Bermuda’s Premier Burt: CIT plus reduction of existing taxes keeps Bermuda competitive

The introduction of a 15 percent corporate income tax (CIT) assures companies in Bermuda that they are operating in a jurisdiction with a track record of complying with international standards, Premier David Burt told The Insurer TV from the sidelines of the 2024 Bermuda Risk Summit.

Speaking after his keynote conversation with Arch Capital Group CEO Marc Grandisson at the Hamilton Princess & Beach Club, Burt emphasised that changes are also coming to local tax laws to ensure Bermuda is a better jurisdiction to operate from.

“The Tax Reform Commission is looking at lowering existing taxes to ensure that Bermuda is more competitive, and a lower tax environment on the domestic side – where you have lower costs for employing persons here, lower costs for operating here – can only be beneficial in the long term.”

As previously reported, the Bermuda government passed legislation to enact the 15 percent CIT last December. The new rules will apply to companies in Bermuda that are part of multinational enterprise groups with revenues or €750mn or more. The CIT is scheduled to take effect for tax years beginning on or after 1 January 2025.

Burt maintained that the legislation is “broadly supported by industry”. However, after the government issued a paper about the tax last fall, this publication reported that shares in US-listed Bermuda (re)insurers initially dropped on the news. Analysts stated that the drop was likely an over-reaction, and shares soon rebounded.

Bermuda is also facing increased competition from nearby jurisdictions, with some firms choosing to set up in the Cayman Islands, which turned down the global minimum tax and also opposed the EU’s Solvency II directive.

But Burt remains unperturbed by any real or perceived competition.

“Imitation is the greatest form of flattery, but we are proud of what we've built,” he said.

“Let’s look, 90 percent of the ILS listings are still happening here, in Bermuda. The vast majority of cat is still happening here, in Bermuda. We're continuing to grow.”

The premier said he remains focused on maintaining Bermuda’s lead and easing the way for future innovation.

“We know that serious investors, when examining the options, will choose Bermuda, because of our track record and because of the fact that they know that they can have long-term political stability.”

Bermuda’s leadership role in climate risk finance mitigation

Burt has also worked to position Bermuda as a leader in climate mitigation efforts and climate finance innovations.

He recently engaged with the UK’s Commonwealth Secretary-General to ensure that Bermuda insurance companies are tied in to the Commonwealth Climate Finance Access Hub, which helps least developed and more vulnerable countries – often most impacted by climate change – gain expanded access to climate finance.

“The Commonwealth serves so many people around the world, and we want to make sure that we and our industry can play a part in that.”

During last year’s COP28 summit hosted by the United Arab Emirates in Dubai, Burt solidified Bermuda’s position as a leader in climate risk finance mitigation, telling The Insurer TV at the time that the island was looking to launch crucial climate goals, like its Blue Economy Fund and marine spatial plan.

Additionally, Burt strives to ensure that Bermuda implements meaningful sustainability procedures that produce positive results.

“Sustainability means that you have to practise what you preach, you can't say that we are providing risk solutions to the world for climate risk finance, when you, yourself, are not.”

The premier touted the island territory's innovative work in protecting oceans, installing solar and reducing its carbon footprint. Burt has also helped to set aggressive transition targets that he hopes are emulated globally.

“I think that is a clarion call to the larger economies, who can actually afford the work of [climate] transition, that they need to make sure they put more investment, as we all have only one planet. And if things continue to get worse, yes, the Bermuda insurance industry may benefit, but the country or the world as a whole may not.”

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