Financial Planning in Bermuda

Bermuda punches far above its weight. An island of 54 square kilometres in the North Atlantic, roughly 1,000 kilometres off the coast of North Carolina, it is home to approximately 64,000 people — yet it is the world's leading centre for catastrophe reinsurance, the domicile of choice for some of the world's largest insurance groups, and a jurisdiction that has attracted some of the most sophisticated international capital in the world. For high-net-worth individuals, Bermuda offers a rare combination: a zero-tax environment, a British-influenced legal and regulatory framework, and a standard of living that, while extraordinarily expensive, is genuinely high.

The Tax Environment

Bermuda imposes no income tax, no capital gains tax, no inheritance or estate tax, no corporation tax, and no withholding tax. The government funds itself primarily through payroll tax (levied on employers, not employees), customs duties, land tax, and stamp duties.

For an individual with substantial investment income, overseas rental income, or capital gains from financial assets, Bermuda residency can be highly advantageous — provided home-country tax obligations are properly managed. As with all zero-tax jurisdictions, the absence of Bermuda tax does not extinguish obligations to other countries. UK nationals with UK domicile remain exposed to UK inheritance tax on their worldwide estate. US citizens face worldwide taxation from the IRS. The advice is always to understand your home-country obligations fully before concluding that Bermuda residence solves your tax position.

Bermuda charges customs duties at rates typically in the range of 5–35%, which significantly increases the cost of goods. Land tax is levied annually on property based on annual rental value. These indirect taxes, combined with the very high cost of imported goods and services, mean that the effective cost of living in Bermuda is among the highest in the world despite the absence of direct taxation.

Residency Options

Bermuda is notably restrictive on immigration. Unlike many offshore centres that actively compete for wealthy residents, Bermuda's immigration policy is governed by concern for the interests of Bermudians, and pathways for non-Bermudians to obtain long-term residence are limited.

The principal work-focused route for internationally mobile professionals is the Global Entrepreneur Work Permit, available to entrepreneurs wishing to develop an international business from Bermuda, with no requirement to employ Bermudians initially. The permit is typically issued for two years and can be renewed.

The Work from Bermuda Certificate was introduced during the COVID-19 pandemic as a remote-working visa. It allows nationals of eligible countries to live and work remotely in Bermuda for up to 12 months (renewable). It does not provide the right to seek local employment. For digital nomads and remote workers, this is an accessible route; for those seeking long-term permanent status, it is a starting point, not a destination.

Permanent Residency in Bermuda is very restricted. It is primarily available to individuals who have lawfully resided in Bermuda on a work permit for an extended period (typically many decades of continuous employment), or to spouses of Bermudians. Non-Bermudians who purchase residential property in Bermuda do not automatically acquire any residency rights; property ownership and residency are separate matters.

Some HNW individuals establish Bermuda residency through the employment route — taking a position with or founding a Bermuda-registered financial services firm, thereby qualifying for a work permit while establishing genuine economic ties to the island.

The Financial Services Sector

Bermuda's financial services sector is dominated by (re)insurance. The island is the global centre for catastrophe (cat) bond issuance and catastrophe reinsurance, with names such as ACE, XL Capital (now AXA XL), PartnerRe, RenaissanceRe, and Everest Re having historically built major operations on the island. The 2001 class of new Bermuda reinsurers formed in the aftermath of the September 11 attacks — raising billions in fresh capital to meet expected claims — cemented Bermuda's pre-eminence in this sector.

For private wealth planning, Bermuda offers well-developed trust and company law, with trust legislation broadly derived from English law. Bermuda exempted companies (i.e., companies exempt from the economic substance requirements applicable to local companies) are widely used in private wealth structures, holding company arrangements, and fund vehicles.

Banking is provided by a small number of well-capitalised institutions. Butterfield Bank is the island's dominant private banking and wealth management provider — it has operated continuously in Bermuda since 1858 and manages assets for some of the island's wealthiest families and international clients. HSBC also has a significant presence, primarily through HSBC Bank Bermuda. The Bermuda Stock Exchange (BSX) is a recognised stock exchange that lists investment funds, insurance-linked securities, and other financial instruments.

The Bermuda Monetary Authority (BMA) regulates the financial sector with a framework broadly aligned with OECD and international standards. Bermuda is FATCA-compliant and participates in CRS, meaning account information is automatically reported to the relevant home-country tax authorities of account holders.

