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Incorporation of Bermuda Companies
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8. Resident Bermuda Directors/Resident
Representative
The Companies Act of Bermuda requires that there be a minimum of
two representatives of the company who are ordinarily resident in
Bermuda. This requirement may be satisfied by the company having
either of the following combinations of people resident in Bermuda.
i) have a minimum of two directors, other than alternate directors,
ordinarily resident in Bermuda; or
ii) have a secretary who is ordinarily resident in Bermuda and a
director, other than an alternate director, who is ordinarily resident
in Bermuda; or
iii) have a secretary who is ordinarily resident in Bermuda and
a resident representative; or
iv) in the case of a company the shares of which are listed on an
appointed stock exchange, have a resident representative.
If the client company desires one or more Bermuda resident directors
to be provided by RCSL to serve on its Board of Directors, RCSL
requires that the client company have an annual audit. Otherwise,
RCSL can provide a resident representative.
A resident representative is entitled to attend, to be heard at,
and to receive minutes of all proceedings of all meetings of the
directors and members of the company and act as agent for service
of process in Bermuda.
The Resident Representative also has certain obligations to report
material breaches by a company of provisions of the Companies Act
or regulations made thereunder or any issue or Transfer of Shares
of the company effected in contravention of any statute.
9. Nominee Services
Bermuda law permits the shares of a proposed exempted company to
be held by a nominee. The nominee company available to clients is
International Finance Ltd., a company owned by the partners of the
law firm. This nominee facility will preclude a member of the public
from determining who is the beneficial owner of the client company.
If nominee services are required, the parties enter into a Nominee
Agreement that sets out the terms and conditions underlying the
nominee relationship. Also, the beneficial owner obtains from the
nominee a Declaration of Trust together with a share transfer form
(executed in blank).
If nominee services are required the minimum share capital must
be paid up in full.
The annual fee payable for nominee services is US$500.
10. Government Fees
The company will pay upon incorporation and annually thereafter
a minimum Government fee based upon its assessable capital. Assessable
capital is the total of the company's authorized share capital and
the amount, if any, standing to the credit of the company's share
premium account.
11. Payroll Tax
Exempted companies that have a physical presence in Bermuda are
liable to pay a Payroll Tax charged in respect of each employee
on account of employment services performed wholly or mainly in
Bermuda. The Payroll Tax is payable once per calendar quarter on
or before the fifteenth day of the month immediately following each
quarter. The tax is calculated on actual remuneration up to a maximum
of $56,250 per calendar quarter.
The Payroll Tax rate is 12.75 per cent. The employer may deduct
from the employee's remuneration each pay-day 4.75 per cent of the
employee's actual remuneration up to a maximum remuneration of $56,250.
12. Restrictions
Bermuda exempted companies are prohibited from carrying on business
in Bermuda or holding real property in Bermuda without Government
approval. They may only carry on business from Bermuda, which means
carrying on business internationally and includes carrying on business
with other Bermuda exempted entities.
13. Company Formation Questionnaire
In order to commence the incorporation of a Bermuda exempted company,
the client must complete the Company Formation Questionnaire, a
copy of which is attached as Annexure 'C'. This document must be
sent back to the law firm so that steps can be taken to commence
the incorporation proves. Wire Transfer instructions are attached
to the Company Formation Questionnaire
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