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Company formation in Bermuda

Fundamental regulating about creation of Bermuda companies is the Companies Act of 1981. There are four types of companies that can be set up in Bermuda, each of which has a different characteristic:
1. Company Limited by Shares
2. Company Incorporated with Unlimited Liability
3. Company Limited by Guarantee
4. Limited Duration Companies

The most popular form of the company in Bermuda, which is used by foreign investors, is the Bermuda exempted company. "Company Exempted" is one which is exempted from the laws of Bermuda on local companies which restricts the share of the share capital which may be owned by non-Bermudu nationals. Therefore "exempted companies" are largely owned by non-residents and although they are registered in Bermuda, they may engage in business in the Bermuda, only in connection with transactions and outside activities in relation to Bermuda. After company incorporation in Poland an "exempted company" may become a shareholder in such a company. According to the Companies Act, it is possible to apply to the Minister of Finance for the authorisation of business activities in Bermuda.

The proposed company name can be reserved in the company register on three months prior to the establishment. None company may be registered under a name which, in the opinion of the Register of Companies, is undesirable or that is identical or recalls the name under which another company is already registered or established on Bermuda.

'Company exempted from Bermuda' must have at least one member or shareholder. After the company shares have been issued, the names and addresses of the members must be entered in the share's book. Shares can be issued in any currency.

The minimum share capital of the exempted company is 12 000 USD. The share capital may subsequently be increased by resolution of the company at the general meeting. Shares with no nominal value and bearer shares are not allowed.

The company must have at least one director, who may be a natural or legal person. Directors may be citizens or residents of any nationality. The list of directors must be kept in the registered office. The names of the directors and secretaries shall not be made public, but the register of companies may require information in certain circumstances, for example where an official certificate is required.

'Company exempted from Bermuda ' must have a registered office in Bermuda and must appoint a President and Vice-President or Chairman and vice-Chairman. The above positions must be selected by the person who is the director of the company.

In Bermuda there is no income tax or corporation tax, capital gains tax, VAT tax or sales tax and withholding tax. Companies and partnerships pay annual fees to the government depending on their nature and capitalisation. The exempted company may ask the Minister for Finance to issue a certificate which exempts it from future taxation of profits, if any.

Although there is no statutory requirement to maintain accounts, there should be sufficient accounting records to enable directors and shareholders to check the financial position of the company. Accounting records should be kept at the address of the registered office. If they are kept outside the Bermuda, copies of all the accounting records should be available for review quarterly by directors. All companies should appoint an auditor, except where the directors and shareholders have unanimously agreed not to appoint it.

The directors meetings may be held either in Bermuda or outside them. The notice of the directors meeting must be communicated to all directors. Shareholders meetings must be held in each calendar year and they do not have to take place in Bermuda.