Healthcare in Bermuda

Bermuda operates a form of universal healthcare known as the Standard Health Benefit (SHB) scheme. Employers are required to provide health insurance for employees and their dependants, with both employer and employee contributing to premiums. The government's FutureCare programme provides supplementary health coverage for residents aged 65 and over.

For non-residents and visitors, private health insurance is required. Given the high cost of medical care in Bermuda — driven by the need to import specialists, equipment, and supplies — comprehensive health insurance is essential. For complex procedures, many Bermuda residents travel to the United States (Boston, New York, Miami), which is readily accessible given the island's proximity to the US eastern seaboard.

The King Edward VII Memorial Hospital is the island's sole hospital, providing emergency and general medical services. The quality of routine care is reasonable, but specialist services are limited by the island's size. Private GP practices and specialist clinics serve the expatriate community.

Cost of Living

Bermuda is, by most measures, one of the most expensive places to live in the world. The combination of geographic isolation (everything is imported), import duties, and the high local wage rates means that everyday costs — groceries, dining, domestic services, vehicle insurance — are dramatically higher than in the UK, Europe, or North America.

As a rough guide: a family grocery shop that costs £200 in the UK might cost £400–500 in Bermuda. Dining at a mid-range restaurant for two will typically cost US$100–150 before drinks. Vehicle import duty and annual road tax add substantially to motoring costs (only one vehicle per household was historically permitted, though this restriction has been relaxed).

Residential property is expensive, with rental prices for a modest two-bedroom apartment in the Hamilton area beginning at around US$4,000 per month. Larger family homes command US$7,000–15,000 per month or more. Foreigners wishing to purchase property in Bermuda must obtain an acquisition licence, and non-Bermudians may only buy the most valuable properties: eligibility is set by reference to a property's Annual Rental Value (ARV) rather than a headline purchase price, with separate, higher ARV thresholds for houses than for condominiums. In practice this restricts non-Bermudian buyers to the upper end of the market (often several million US dollars for a qualifying house). A substantial licence fee applies (a percentage of the purchase price, higher for houses than for condominiums), in addition to conveyancing stamp duty. The current ARV thresholds and fee percentages should be verified with a Bermuda lawyer before any purchase.

Against this cost backdrop, the absence of income tax remains a powerful attraction for very high earners. An executive earning US$1 million per year, for whom a UK or US equivalent tax bill might run to US$400,000–450,000, will find that even Bermuda's high living costs leave them significantly ahead after the tax saving.

Expat Community and Lifestyle

Hamilton, the capital, is a small but well-serviced town with excellent restaurants, boutique retail, and the social infrastructure that supports a well-travelled international community. The Hamilton Club, Royal Bermuda Yacht Club, and various private clubs and sporting associations cater extensively to the expatriate professional community.

Bermuda's natural environment is exceptional — pink sand beaches, turquoise water, and a subtropical climate that delivers mild winters and warm summers. The island's small size (approximately 35 kilometres from one end to the other) means that everything is accessible. The dark side of this compactness is that there is nowhere to go within the island for a change of scenery, and the sense of being on a small island can weigh on some residents over time.

There are several good international schools, including the Saltus Grammar School and Warwick Academy, offering curricula broadly aligned with the UK system. International and American school options also exist, and the educational standard is generally regarded as high by British expatriate families.

Compliance and Reporting

Bermuda's regulatory environment is mature and OECD-aligned. The BMA actively cooperates with international regulatory and tax information exchange requests. There is no scope for anonymous offshore structures in Bermuda; beneficial ownership registers are maintained and reported under CRS and FATCA. Planning in Bermuda should be transparent and commercially motivated.

Important: Tax laws change, and individual circumstances vary significantly. Nothing in this guide constitutes tax, legal, or financial advice. Rules applicable to you will depend on your personal tax residence, domicile, nationality, and the nature of your assets. You should seek independent professional advice before making any financial or residency decisions.

How Global Investments can help

Global Investments advises internationally mobile HNW clients on cross-border wealth planning, including jurisdictions such as Bermuda where the tax and residency framework requires careful navigation alongside home-country obligations. We can connect you with experienced Bermuda-based private banks, trust companies, and immigration advisers, as well as UK and international tax counsel. Contact us to arrange an initial discussion.