Bermuda Incorporations

The distinction between a local and exempted Bermuda Company

Bermuda Company law distinguishes between companies the majority of shares are owned by Bermudians ("local companies") and those owned by non-Bermudians ("exempted companies").  They are called "exempted companies" because they are exempt from the requirement that 60% of their shares be owned by Bermudians.

Only local companies are permitted to carry on and compete for business which is in Bermuda. Exempted companies may be resident in Bermuda and carry on business from Bermuda in connection with transactions and activities which are external to Bermuda. In practice, the activities of most international companies are unlikely to infringe this requirement.

In certain cases the Act imposes different requirements on local companies and exempted companies. Further, in prescribed circumstances an exempted company may obtain a license to carry on its business activities within Bermuda.