Key Takeaways
- A US resident can incorporate, own, and direct a Bermuda company remotely, with a licensed local corporate service provider acting as registered agent and meeting local presence requirements.
- Bermuda tends to suit US owners structuring investment holding vehicles, reinsurance or insurance entities, funds, or international groups rather than small operating businesses with US-source income.
- Owners must weigh US tax considerations, including controlled-foreign-company and anti-deferral rules, the treaty position, and annual US reporting obligations.
- Practical setup involves providing documents from the United States, budgeting for setup and maintenance costs, and arranging banking to move money between Bermuda and the United States.
Setting up a Bermuda company from United States
Registering a Bermuda company from the United States is a well-trodden path, and the process works almost entirely by correspondence. You do not need to travel to the island, and you can own and direct the entity from a US address. What makes it workable remotely is the role of a licensed local corporate service provider, which acts as your registered agent, handles the filings, and meets the local presence requirements on your behalf.
Bermuda suits a specific kind of US owner: someone structuring an investment holding vehicle, a reinsurance or insurance entity, a fund, or an international group that benefits from a stable, English-language common-law jurisdiction with a long regulatory track record. For a small operating business with US customers and US-source income, the case is usually weak, because the United States taxes its residents and citizens on worldwide income and applies anti-deferral rules that can pull the profit straight back into your US return. The Internal Revenue Service publishes guidance on foreign business reporting that every prospective owner should read before committing.
This article covers how a US resident forms, owns, banks, and runs a Bermuda entity, and the home-country rules that decide whether the move makes sense at all.
Why founders in United States look to Bermuda
The draw is structural rather than purely about tax. Bermuda imposes no corporate income tax, no capital gains tax, and no withholding tax on dividends paid to non-residents, which removes one layer of friction for cross-border holding and investment structures.
Beyond the fiscal point, the territory has a deep concentration of reinsurance and captive insurance expertise, a respected regulator, and courts that draw on English common law. For US founders, that combination matters most where institutional counterparties, investors, or insurers already expect a Bermuda vehicle. It carries far less weight for an ordinary trading company whose income and customers sit inside the United States.
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 US owner typically uses one of a small set of vehicles. The exempted company is the standard choice for international business, since it is permitted to carry on activities outside the island and is owned by non-residents.
- Exempted company limited by shares — the workhorse for holding, investment, and international trading structures owned from abroad.
- Exempted limited liability company (LLC) — a member-managed vehicle with a flexible operating-agreement structure, sometimes preferred by US owners for its familiarity.
- Segregated accounts company — used where assets and liabilities must be ring-fenced into separate cells, common in insurance and fund structures.
- Exempted limited partnership — frequently used for fund and investment vehicles, with a general partner and limited partners.
A "local" company that trades within the domestic economy generally faces Bermudian ownership requirements and is rarely the right fit for a foreign owner. The exempted forms above are what a US resident will almost always use.
Who can incorporate: eligibility for United States residents
There is no nationality bar. A US citizen or resident can own up to 100 percent of an exempted company or LLC, and there is no requirement to take on a local shareholder.
Formation of an exempted company involves a consent process with the Bermuda Monetary Authority, which reviews the beneficial owners before the entity is registered. You will need to provide identity and source-of-funds information as part of standard due diligence. A registered office and a local registered agent are mandatory; both are supplied by your service provider.
Ongoing Compliance in Bermuda
Keep your Bermuda entity compliant with filings, returns, and statutory obligations.
How to register a Bermuda company from United States
The sequence is administrative and runs through your local agent.
- Choose the entity type and reserve the company name.
- Complete due diligence: identity documents, proof of address, and beneficial-ownership disclosure for the regulator.
- Obtain the regulator's consent to the proposed ownership structure.
- File the incorporation documents and memorandum, and pay the government fee.
- Hold the first board meeting, issue shares or admit members, and adopt bye-laws or the operating agreement.
- Register for economic-substance purposes and put the registered office and agent in place.
The due-diligence and regulator-consent step is where US-based applications slow down. Having certified passports, proof of address, and a clear source-of-funds narrative ready before you start removes most of the delay.
