Permit Company Branch in Bermuda for Foreign Firms

Understanding the Permit Company Branch in BermudaCopy link to section

A permit company branch in Bermuda lets a business already incorporated abroad operate locally without forming a new Bermudian entity. The foreign parent applies for a permit from the Minister of Finance, and the branch carries on its authorised activities under that permit. Crucially, the branch has no legal personality of its own; it is the overseas parent itself, registered to do business on the island under the Companies Act 1981.

This guide explains what the permit vehicle is, how the parent's liability works, the tax and substance position, and the practical compliance a foreign owner takes on. It is most relevant to overseas insurers, financial groups, and service businesses that want a direct presence here while continuing to trade under their existing corporate identity.

Legal Basis and Governing Law for Permit CompaniesCopy link to section

The governing statute is the Companies Act 1981, administered by the Registrar of Companies (ROC), a department within the Ministry of Finance. An "overseas company" under the Act is any body corporate incorporated outside the island, and a permit company is one holding a valid permit issued under section 134.

Permit companies are not subject to the whole Act. Only section 2 and Parts III, V, XI and XIII apply, with members' voluntary liquidation provisions in Part XIII carved out.

Part V is the operative part for this vehicle. It covers the grant of a permit, annual fees, the conditions a permit may carry, the appointment of a principal representative, alteration and revocation of permits, appeals to the Supreme Court, the register of permit companies, restrictions on activities, record-keeping, and service of process.

Several recent changes affect the consolidated text. The Beneficial Ownership (Consequential Amendments) Order 2025 took effect 3 November 2025 and touched sections including 2, 14, 131 and 135, while amendments tied to the Corporate Income Tax Act 2023 became operative 1 January 2025.

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Defining Features: A Foreign Company Operating Under PermitCopy link to section

The defining point is that no separate Bermudian entity comes into existence. The permit company is the foreign parent operating directly, so its constitution, share capital, and directors remain those of its home jurisdiction.

Bermuda law governs the branch only where the Companies Act expressly requires it. Internal matters such as share structure and board governance stay under the parent's home-jurisdiction rules, and Bermuda sets no minimum share capital for the vehicle.

Ownership can be entirely non-Bermudian. Because the company is incorporated elsewhere, the 60/40 local-ownership rule that binds ordinary local companies does not apply, and the permit company is treated as an "exempted undertaking" for these purposes.

Each permit carries conditions set by the Minister, who may attach or vary them. A principal representative must be appointed locally as a condition of operating.

Permitted Activities and Restrictions on Local BusinessCopy link to section

A permit authorises business "in or from within Bermuda." That phrasing matters: the branch may serve the local market and also use the island as a base for activity directed abroad, in each case only within the activities the permit names.

This distinguishes the permit company from an exempted company. An exempted company is generally barred from local business, whereas a permit company may be authorised to trade in the local market depending on its permit conditions. The vehicle is, in effect, the statutory route for a non-Bermudian-controlled business to obtain ministerial consent to operate locally.

Certain incidental activities are open to permit companies as exempted undertakings:

• Dealing with other exempted undertakings in furtherance of business conducted outside the island
• Dealing in securities of exempted undertakings, local companies, or partnerships
• Acting as manager, agent, consultant, or adviser to affiliated exempted or permit companies
• For insurers, reinsuring risks of locally licensed insurers

Regulated business carries an extra layer. Banking, insurance, fund management, and similar activities need licensing from the Bermuda Monetary Authority on top of the permit. The Minister weighs the economic impact and conduct of the applicant before granting approval, and may revoke a permit under the Act's procedures, subject to a right of appeal to the Supreme Court.

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The Link to and Liability of the Parent CompanyCopy link to section

There is no liability shield. Because the permit company is the parent, every contract, debt, and obligation taken on through the branch is an obligation of the parent, and creditors of the branch may pursue the parent's worldwide assets.

A principal representative must be appointed in Bermuda to act as the local point of contact and agent for service of process. Process served on that representative binds the parent directly.

The parent discloses its own constitutional documents and ownership to the ROC rather than drafting any Bermuda memorandum. Should the parent be wound up in its home country, the permit lapses or becomes subject to revocation proceedings.

Taxation and Permanent Establishment TreatmentCopy link to section

Bermuda imposes no income tax, no capital gains tax, and no withholding tax on dividends, interest, royalties, or service payments. There is also no domestic concept of corporate tax residence, so the permanent-establishment question that drives branch taxation elsewhere has no domestic relevance here. Public revenue instead comes from payroll tax, customs duty, stamp duty, land tax, and permit and licence fees.

One change reshapes this for large groups. The Corporate Income Tax Act 2023 introduces a 15% corporate income tax aimed at multinational groups with consolidated revenues of EUR 750 million or more, aligned with the OECD Pillar Two model; related amendments to the Exempted Undertakings Tax Protection Act 1966 became operative 1 January 2025. A permit company within such a group may fall in scope, and specialist advice is essential.

Economic substance is the other live obligation. A permit company is a "registered entity" for purposes of the Economic Substance Act 2018, so if it carries on a relevant activity and is not a non-resident entity, it must meet substance requirements.

Branches of overseas companies are within scope without any need to be tax resident locally. An entity that can demonstrate tax residence in a qualifying jurisdiction outside the island is treated as a non-resident entity and falls out of scope, and a genuine foreign permanent establishment performing the core income-generating activity may be taken into account by the Registrar. Income reported in Bermuda, rather than in that foreign establishment, remains subject to substance requirements.

