HSBC Treasury Management Profiles 2018 -

Current section, Introduction

Introduction

Bermuda is the oldest and most populous of the British overseas territories. Self-governing since 1620, Bermuda has developed into a successful offshore financial centre which accounts for about 85 per cent of GDP. Tourism is the island’s second most important industry (in 2015, the latest government figures available, direct tourism contributed 4.2 per cent to Bermuda’s GDP). The industrial and agricultural sectors are small and limited by the size of the island; Bermuda imports about 80 per cent of the food consumed by its population. Bermuda’s most important trading partner is the USA (90 per cent of exports and 70 per cent imports in 2016). While the territory enjoys one of the highest per capita incomes in the world, Bermuda’s economy slipped in to recession in Q4 2016 (Bermuda emerged from a six-year recession when it returned to growth in 2015). GDP fell 2.4 per cent after inflation compared to the same period a year earlier, following a fall of 2.2 per cent in Q3 2016. GDP fell 0.2 per cent after inflation year on year in Q1 2017. Unemployment, stagnant wages (a new parliamentary committee has been established to examine a living wage policy in Bermuda) and growing public debt (around 40 per cent of GDP) remain pressing issues.

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Legal and regulatory

  • Foreign exchange accounts can be held by residents both domestically and abroad
  • Non-resident bank accounts are permitted in both foreign and domestic (BMD) currency
  • The BMD is not exportable, cashable, exchangeable by any foreign banks or used by traders globally; it is used only by local businesses and residents. Bermuda-based international companies use USD

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Taxation

  • Companies are designated as: local companies (incorporated by Bermudians to trade primarily in Bermuda), exempted companies (incorporated by non-Bermudians for the purpose of conducting business outside Bermuda) or permit companies (overseas companies that have received a permit to carry on business in or from within Bermuda)
  • There are no corporate taxes on income, profits or capital gains. Profits can be accumulated and it is not obligatory to pay dividends

To read the detailed report, please click on the Download PDF option.

Payment instruments and systems

  • Cash is an important payment medium in Bermuda, particularly for low-value retail transactions. Electronic credit transfers are used for both high-value corporate and low-value retail payment transactions. Cheques, which can be denominated in BMD or USD, remain a popular payment instrument used by consumers and companies. Payment card use is increasing
  • Local electronic payments are effected between banks through a series of bilateral arrangements

To read the detailed report, please click on the Download PDF option.

Cash management

  • Notional pooling is restricted to Bermuda-based single currency accounts. Cash concentration is permitted in Bermuda and multiple currency account structures are allowed
  • Deposit bag services are available

To read the detailed report, please click on the Download PDF option.

Electronic banking

  • Electronic banking is offered by many of the country’s banks
  • Internet and mobile banking services are provided by Bermuda’s banks for both corporate and retail purposes. Penetration rates are 96.3 per cent and 95 per cent respectively

To read the detailed report, please click on the Download PDF option.

 

 


To read the full report on Bermuda and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.

Sources:

  • Bermuda Monetary Authority
  • Government of Bermuda
  • Department of Statistics
  • World Integrated Trade Solution

The materials contained on this page were assembled in June 2017 (unless otherwise dated).


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