As you will be aware, Bermuda enacted economic substance legislation requiring every company, LLC and limited partnership that has a separate legal personality which is carrying on a “relevant activity” (each, a “relevant entity”) to file an economic substance declaration form (the Declaration Form) with the Bermuda Registrar of Companies (the Registrar). The Declaration Form must include information demonstrating that either the relevant entity: (a) has satisfied the economic substance requirements applicable to that entity, or (b) is resident for tax purposes in another jurisdiction (which is not on the European Union’s list of non-cooperative jurisdictions for tax purposes). The Registrar will determine whether or not the applicable substance requirements are met, based on the information provided by the relevant entity.
Every relevant entity is required to file its Declaration Form no later than six months after the last day of the first financial year of that entity which commenced on or after 1 January 2019. For any such entity with a financial year which ended on 31 December 2019 and which carried on a relevant activity1 during this financial period, the filing deadline in respect of such period is 30 June 20202.
It is important also to note that the Declaration Form can only be filed via the ESD Portal and we recognise that a number of clients will need advice in connection with the filing process. Conyers has been closely involved with the implementation of Bermuda’s economic substance legislation as well as the ESD Portal, and we will be available to assist. Once we receive notice from the Registrar that the ESD Portal is available to be accessed, we will circulate the link to the ESD Portal, together with initial instructions. A dedicated Conyers team will be available to assist with your filing(s).
In the meantime, should you have any queries in connection with the filing process or require legal advice with respect to the economic substance requirements generally, please contact one of our lawyers listed below or your usual Conyers lawyer.
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Economic Substance – Preparing for Filing the First Declarations
1 “Relevant activity” means carrying on as a business any one or more of the following: banking, insurance, fund management, financing and leasing, headquarters, shipping, distribution and service centres, intellectual property and holding entity (as each term is defined in the economic substance legislation). The Registrar will consider that a “relevant activity” is being carried on as a business where the entity earns any gross income in respect of such activity during the relevant financial period.
2 Any relevant entity which fails to meet its filing deadline may be subject to sanctions imposed by the Registrar.