Key Takeaways
- A Canadian resident can form and own a Bermuda company remotely through a licensed local agent, without travelling to Bermuda.
- Canada's anti-deferral rules, the treaty position, and home reporting obligations all need to be checked before relying on a Bermuda company for tax purposes.
- Setting up requires identity documents and instructions supplied from Canada, plus ongoing costs, banking arrangements, and economic substance to maintain.
- Bermuda suits a narrow set of Canadian users such as insurance, funds, and holding structures rather than a cheap shell company.
Setting up a Bermuda company from Canada
A Canadian resident can register a Bermuda company without leaving home, and the practical reality is that almost no one flies in to do it. The process runs through a licensed local agent who handles formation, the registered office, and the regulatory filings, while you supply identity documents and instructions from Canada. This is what makes incorporating a company in Bermuda from Canada workable remotely: the entity exists in Bermuda, but the work of creating it is delegated and conducted at a distance.
Bermuda suits a narrow set of Canadian users well. It is relevant mainly to insurance and reinsurance businesses, investment funds, holding structures for international assets, and groups that need a recognised, well-regulated offshore base rather than a cheap shell. For a small Canadian trading business or a solo founder, the cost and substance expectations rarely justify it.
This article walks through how a person taxed in Canada sets up, owns, and runs such a company, and the home-country rules that decide whether it is a sound move. Before going further, confirm your own position with the Canada Revenue Agency, because Canadian tax law, not Bermuda law, will shape most of the outcome.
Why founders in Canada look to Bermuda
Bermuda's appeal is its combination of a zero-rate direct tax environment, a mature regulator, and a reputation that banks and counterparties accept. For insurance, captive insurance, and fund structures in particular, it carries credibility that thinner jurisdictions lack.
For a Canadian owner, the draw is rarely tax savings on its own. Canada taxes its residents on worldwide income and has rules that can pull an offshore company's profits back into your Canadian return, so the genuine reasons tend to be regulatory fit, access to a specialist market, or holding international assets in a neutral location. Treat any pitch built purely on "no tax" with caution.
Company Incorporation in Bermuda
Set up your company in Bermuda with Expanship handling registration end to end.
Company types available to non-residents
A non-resident in Canada will, in practice, use an exempted company. This is the standard vehicle for business carried on outside Bermuda, and it is the form most international owners hold.
- Exempted company limited by shares — the common choice for trading, holding, and investment activity directed abroad; foreign ownership is permitted in full.
- Exempted limited partnership — used for funds and joint ventures, with a general partner and limited partners.
- Segregated accounts company — an exempted company that legally ring-fences assets and liabilities into separate accounts, common in insurance and fund work.
- Limited liability company (LLC) — a member-managed vehicle resembling the US LLC, available for cross-border structuring.
The word "exempted" signals a company exempt from the rule restricting local-company ownership to Bermudians; it is the route for foreign owners. Local companies, by contrast, are designed for business conducted inside Bermuda and are not what a Canadian outward investor needs.
Who can incorporate: eligibility for Canada residents
There is no Canadian residency bar to owning a Bermuda entity. A Canadian individual or a Canadian corporation can hold all of the shares, and you do not need a local partner.
Two practical gates apply. First, formation of an exempted company involves regulatory consent through the Bermuda Monetary Authority, which assesses the beneficial owners; expect to disclose who ultimately owns and controls the business. Second, a licensed local agent must be engaged, because non-residents cannot file directly.
Ongoing Compliance in Bermuda
Keep your Bermuda entity compliant with filings, returns, and statutory obligations.
How to register a Bermuda company from Canada
The sequence is straightforward when run through an agent:
- Choose the entity type and reserve the company name.
- Provide beneficial-ownership and identity documents for owners and directors so the agent can complete due diligence.
- Obtain the required regulatory clearance for the beneficial owners through the Bermuda Monetary Authority.
- File the incorporation documents and pay the government fee.
- Hold the first board meeting, issue shares, and put the statutory registers in place.
- Appoint the registered office and resident representation that Bermuda law requires.
You will sign documents in Canada and return them to the agent; the filing itself happens locally.
