) (COCG) regarding the manner in which the COCG will assess Bermuda’s compliance with the “economic substance” element of its “fair taxation” criteria.
In June 2019, Bermuda’s Minister of Finance (Minister) published draft guidance notes: (i) to assist entities registered in Bermuda to determine if they are within scope of the economic substance requirements under the ESA and, if so, how to satisfy them; and (ii) to provide guidance as to how the Registrar of Companies (Registrar) will measure and assess the criteria for meeting the requirements.
This memorandum is tailored for members of the Bermuda insurance industry and is designed to assist them in understanding the requirements of the ESA.