Key Takeaways
- A Permit Company is a foreign company authorized to operate in Bermuda under a permit rather than a locally incorporated entity.
- Liability tends to remain linked to the foreign parent company, since the permit holder is the same legal entity operating abroad.
- Permitted activities are defined and restricted, so owners should confirm their intended operations fit within the permit's scope.
- Taxation, permanent establishment treatment, and ongoing reporting obligations shape whether this structure suits a non-resident business.
Understanding the Permit Company in Bermuda
A permit company in Bermuda is not a fresh incorporation. It is your existing foreign company, operating in or from within Bermuda under a permit granted by the government, while keeping its home-jurisdiction legal personality intact.
Bermuda sorts corporations into three groups: local, exempted, and permit companies. The permit category exists for overseas businesses that want a direct operational footing on the island without creating a separate Bermuda entity, and the Registrar of Companies sits within the Ministry of Economic Development to administer it.
This guide explains what a permit company is, how it is taxed and regulated, who tends to use it, and the obligations that follow once a permit is granted. It is most relevant to foreign groups, particularly insurers, fund managers, and holding companies, that need a Bermuda presence under their own corporate identity rather than through a local subsidiary.
One practical point applies from the outset: foreign companies cannot use Bermuda's online registration system. A local corporate service provider, law firm, or accounting firm must be engaged to make the application.
Legal Basis and Governing Law of the Permit Company
The Companies Act 1981, with its amendments, is the principal statute behind every Bermuda company arrangement, including the permit company. Part XI of that Act, headed "Overseas Companies," sets out the framework that matters to you, from the prohibition on carrying on business without a permit through to the rules on grant, conditions, annual fees, and revocation.
In the Act's own terms, an "overseas company" is any body corporate incorporated outside Bermuda other than a non-resident insurance undertaking, and a "permit company" is any such company holding a valid permit. The permit itself is issued under section 134, and the grant is governed by section 129.
A permit company is classified as an "exempted undertaking," placing it alongside exempted companies and exempted partnerships for tax and exchange-control purposes. It is expressly bound by section 2 and Parts III, V, XI, and XIII of the Act, with a carve-out for the Part XIII sections dealing only with members' voluntary liquidations.
The legislative text changes from time to time. The Beneficial Ownership (Consequential Amendments) Order 2025, effective 3 November 2025, amended several provisions of the Companies Act 1981 and repealed others, so any application should rely on the current consolidated version of the Act rather than an older copy.
Several provisions affecting permit companies were amended through 2024 and 2025. Confirm the wording and any fee against the current consolidated Companies Act 1981 before you file.
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Defining Features: A Foreign Company Operating Under a Permit
The defining feature is straightforward: the permit company is the foreign parent itself. No separate Bermuda legal personality is created, so every right and obligation in Bermuda flows through the overseas entity.
Your home-jurisdiction share capital, ownership, and governance structure carry over unchanged. There is no Bermuda share capital to draft and no local corporate veil layered on top of the parent.
For exchange control, permit companies are treated as non-residents, the same classification given to exempted companies and partnerships, unless 80% or more of the issued share capital is beneficially owned by Bermudians. That status lets the company pay dividends, distribute capital, hold bank accounts in any currency, and buy securities without local exchange-control restriction.
A local anchor is still required. The Act obliges a permit company to appoint a principal representative resident in Bermuda, who serves as the local point of contact for the Registrar.
Permitted Activities and Restrictions for Permit Companies
The permit authorises business "in or from within" Bermuda, which means both local and international operations are possible depending on what the permit allows. The scope is not open-ended; section 135 of the Act deals specifically with restrictions on a permit company's activities, and the precise limits are fixed by the conditions attached to each individual permit.
Approval rests on the Minister's assessment of the company's economic impact and conduct, so the conditions imposed are bespoke. Where the proposed business touches the restricted activities in the Ninth Schedule, separate Ministerial consent is required.
Certain dealings are licence-exempt. A permit company may transact with other exempted undertakings in furtherance of business carried on outside Bermuda, and it may act as manager, agent, consultant, or adviser to an affiliated exempted or permit company.
- Reinsurance is expressly contemplated: section 136 of the Act addresses a permit company reinsuring with other Bermuda insurers.
- Regulated sectors carry an extra layer. Insurance, investment business, trust business, and banking each require separate licensing from the Bermuda Monetary Authority on top of the permit.
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Liability and the Link to the Foreign Parent Company
Because the permit company is the foreign parent operating directly, the parent bears full liability for everything done under the permit. There is no separate Bermuda subsidiary and therefore no new Bermuda liability shield.
Whatever liability limitation your company enjoys in its home jurisdiction continues to apply; the permit does not alter the parent's liability profile toward its own shareholders. Creditors who deal with the permit company in Bermuda are contracting with the foreign entity itself, and their claims reach the parent and its global assets.