Documents you need from Canada
Most of the friction in a remote setup is in certifying your Canadian paperwork to a standard Bermuda will accept. Expect to provide:
- A certified copy of your passport and a recent proof of address.
- A bank or professional reference, depending on the agent's due-diligence policy.
- Where a Canadian corporation is a shareholder, its constitutional documents and a register of its owners.
Canada became party to the Apostille Convention effective 11 January 2024, so apostilles are now issued by Global Affairs Canada and certain provincial authorities. Confirm whether your agent wants an apostille or traditional notarisation plus consular steps before you certify anything, because requirements differ by document.
Documents are typically notarised by a Canadian notary first, then apostilled or otherwise authenticated. Build in courier time for originals.
Bermuda Incorporation Pricing
See transparent pricing to incorporate and maintain a company in Bermuda.
Costs to set up and maintain
Costs fall into a government component and a service component. The government charges an annual fee tied to a company's assessable capital, so the figure scales with how the share capital is set; confirm the current schedule rather than assuming a flat number.
| Component | Nature | Notes |
|---|---|---|
| Government incorporation and annual fee | Statutory | Banded by assessable capital; confirm current bands |
| Registered agent | Recurring | Mandatory; priced by provider |
| Registered office | Recurring | Often bundled with the agent |
| Due-diligence / formation work | One-off | Varies with structure complexity |
| Economic-substance and filing support | Recurring | Depends on activity type |
Bermuda sits at the higher end of offshore jurisdictions on cost. Budget for meaningful annual maintenance, not a token renewal.
How long it takes
For a clean structure with straightforward owners, formation commonly runs about one to three weeks once due diligence is complete. The variable is almost always the beneficial-owner review and the time to certify Canadian documents, not the filing itself. Complex ownership, regulated activity, or incomplete identity papers can extend this.
Banking and moving money between Bermuda and Canada
Banking is the part Canadian owners most often underestimate. Opening an account for a Bermuda company is slower and more selective than incorporation, and a local bank account is not guaranteed; many international owners bank the company outside Bermuda entirely.
Expect banks to require full beneficial-ownership disclosure, a clear explanation of the business, source-of-funds evidence, and sometimes a minimum balance. A Canadian owner with a genuine operating business and clean documentation fares far better than a passive shell, which several banks will decline.
On moving money, Canada does not impose exchange controls or remittance limits, so funding the company from Canada and bringing money home is not restricted by Canadian law. What matters instead is the tax treatment of each flow, covered below, and your Canadian bank's own compliance questions when funds move to and from an offshore account.
Set up the banking relationship in parallel with formation, not after. A company that exists on paper but cannot open an account is a common and expensive stall.
Tax considerations for a Canada resident owner
This is where the decision is usually made or unmade. Bermuda's zero-tax environment does little for you if Canadian rules tax the same profits at home.
Canada's anti-deferral rules
Canada has long-standing rules that can tax an offshore company's income in the hands of a Canadian resident before any money is distributed. The foreign accrual property income (FAPI) regime applies to a "controlled foreign affiliate," broadly a foreign company controlled by Canadian residents, and it captures passive income, such as interest, rents, royalties, and certain investment gains, by attributing it to the Canadian owner annually whether or not it is paid out.
The practical effect is that parking passive income in a Bermuda company will not defer Canadian tax; the income can be taxed in Canada as it arises. Active business income is treated differently and may not be caught by FAPI in the same way, but the line between active and passive, and the rules for related-party income, are technical. Have a Canadian cross-border tax adviser model your specific income before you rely on any deferral.
The treaty position
There is no comprehensive double-tax treaty between Canada and Bermuda. That absence is normal for a zero-tax jurisdiction and it matters: you cannot claim treaty relief, reduced withholding, or treaty tie-breaker protection on flows between the two.
Canada and Bermuda do exchange tax information under international arrangements, so the structure is visible to Canadian authorities. Treat Bermuda as a non-treaty jurisdiction in all your planning.
Reporting obligations in Canada
A Canadian resident who owns or controls a foreign company carries substantial reporting duties, and the penalties for missing them are steep. Canadian residents generally must file information returns disclosing interests in foreign affiliates and holdings of specified foreign property above a threshold; the relevant forms include the foreign affiliate return and the foreign property return.
