Bermuda corporate tax - guide for international expansion

Expanding your business to new markets requires careful consideration of local tax obligations. Bermuda presents a unique opportunity for international businesses, with its strategic location and business-friendly environment making it an attractive destination for global expansion.

Understanding Bermuda's corporate tax landscape is crucial whether you're considering establishing operations there or simply need to comply with local requirements. From tax rates to payment procedures, having the right information helps ensure smooth business operations. Wise Business can support your international expansion by providing local account details and efficient cross-border payment solutions to manage your financial obligations seamlessly.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Bermuda Corporate tax rate in 2025

Bermuda traditionally operates with a 0% corporate income tax rate for most companies, making it one of the world's most attractive offshore financial centres. However, this changed significantly in 2025 with the introduction of new tax measures targeting large multinational enterprises.¹

From January 1, 2025, Bermuda introduced a 15% corporate income tax specifically for multinational companies with annual revenue of EUR 750 million or more, aligning with the OECD's Pillar Two global minimum tax framework. This change affects only the largest international corporations, while smaller businesses and local companies continue to benefit from Bermuda's traditional 0% corporate tax rate.²

The new tax regime represents Bermuda's compliance with international tax standards whilst maintaining its competitive advantage for smaller and medium-sized enterprises. Companies below the EUR 750 million revenue threshold remain exempt from corporate income tax, preserving Bermuda's status as a premier offshore business destination.¹

Read more about Corporate Tax Planning best practices

How to pay corporate tax in Bermuda

For multinational companies subject to Bermuda's new 15% corporate income tax, payments must be made in Bermudian dollars (BMD), which maintains parity with the US dollar. The Bermuda Monetary Authority oversees tax collection for qualifying multinational enterprises under the new regime.²

Companies liable for the 15% minimum tax must register with the Bermuda Tax Authority and file annual returns, with payment deadlines by the 15th day of the 10th month after the fiscal year-end. Payments are made in installments throughout the year, with a final "true-up" payment due with the return.³

The calculation is based on the effective tax rate methodology under Pillar Two rules. If a company's effective tax rate in Bermuda falls below 15%, additional tax is owed to bring the rate up to the minimum threshold.³

Late payment penalties and interest charges apply for non-compliance. Companies must maintain detailed records and may be subject to audit by Bermuda tax authorities. The new system includes provisions for advance pricing agreements and dispute resolution mechanisms.³

For a hypothetical company with an annual turnover of $1.5 million and a 10% profit margin, resulting in $150,000 taxable profit, the tax calculation would be:

$150,000 (taxable profit) × 15% (tax rate) = $22,500 (tax liability)

However, most companies with $1.5 million turnover would not meet the EUR 750 million threshold and would remain subject to 0% corporate tax.

When expanding your business to Bermuda, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Bermuda

To comply with tax regulations in Bermuda, you have to:

• Register early: Companies should complete tax registration promptly to avoid penalties and ensure compliance with Bermuda corporate tax obligations, including payroll and land taxes.⁴
• Corporate filings: Businesses must submit an annual return and government fee to the Bermuda Registrar of Companies. To maintain full transparency, filings should include details of directors, shareholders, officers, and financial statements.
• Beneficial ownership reporting: Companies must maintain an updated register of beneficial owners, covering individuals who control more than 25% of shares or voting rights.⁵ This register must be accessible to the Bermuda government.
• Bermuda corporate income tax: Starting January 2025, a Corporate Income Tax (CIT) will apply to multinational enterprise groups with annual revenues exceeding €750M, fulfilling Bermuda’s commitment to the global minimum tax initiative.⁶ Smaller companies remain exempt, but awareness of CIT requirements is essential.
• Engage a corporate tax specialist: Partnering with a Bermuda corporate tax specialist ensures accurate filings, adherence to regulations, and optimal corporate tax planning.

International Expansion to Bermuda

Bermuda has long been recognised as a top destination for international investment. The island’s economy grew by 4.9% in real terms in 2023, reaching $7.0 billion, with GDP per capita at $138,935 in 2024.⁷ It is the third highest in the world.⁸ Economic strength and no personal income tax help attract skilled talent and boost domestic consumption, benefiting new businesses.

Bermuda's legal framework, based on English common law and local statutes, provides clear protections for investors and simplifies business operations. The island is a global hub for international investment funds, with over 800 registered or authorised funds collectively managing over $292 billion in assets.⁹ Its strong regulatory environment and safe and secure political climate ensure investor confidence and facilitate corporate and individual domicile decisions.

Tourism remains another key contributor to the economy. In 2024, visitor arrivals grew across all categories, including air, cruise, and yacht visitors, with total visitor spending rebounding beyond pre-pandemic figures to $531 million.¹⁰ Increased hotel occupancy, leisure and business visitor spending, and a thriving superyacht sector highlight Bermuda’s growing consumption landscape.¹⁰ This will be an added advantage for businesses looking to operate locally.

The steps to establish your business in Bermuda are:¹¹

1. Conduct market research and develop a business plan.
2. Choose a location, business name, and corporate structure.
3. Register with the Department of Registrar of Companies (Ministry of Finance).
4. Register for tax obligations and open a corporate bank account.
5. Understand the Bermuda corporate tax rate, types of corporate tax, and corporate capital gains tax.
6. Schedule corporate tax due dates to ensure compliance.
7. Consider corporate tax training to streamline operations and leverage tax-neutral benefits.

Proper registration and compliance streamline business operations in Bermuda. They also simplify tasks such as wage distribution and sending money to this country.

Discover the top 5 best Corporate Tax softwares

Incorporation of Business in Bermuda

To set up a limited company in Bermuda, businesses typically engage a law firm, accounting firm, or corporate service provider (CSP) to guide them through the formation process.