Documents you need from United States
Most documents you provide will be personal identity and verification papers, and several will need to be certified or apostilled in the United States before they are accepted.
| Document | Usual form for a US applicant |
|---|---|
| Passport copy | Certified by a US notary; apostille sometimes requested |
| Proof of residential address | Recent utility bill or bank statement, certified copy |
| Bank or professional reference | Original on letterhead |
| Source-of-funds evidence | Bank records, sale documents, or pay statements |
| Corporate documents (if a US entity is the shareholder) | Certificate of good standing, apostilled |
An apostille is issued by the Secretary of State in the US state where the notary is commissioned; the US State Department handles federal documents. Confirm with your agent whether a plain notarisation or a full apostille is required for each item, because requirements vary by document and provider.
Bermuda Incorporation Pricing
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Costs to set up and maintain
Budget by component rather than by a single headline number. The recurring obligations matter more than the one-off setup for most owners.
- Government incorporation fee — payable to the registry on formation; the amount varies by the entity's authorised share capital band, so confirm the current official figure for your structure.
- Annual government fee — payable each year to keep the company in good standing, again scaled by capital.
- Registered agent and registered office — annual fees charged by your local provider.
- Economic-substance and compliance filings — annual, with cost depending on the company's activity.
- Optional — accounting, director services, and regulated-activity licensing where relevant.
Expect Bermuda to sit at the higher end of offshore-jurisdiction cost. Government and professional fees here are materially above the cheaper Caribbean alternatives, which is part of why it suits substantial structures rather than small ones.
How long it takes
Once due diligence is complete and the regulator's consent is in hand, incorporation itself is quick, often a few business days. The realistic end-to-end timeline runs from roughly two to six weeks, driven mostly by how fast you supply certified documents and clear the beneficial-ownership review. Opening a bank account is a separate process that frequently takes longer than the incorporation.
Banking and moving money between Bermuda and United States
Banking is the single hardest part of the project for a US owner, and it deserves the most attention. The pool of banks willing to onboard a non-resident-owned exempted company is small, and they apply heavy due diligence, particularly to accounts connected to US persons because of the reporting burden US ownership creates for them.
Expect to provide the full corporate file, beneficial-ownership detail, a clear business rationale, and a credible source-of-funds and source-of-wealth account. Many US owners hold the operating account with a bank outside Bermuda, or with a US institution, and keep the Bermuda relationship narrow. Plan banking in parallel with incorporation rather than after it.
On the movement of money, Bermuda imposes no exchange controls on exempted companies, so the entity can hold and move foreign currency freely; the constraints you face are US-side, not Bermudian.
Every foreign account a US person controls can trigger US reporting. A Bermuda company account with US signatories or US beneficial owners brings the company, the account, and the owner into the US disclosure regime.
When you bring profit home, the tax event happens under US rules. A dividend, a salary, or a distribution from the entity is reported and taxed on your US return; there is no Bermudian withholding to offset, and because the company pays no local income tax there is generally no foreign tax credit to claim against the distribution.
Tax considerations for a United States resident owner
This is where the decision is usually made. Bermuda's zero-tax environment does not shelter a US owner, because the United States taxes worldwide income and runs strong anti-deferral rules.
Controlled-foreign-company and anti-deferral rules
If US persons own more than half of a foreign company by vote or value, it is a controlled foreign corporation, and the US shareholders can be taxed on certain categories of the company's income as it arises, even if nothing is distributed. Passive income, much investment income, and certain related-party income fall into the categories that are taxed currently under Subpart F, and the broader global intangible low-taxed income regime can sweep up much of what remains. In practice, a wholly US-owned Bermuda company offers little or no deferral; profits are likely taxed to you in the year they are earned.
The detail of how Subpart F and the global intangible income rules apply, and at what effective rate after any deduction or credit, depends on your facts. Model this with a US international-tax adviser before you incorporate, not after.
The treaty position
There is no comprehensive income-tax treaty between the United States and Bermuda. That absence matters: you cannot rely on treaty rates, treaty tie-breakers, or treaty-based reductions, and there is no treaty mechanism to relieve double taxation here.
Because Bermuda levies no corporate income tax, double taxation in the classic sense rarely arises; the practical effect is simply that your US tax is computed under domestic US rules with no treaty overlay. The two governments do exchange tax information under separate arrangements, so do not treat the structure as private.
US reporting obligations
US ownership of a foreign company brings several reporting duties that are separate from the tax itself, and the penalties for missing them are severe. A US person who owns or controls a foreign corporation generally files an annual information return on Form 5471; ownership of a foreign LLC or partnership has its own forms.