Foreign bank accounts, shareholdings, and in some cases directorships feed into these filings. Confirm the current forms, thresholds, and deadlines with a Canadian adviser, because the reporting, not the Bermuda side, is where Canadian owners most often get caught out.
Bringing profits back to Canada
Money returning to Canada is taxed under Canadian rules. A salary paid to you is employment income taxed at your personal rates; a dividend from the company is taxable in Canada, and because there is no treaty, you cannot reduce Canadian tax through treaty relief, though the foreign affiliate rules contain their own mechanics for previously taxed income.
Where FAPI has already been taxed in your hands, the system is designed to avoid taxing the same income twice on distribution, but the calculation is intricate. Do not assume a clean dividend; have the repatriation route mapped before profits accumulate.
Economic substance in Bermuda
Bermuda applies economic-substance requirements to companies carrying on certain "relevant activities," such as financing, holding, intellectual property, and insurance business. A company in scope must show adequate local activity, people, and expenditure, and file an annual substance declaration.
For a Canadian owner, this means a Bermuda company cannot be a pure mailbox if its activity is in scope; you may need real local presence or to accept that the structure is reportable as non-compliant. Determine your activity classification early, because substance obligations affect both cost and viability.
Common mistakes Canada-based owners make
- Assuming "no Bermuda tax" means no tax. Canadian worldwide taxation and FAPI often pull the income home regardless; the Bermuda rate is rarely the deciding number.
- Skipping the foreign-reporting forms. Missing the foreign affiliate or foreign property returns triggers penalties that can dwarf any saving, even when no tax was owed.
- Incorporating before securing banking. A company that cannot open an account stalls indefinitely; arrange banking in parallel.
- Underestimating substance and cost. Bermuda is a higher-cost, substance-driven jurisdiction; a thin shell may be non-compliant and expensive at once.
- Certifying documents the wrong way. With Canada now in the Apostille Convention, confirm whether your agent wants an apostille or a notarised set before paying for the wrong process.
- Treating it as a tax-only decision. The defensible reasons are regulatory fit and market access; if the only rationale is tax, the structure usually fails on Canadian rules.
Conclusion
For most Canadians, a Bermuda company earns its keep only where there is a genuine regulatory or market reason, such as insurance, fund, or international holding work, because Canada's worldwide taxation and anti-deferral rules mean the offshore rate alone will not lower your bill. It is a serious, higher-cost jurisdiction, not a shortcut.
The single thing to confirm before you commit is how FAPI and the foreign-reporting rules apply to your specific income, modelled by a Canadian cross-border tax adviser. Get that answer first; everything else follows from it.
How Expanship Can Help You Incorporate in Bermuda
Expanship acts as the on-the-ground link for a Canada-based owner, handling formation, the regulatory submissions, and the local presence a Bermuda company needs while you sign and instruct from Canada. Beyond setup, the firm supports the ongoing obligations that keep a foreign-owned entity in good standing.
- Company incorporation and name reservation
- Registered agent and registered office
- Economic-substance assessment and tax registration support
- Annual compliance and filing management
- Accounting and bookkeeping
- Introductions to banking providers
To discuss your structure and confirm the right approach for your situation, contact Expanship Bermuda.
Frequently Asked Questions
Yes. The entire process runs through a licensed local agent, and you sign and certify documents in Canada, so a personal visit is not normally required.
Yes. An exempted company can be wholly owned by a Canadian individual or corporation with no local partner, subject to beneficial-ownership disclosure to the regulator.
Possibly, but it is the hardest step and not guaranteed. Banks require full ownership disclosure, source-of-funds evidence, and a clear business rationale; many international owners bank the company outside Bermuda.
Often not. Canada taxes residents on worldwide income, and the FAPI rules can tax the company's passive income in your hands before any distribution, so the zero Bermuda rate frequently does not change your Canadian outcome.
For a clean structure, roughly one to three weeks once due diligence is complete. Certifying your Canadian documents and the beneficial-owner review are the usual sources of delay.
A Canadian resident generally must file information returns covering foreign affiliates and specified foreign property above a threshold, and disclose foreign accounts. Confirm the current forms and deadlines with a Canadian tax adviser, as penalties for omission are significant.
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.