The key steps include:¹²

• Name reservation: Select a unique name for your company.
• Disclosure of beneficial owners: Submit personal declarations for individuals who ultimately own or control the company.
• Drafting the Memorandum of Association (MOA) and bye-laws: The MOA acts as the company’s founding charter, detailing the company's name, location, purpose, share capital, and member liability. By-laws outline internal governance, member duties, dispute resolution, and winding-up provisions.
• Licenses or permits: Apply for industry-specific approvals depending on business activities.
• Registered office: Select a physical address in Bermuda.
• Directors, officers, and company secretary: Appoint leadership and management personnel.
• Government fees: Pay incorporation and registration fees to the Bermuda authorities.

Business Entities in Bermuda

The Companies Act 1981 establishes the legal framework governing the incorporation, management, and regulation of companies in Bermuda. The following are legal frameworks that they have approved:¹³

• Sole Proprietorship: Owned by one individual, fully liable for business debts.

• Partnerships:

• General Partnership (GP): All partners share unlimited liability.

• Limited Partnership (LP): Some partners have limited liability; others have unlimited liability, often for investment purposes.

• Limited Liability Partnership (LLP): Partners enjoy limited liability.

• Private Limited Company (Ltd.): Most commonly, shareholders’ liability is limited to investment. Shares cannot be offered publicly.

• Public Limited Company (PLC): Suitable for larger businesses; can offer shares publicly and must meet governance and reporting standards.

• Exempted Company: Often used by international businesses; ideal for companies outside Bermuda.

• Foreign Company: Incorporated abroad but registered in Bermuda to conduct local business.

• Cooperative Societies: Formed by groups pursuing shared economic, social, or cultural objectives.

Proper incorporation ensures compliance with Bermuda’s corporate regulations. It also helps businesses efficiently manage tax filings, labour contributions, and other corporate obligations.

International corporate tax best practices

Successful international tax management requires a comprehensive approach that balances compliance with strategic planning. Companies operating across multiple jurisdictions must stay current with evolving tax laws and maintain robust documentation systems.

Establishing clear transfer pricing policies is essential for multinational operations. This includes documenting intercompany transactions, maintaining arm's length pricing, and ensuring compliance with local transfer pricing rules. Regular reviews of these policies help companies adapt to changing regulations and business circumstances.

Leveraging double taxation treaties can significantly reduce overall tax burdens. Many countries have extensive treaty networks that provide relief from withholding taxes and eliminate double taxation on the same income. Understanding these agreements and structuring operations accordingly can result in substantial tax savings whilst maintaining full compliance.

Maintaining transparent and accurate financial records is fundamental to successful international tax management. This includes implementing robust accounting systems, conducting regular internal audits, and ensuring all documentation meets local requirements. Proper record-keeping not only facilitates compliance but also supports strategic decision-making and risk management.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Bermuda efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Bermuda

Who is liable for corporate tax in Bermuda?

From 2025, only multinational enterprise groups with consolidated revenue of EUR 750 million or more in at least two of the four fiscal years preceding the tested fiscal year are liable for Bermuda's 15% corporate income tax. All other companies, including local businesses and smaller international companies, remain exempt from corporate income tax and continue to benefit from Bermuda's 0% rate.

Are there any tax incentives for businesses in Bermuda?

Bermuda offers several business incentives beyond its traditional 0% corporate tax rate for qualifying companies. These include exemptions from withholding taxes on dividends, interest, and royalties paid to non-residents. The territory also provides streamlined incorporation processes and maintains no restrictions on foreign ownership of businesses. Additionally, Bermuda has an extensive network of double taxation agreements that can provide further tax efficiencies for international operations.

What is the tax treatment of dividends in Bermuda?

For companies not subject to the new 15% minimum tax, dividends paid by Bermuda companies are generally not subject to withholding tax. This applies to both resident and non-resident shareholders. However, companies subject to the new minimum tax regime may face different treatment under the Pillar Two rules, particularly regarding distribution taxes and their interaction with the global minimum tax calculation.

What is the process for registering for corporate tax in Bermuda?

Companies that meet the EUR 750 million revenue threshold must register with the Bermuda Tax Authority for the new corporate income tax. This involves submitting detailed information about the multinational enterprise group, including consolidated financial statements and ownership structures. Registration must be completed before the first filing deadline. Companies below this threshold do not need to register for corporate income tax as they remain exempt under Bermuda's traditional system.

What are the common pitfalls to avoid regarding corporate tax in Bermuda?

The most significant pitfall is misunderstanding the scope of the new 15% minimum tax. Companies must carefully assess whether they meet the EUR 750 million threshold and understand the complex rules around multinational enterprise group calculations. Another common issue is failing to maintain adequate documentation for transfer pricing and intercompany transactions. Additionally, companies should ensure they understand the interaction between Bermuda's tax rules and their home country tax obligations, particularly regarding controlled foreign company rules and the new global minimum tax provisions.

Sources used in this article:

1. PwC Tax Summaries: Bermuda Significant Developments
2. PwC Tax Summaries: Bermuda Corporate Income Taxes
3. EY: Bermuda Corporate Income Tax Administrative Provisions
4. Bermuda Government: Types of Taxes
5. Astra Trust: Bermuda Offshore Company Formation
6. Bermuda Government: Corporate Income Tax
7. Bermuda Government: 2023 Annual GDP Publication
8. World Bank: Bermuda GDP Per Capita
9. Conyers: Investment Business in Bermuda (PDF)
10. Go to Bermuda: Year-End 2024 Tourism Measures (PDF)
11. Tetra Consultants: Guide to Company Registration in Bermuda
12. Bermuda Government: Limited Companies
13. Lawgratis: Business Law in Bermuda

Sources last checked 25/09/2025