This exposure is the principal trade-off against the convenience of keeping a single legal entity. A foreign group that wants Bermuda creditors confined to a ring-fenced local balance sheet would instead incorporate an exempted Bermuda company.
Penalties for operating outside the permitted scope are real. Where a company carries on a restricted activity in breach of the Act, the court may wind it up on the Registrar's application, and a default in obtaining Ministerial consent exposes the company and every officer in default to a fine of $100 for each day the default continues.
Typical Uses and Who Chooses a Permit Company
Foreign groups reach for a permit company when they want a direct operational presence in Bermuda without standing up a separate local entity. The vehicle suits situations where keeping one consolidated legal identity matters more than ring-fencing.
| User | Typical purpose |
|---|---|
| Foreign insurers and reinsurers | Bermuda underwriting platform |
| Fund managers and asset managers | Booking or management office |
| Foreign holding companies | Group treasury or headquarters functions |
| Intra-group service entities | Manager, agent, consultant, or adviser to affiliates |
The intra-group case is well supported by the Act, since acting as manager, agent, consultant, or adviser to an affiliated exempted or permit company is a licence-exempt activity. (Re)insurance groups are particularly common users given the express treatment of permit companies in the reinsurance context.
For purely offshore business with no need for a single global entity, the exempted Bermuda company is chosen more often. The permit company's activities are more tightly bounded by permit conditions, and it remains within scope of the Bermuda Economic Substance Act, so groups that need genuine substance on the island may find it a fit while others will not.
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Taxation and Permanent Establishment Treatment
Bermuda imposes no tax on profits, income, or dividends, and levies no capital gains tax, estate duty, or death duty. A permit company therefore faces no Bermuda-level income tax of the conventional kind, and its non-resident exchange-control status gives it free access to foreign currency accounts and cross-border capital movement.
One material change affects large groups. Bermuda introduced a 15% corporate income tax under the Corporate Income Tax Act 2023, effective 1 January 2025, applying to in-scope entities, broadly those in multinational groups with annual global revenue of EUR 750 million or more. A permit company within such a group must assess its position, and the tax applies notwithstanding any Tax Assurance Certificate previously issued by the Minister of Finance.
As an exempted undertaking, a permit company may apply for a Tax Assurance Certificate, subject to that corporate income tax override for in-scope multinationals. The certificate offers assurance against the introduction of certain future taxes, but it does not override the new regime for affected groups.
The permanent establishment question sits outside Bermuda. Since the permit company is the foreign parent operating directly on the island, the parent's Bermuda activity may create a permanent establishment in the parent's home country under that country's domestic law and any relevant treaty. There is no Bermuda-side income tax, so the PE exposure lies entirely in the home jurisdiction.
Bermuda's network of tax treaties is narrow. Its treaty with the United States, signed in 1986 and in force from 1988, is limited to insurance enterprises and exempts the insurance business profits of qualified Bermuda insurers from US taxation unless a US permanent establishment exists.
On economic substance, a permit company is in scope as an entity registered under the Companies Act 1981. An entity that is tax-resident in a jurisdiction outside Bermuda and not on the EU blacklist can qualify as a "non-resident entity," which is excluded from the registered-entity definition; each permit company should test whether it meets that exclusion.
Compliance, Reporting, and Ongoing Obligations
Annual obligations are the recurring cost of holding a permit. The annual fee is tiered by the company's principal business and whether it has a physical presence in Bermuda, with finance, insurance, and open-ended mutual fund business attracting one rate, a physical Bermuda presence another, and other cases a further rate.
The tiered annual fee figures in circulation derive from a 2021 government notice, and a 2023 amendment plus 2024 regulatory fee changes are in effect. Confirm the rate that applies to your company with the Registrar before budgeting.
Deadlines have moved, and this needs care. Fees and declarations for overseas companies were historically due on or before 31 March each year, with a $300 penalty for late submission. Following the 18 August 2024 regulatory fee amendment, regulatory fees for overseas companies are stated to fall due alongside annual fees on or before 31 January; because the change is recent, verify with the Registrar which deadline now governs your filing.
Beyond the annual fee, several regimes apply:
- Economic Substance Declaration: an in-scope entity files an annual ESD with the Registrar, due six months after its financial year end.
- Beneficial ownership: the company maintains a register of beneficial owners, meaning individuals who own or control more than 25% of shares or voting rights, or who otherwise exercise control.
- AML/ATF: the Registrar conducts active compliance monitoring in line with FATF recommendations.
- FATCA and CRS: Bermuda adopted CRS early, with reporting applying to financial accounts in existence from 1 January 2016; new financial institutions register or notify by 30 April, with reporting due by 31 May of the following year.
- Principal representative: a Bermuda-resident principal representative must be maintained as the local compliance contact.
Audit and financial statement filing requirements for permit companies are governed by the Part XI provisions of the Act. The detailed position should be confirmed against the current consolidated text with your service provider, as the specifics turn on the company's activities and permit conditions.