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Ongoing Compliance and Reporting ObligationsCopy link to section

Annual obligations centre on the section 135 fee and declaration, the substance filing, and the beneficial ownership register. The annual fee is tiered by activity type and physical presence, with finance and insurance business at one level and a permit company without a qualifying local presence at the top of the scale.

The fee schedule was revised effective 1 January 2024 and again in August 2024, and earlier published figures should not be relied on. Confirm the current rates directly with the Registrar of Companies before budgeting.

Late payment of fees attracts a penalty of BD$300. Note that the August 2024 amendment moved regulatory fees to a 31 January deadline; your adviser should confirm how that interacts with the prior March deadline that applied to permit companies.

A beneficial ownership register must record any individual who owns or controls more than 25% of shares or voting rights, or who otherwise exercises control. Part V also requires the branch to keep records in the island, imposes letterhead requirements, and permits the ROC to investigate the company's affairs.

There is no requirement to file accounts publicly, consistent with the island's general approach, though the parent must keep proper books under its home law and produce accounts if permit conditions or an investigation require it. Any staff employed locally fall within Bermuda payroll tax regardless of the employer's form.

Advantages and Limitations of the Permit Company BranchCopy link to section

The vehicle suits a foreign company that wants to operate under its existing identity without forming and governing a new local entity. It can be authorised to trade in the local market, it carries no separate Bermuda share capital or constitution to draft, and it sits within the island's no-income-tax, no-capital-gains-tax, no-withholding-tax framework, subject to the corporate income tax rules for very large groups.

Set against that, the absence of a liability shield is the central drawback. The parent stands behind every branch obligation, the permit requires ministerial approval and can be refused, conditioned, or revoked, and the parent's affairs are open to investigation under Part V.

• Annual fees can be significant for a permit company without a qualifying local presence, and substance obligations apply where the branch carries on a relevant activity.
• A permit company cannot use the ROC's online registration system; a local corporate service provider must be retained throughout.

When a Permit Company Branch Fits, and When a Local Entity May Be BetterCopy link to section

The branch fits where an existing foreign company wants to transact directly here, employ staff, or hold a local office, and where the group accepts that branch obligations rest on the parent. It is common where a well-capitalised parent in insurance, reinsurance, or financial services trades on its home reputation and where the activity is authorisable under a permit without a local ownership structure.

A separate Bermudian entity is usually the better route in other cases:

• You want to ring-fence local liability from the parent's global balance sheet.
• The business will be conducted mainly outside the island and an exempted company better suits that profile.
• A distinct local legal person is needed to contract as a local obligor or to hold local real property, which permit companies face restrictions on.
• A 60%-plus locally owned vehicle is appropriate or required for a particular licence.
• The group plans to list on the Bermuda Stock Exchange, which requires an incorporated entity.
• Home-jurisdiction tax treaty access needs preserving, since operating through a branch rather than a subsidiary can affect treaty eligibility.

A Brief Overview of Establishing a Permit Company BranchCopy link to section

Applications run through the Registrar of Companies and require ministerial approval under section 134. Because a foreign company cannot use the online system, the first step is engaging a locally licensed law firm, accounting firm, or corporate service provider, who conducts due diligence and files on your behalf.

1. Retain a local corporate service provider and complete KYC/AML on the parent and its beneficial owners.
2. Submit the permit application to the ROC and Minister of Finance with supporting documents.
3. The Minister considers the economic impact and conduct of the company.
4. On approval, the permit issues and the company is entered in the register of permit companies.
5. Appoint a principal representative and register with the Tax Commissioner and other bodies as required.

The application pack typically includes a certified certificate of incorporation and constitutional documents, evidence of good standing, director and officer appointment evidence, beneficial owner declarations, a description of proposed activities, a local registered office address provided by the service provider, and identification for directors and owners.

On government fees, the Government Fees Amendment Regulations 2023, effective 1 April 2023, set a BD$340 fee for considering a section 6 registration application and BD$100 for reserving a name. A specific section 134 permit fee is not stated in the publicly retrieved schedules, so verify the current figure with the Registrar of Companies or ask Expanship to confirm it.

Where ministerial consent is needed, the ROC can process within about a week of receiving all required information and beneficial owner declarations. In practice, service-provider due diligence adds several weeks, so allow roughly three weeks overall. No physical presence is required at registration for a branch carrying on business outside the island, though a principal representative and registered office must be in place.

ConclusionCopy link to section

A permit company branch gives a foreign business a direct, recognised route to operate in or from Bermuda under its own corporate identity, with access to the island's no-direct-tax framework. The trade-off is exposure: the parent answers for every branch obligation, the permit depends on ministerial discretion, and substance and beneficial ownership rules apply. If liability separation, local property holding, or a distinct local legal person matters to you, a Bermuda-incorporated company is likely the better choice. Weigh the parent's profile, the intended activities, and the group's tax position before deciding.

How Expanship Can Help Your Business in BermudaCopy link to section

Expanship guides overseas companies through the permit application from end to end, acting as your local corporate service provider, preparing the KYC pack, and managing the filing to the Registrar and Minister of Finance. Beyond the permit itself, we support the wider needs of a foreign-owned presence on the island.

• Company incorporation and permit registration for overseas companies
• Principal representative, registered agent, and registered office services
• Tax registration and annual filings, including economic substance
• Ongoing compliance management and beneficial ownership records
• Accounting and bookkeeping aligned with home-jurisdiction requirements
• Introductions to local banking relationships

To discuss whether a permit company branch suits your business, contact Expanship Bermuda.

Frequently Asked QuestionsCopy link to section