After they have made the decision to pursue offshore incorporation, there are a lot of qualities American companies look for in a foreign jurisdiction.
(article continues below)
Corporate-friendliness, protectionist policies, and (of course) tax benefits are among the many factors that play a role in the selection process.
Bermuda has long been a desirable target for foreign incorporation. It offers multiple benefits including no income on foreign or domestic income, a stable political climate, close proximity to major U.S. cities, and a favorable regulatory environment. The process for incorporating in Bermuda is fairly straightforward, in some ways resembling the process for incorporating in another U.S. state.
- Establish a registered office. Right off the bat, you will need to rent or purchase a space to conduct business and receive official documents in Bermuda. The location you select will serve as your corporation's registered office, so choose wisely. You will also be required to maintain accurate financial documents at your registered office so they can be provided to shareholders upon request.
- Hire indigenous professionals. By hiring Bermudan professionals (e.g. accountants, attorneys, financial consultants, etc.) on a contract basis, you get access to local expertise, which is important for navigating Bermuda's laws and corporate procedures. These professionals will also help you set up bank accounts and banking procedures in Bermuda.
- Appoint directors and a corporate secretary. You are required to appoint a minimum of two directors of the corporation. These directors don't necessarily need to be citizens of Bermuda, but the requirements vary based on whether or not you choose to be an exempt company, which is accomplished by only conducting business outside of Bermuda. Your secretary should either live in or be a citizen of Bermuda so they are capable of maintaining the registered office. To make it official, sell the secretary a token amount of stock in the corporation.
- Complete corporate application. The application for incorporation must be completed and sent to the Bermuda Monetary Authority. Applicants are required to submit specific information about the company and its shareholders, and pay a substantial fee based on the corporation's capital assets.