Foreign financial accounts are reported through the FBAR (FinCEN Form 114) and, where thresholds are met, on Form 8938 with your return. A US officer or director of a foreign company may also have signature-authority reporting. Confirm the current thresholds and the exact forms for your structure with a qualified preparer, because these change and the dollar triggers matter.
Bringing profits back to United States
A distribution, salary, or other payment from the entity is a US tax event reported on your return. There are no Bermudian exchange controls to stop the transfer and no local withholding to reduce it, so the only tax that bites is the US tax.
Where Subpart F or the global intangible income rules have already taxed earnings, careful tracking prevents the same profit being taxed twice when it is finally distributed; this is a documentation discipline your adviser should set up from day one.
Economic substance in Bermuda
Bermuda has economic-substance requirements for entities carrying on defined relevant activities, such as holding, financing, intellectual property, and certain service activities. Depending on what the company does, you may need to show that core income-generating activity, management, and an appropriate local presence sit in Bermuda, and you will file an annual economic-substance declaration.
A pure equity-holding company faces a lighter, reduced substance test than an active financing or intellectual-property company. Match your real operations to the substance category before you assume the structure is viable.
Common mistakes United States-based owners make
The errors that hurt are almost always about US rules, not Bermudian ones.
- Assuming zero local tax means zero tax. It does not. CFC rules can tax the company's profit on your US return whether or not you take a distribution.
- Skipping the information returns. Form 5471, FBAR, and Form 8938 carry steep penalties that are unrelated to whether any tax was owed.
- Treating substance as a formality. If the company carries on a relevant activity with no real presence, it can fail the economic-substance test and face penalties or strike-off.
- Leaving banking to the end. Account opening for a US-connected entity is slow and can derail the whole plan; start it alongside incorporation.
- Forgetting the company's own US footprint. US-source income or a US trade or business can create direct US tax for the company itself, separate from your personal position.
- Ignoring expatriation rules. If part of the plan involves giving up US citizenship or long-term residency, the US exit tax and related rules can apply to your interests, including this one.
Conclusion
For a US resident, a Bermuda company is a structuring tool for substantial holding, insurance, or fund activity, not a way to lower the tax on an ordinary business. Worldwide taxation and the CFC regime mean the island's zero rate rarely reaches you, while the cost and substance demands sit at the upper end of the offshore range.
The point to settle before anything else is how Subpart F and the global intangible income rules apply to your specific facts, confirmed with a US international-tax adviser. If those rules leave no real benefit, the structure is hard to justify; if they do, the path from the United States is straightforward to execute.
How Expanship Can Help You Incorporate in Bermuda
Expanship handles the formation and ongoing administration of a Bermuda entity for owners based in the United States, managing the registry filings, regulator consent, and local presence so the project runs by correspondence. Beyond setup, the firm supports the wider needs of a foreign-owned company, from economic-substance compliance to annual filings and banking introductions.
- Company incorporation and name reservation
- Registered agent and registered office services
- Economic-substance and tax registration support
- Ongoing annual compliance management
- Accounting and bookkeeping
- Banking introductions for the new entity
To discuss your structure and the next steps, contact Expanship Bermuda.
Frequently Asked Questions
Yes. The process runs through a local agent and is completed by correspondence, with documents certified or apostilled in your US state. You do not need to travel to the island to incorporate.
Yes. An exempted company or LLC can be wholly owned by US persons, with no requirement for a local shareholder or partner. The regulator reviews the beneficial owners as part of standard due diligence.
Almost certainly. The United States taxes worldwide income, and the controlled-foreign-company rules can tax the entity's profit on your US return even before any distribution. Bermuda's zero local tax does not shelter you from this.
It is the most demanding part of the project. Banks apply heavy due diligence to US-connected, non-resident-owned entities, so start the process alongside incorporation and prepare a clear source-of-funds account.
Incorporation is fast once due diligence and regulator consent are complete, often within days. Allow roughly two to six weeks end to end for the company, with banking typically taking longer and running on its own timeline.
A US owner of a foreign corporation generally files Form 5471, reports foreign accounts on the FBAR and, where thresholds are met, on Form 8938. Confirm the current forms and thresholds for your structure with a US tax adviser, as the 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.
