Apr 2026
The Bermuda Economic Substance Regime (comprising the recently amended Economic Substance Act 2018 (the “Act”) and the Economic Substance Regulations 2018 (the “Regulations”) now requires Bermuda-based entities that are carrying on a “relevant activity” in a relevant financial period, and entities claiming “non-resident entity” status under the Act, to file an Economic Substance Declaration Form (a “Declaration Form”) with the Bermuda Corporate Income Tax Agency (the “Agency”). Such Declaration Forms must be filed annually, within six months of the last day of the entity’s financial year. Bermuda-based entities which are in-scope of the Act and have a financial year-end of 31 December 2025 are reminded that they are required to file their Declaration Forms by 30 June 2026.
Following the Economic Substance Amendment Act 2026 and the Economic Substance Amendment Regulations 2026 (together, the “Amendments”) coming into force on 31 March 2026, responsibility for the administration, monitoring and enforcement of the Economic Substance Regime has been transferred from the Registrar of Companies (the “ROC”) to the Agency. The rationale for this transfer is the recognition that the administration of the international tax compliance function is more appropriately aligned with the responsibilities of the Agency. The Amendments to the Economic Substance Regime are not expected to impact operational processes, including how entities proceed with filing their Declaration Forms.
With the transfer of responsibility, the Agency now has the power to carry out inspections, require information and documents, and impose penalties for breaches of the Economic Substance Regime. The Amendments introduce a default fine for failing, without a reasonable excuse: (i) to file Declaration Forms by the prescribed date; (ii) to comply with notices; or (iii) to permit access to premises. The default fine shall be of an amount the Agency considers appropriate for each day in which the default continues, with such daily fine not to be less than $100 nor more than $500.
All existing obligations with respect to compliance with the Economic Substance Regime remain unchanged. As noted above, the process for filing Declaration Forms also remains unchanged at this time, with Declaration Forms required to be submitted via the ROC’s e-Portal (www.registrarofcompanies.gov.bm) until further notice.
However, it is worth noting that the transitional provisions of the Amendments do authorise and entitle the ROC to enforce any notice, fine or penalty they issued before 31 March 2026. This means the ROC can continue to enforce any economic substance penalty or compliance notice they previously issued and which has not yet been paid or concluded. This transitional provision does not extend to historic conduct in respect of which no notice to comply or enforcement notice has been issued by the ROC prior to 31 March. Any such matters will now fall within the purview of the Agency if it decides to issue any new notices to comply or penalties post 31 March.
Bermuda-based entities with a financial year-end of 31 December, should begin to consider their position with respect to the Economic Substance Regime, the activities they carried out during the 2025 financial year and confirm or seek advice as to whether they are required to file a Declaration Form. Entities which are required to file, may do so at this time, provided any necessary financial statements have been prepared.
How Can We Help?
Conyers has been closely involved with the implementation of Bermuda’s economic substance legislation. Our lawyers have advised and assisted our clients in assessing the impact of the economic substance requirements and in completing and filing their Declaration Forms. In so doing, we have acquired an unrivalled understanding of Bermuda’s economic substance requirements of various types of entities, across all relevant activities.
Please reach out to your usual Conyers contact or our economic substance team at [email protected], for help with:
- determining the status of an entity for economic substance purposes
- advising on the compliance of an entity with the economic substance requirements
- clarifying the reporting obligations of an entity
- completing and filing the Declaration Form
- compliance reviews
If you would like Conyers to assist with any of the above in connection with your 2025 Economic Substance filings or compliance reviews, please contact us as soon as possible.