Advantages and Limitations of the Permit Company
The appeal of the structure is the single legal entity. You operate directly in and from Bermuda without forming a separate company, while drawing on the same tax and exchange-control treatment as an exempted company.
Advantages worth weighing:
- Non-resident exchange-control status, allowing free dividends, capital distributions, foreign currency accounts, and cross-border securities purchases.
- No Bermuda capital gains tax, estate duty, or withholding tax, and no conventional corporate income tax outside the in-scope multinational regime.
- Express access to the reinsurance market under section 136 of the Act.
- Eligibility to apply for a Tax Assurance Certificate, subject to the corporate income tax override.
Set against these are real constraints:
- Approval is discretionary; the Minister weighs the company's economic impact and conduct before granting a permit.
- The permit carries conditions and can be revoked, which would end the company's authority to operate.
- No separate Bermuda personality exists, so the parent's entire global balance sheet is exposed to Bermuda creditors.
- Activities are confined to the permit, and a change of business requires amending the permit conditions.
- Economic substance rules may require demonstrable presence, staff, and local management and direction.
- A local corporate service provider is mandatory, and the parent's home tax authority may treat Bermuda operations as a permanent establishment.
Permit Company Registration: A Brief Overview
Application runs to the Registrar of Companies, and the Minister must approve after considering the economic impact and conduct of the overseas company. The permit is issued under section 134, with the grant governed by section 129.
Documents typically required include:
- A certified copy of the company's certificate of incorporation from its home jurisdiction.
- A certified copy of its constitutional documents, such as the memorandum and articles of association.
- Details of the proposed Bermuda activities, which form the basis for permit conditions.
- Personal declarations and KYC information from proposed beneficial owners.
- Appointment of a Bermuda-resident principal representative.
On timing, a straightforward Bermuda company not needing Ministerial consent can be formed within a day, but a permit always involves Ministerial consideration of economic impact. The practical standard is up to roughly one week once the Registrar holds all information and personal declarations, with regulated or complex applications taking longer.
Official fees are set by the Registrar's published schedule and revised periodically; as of 1 January 2024 new annual corporate regulatory fees took effect, reflecting the Registrar's expanded role in economic substance, AML/ATF, and beneficial ownership maintenance. Permit-specific fees under Part XI should be confirmed directly with the Registrar, and late fees attract a $300 penalty. The full step-by-step process is covered in our separate incorporation guide.
Conclusion
A permit company lets a foreign business trade in and from Bermuda under its own corporate identity, with the island's tax and exchange-control treatment, but without the protection of a separate local entity. That single-entity simplicity is also its main risk, because the parent carries full liability and may trigger a permanent establishment in its home country. Approval is discretionary, activities are bound by permit conditions, and economic substance and reporting duties apply. For a foreign group that genuinely needs a direct Bermuda presence, particularly in (re)insurance or intra-group services, the structure is well suited; for ring-fenced offshore business, an exempted Bermuda company is usually the better route.
How Expanship Can Help Your Business in Bermuda
Expanship advises foreign groups on whether a permit company fits their objectives, prepares the application to the Registrar, and manages the Ministerial approval process from document collection through to the appointment of a Bermuda-resident principal representative. The same team supports the wider needs of a foreign-owned entity on the island.
- Company incorporation and permit applications
- Registered agent and principal representative services
- Tax registration, Tax Assurance Certificates, and filing support
- Ongoing compliance, economic substance, and beneficial ownership management
- Accounting and bookkeeping
- Introductions to Bermuda banking partners
To discuss your structure and the documents you will need, contact Expanship Bermuda.
Frequently Asked Questions
No. A permit company is your existing foreign company operating under a permit, so it keeps its home-jurisdiction legal personality and no separate Bermuda entity is created. All Bermuda rights and obligations flow through the foreign parent.
It does not add a Bermuda liability shield. Because the permit company is the parent itself, the parent bears full liability for activities conducted under the permit, and creditors' claims reach its global assets, governed by the law of its home jurisdiction.
No. Foreign companies cannot use Bermuda's online registration system, so a local corporate service provider, law firm, or accounting firm must be engaged to make the application and act as the local contact.
A permit always requires Ministerial consideration of the company's economic impact, so the practical timeline is up to roughly one week once the Registrar has all required information and beneficial-owner declarations. Regulated or complex applications can take longer.
Only if it forms part of an in-scope multinational group. Bermuda's 15% corporate income tax, effective 1 January 2025, applies broadly to groups with global revenue of EUR 750 million or more, and it overrides any Tax Assurance Certificate the company holds; smaller companies face no conventional Bermuda income tax.
It can. A permit company is within scope of the Bermuda Economic Substance Act as a registered entity, though an entity tax-resident outside Bermuda and not on the EU blacklist may qualify as an excluded non-resident entity. Each company should test its status and, where in scope, file its annual declaration with the Registrar.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
