Bermuda

Bermuda is an island group located in the Atlantic ocean some 570 nautical miles due east of Cape Hatteras, North Carolina. The largest island in the group is Great Bermuda Island, which is 14 miles in length. Bermuda's population is slightly larger than 60,000.

Both the Bermuda Dollar and the U.S. Dollar, which are trade at par with each other, are regularly accepted as currency. Banks will set up accounts in either currency.

The Bermuda Stock Exchange (BSX) was established in 1971, and is owned by the three commercial banks in Bermuda: the Bank of Butterfield, Ltd., the Bank of Bermuda, Ltd., and Bermuda Commercial Bank, Ltd. There is a very sophisticated banking community on Bermuda, and Bermuda can rightfully claim to be one of the world's leading banking centers. Bermuda's banks are very conservative: loans typically constitute less than 15% of total deposits, creating a very low loan portfolio exposure. Following the downfall of Lloyd's of London, Bermuda probably has risen to be the world's insurance and reinsurance capital.

Bermuda offers a wealth of sophisticated corporate management services, local management consultants, and management services companies, as well as trust companies and brokerage firms. There are also a number of law firms in Bermuda which cater to the needs of international clients.

Bermuda is a good offshore location for U.S. clients located along the Atlantic coast, as there are daily flights from most major cities to Bermuda. Bermuda is probably the offshore location "of choice" for most eastern U.S. citizens. For the same reason, however, Bermuda is not as readily accessible to clients from the western U.S. as, say, the Cayman Islands or Belize. Also, Bermuda can be relatively cold (compared to the Caribbean) during the winter months, especially for divers. Moreover, because Bermuda sits alone in the Atlantic, there is no nearby location which can easily be visited from Bermuda, unlike the Caribbean where if you grow tired of one island you simply visit another.

TAX WARNING FOR U.S. CITIZENS

U.S. citizens are taxed on their taxable income from wherever it is derived, anywhere in the world. U.S. citizens are also taxed on investments indirectly made through foreign trusts and foreign corporations, including offshore trusts and IBCs. Thus, the fact that an offshore jurisdiction may have low or no taxes does not mean that if a U.S. citizen does business there that he or she will enjoy only low or no taxes on the personal income made. There are simply NO personal income tax advantages, at all, for U.S. citizens to use offshore structures, and anyone who tells you differently is probably telling you a falsehood. Any discussion we make of an offshore jurisdiction's tax laws should be construed only according to the foregoing warning.

BEWARE OF OFFSHORE SERVICE PROVIDERS: There are some offshore service providers who will make wild claims about saving you personal income taxes, so as to convince you to set up an offshore structure. Most of these people don't know the first thing about U.S. tax law, and their representations to you will not help you, at all, if you are caught with an unreported trust, corporation, or bank account. All they really want is your money, and even if you commit tax evasion they are not subject to U.S. law, and so couldn't care less. See Hiding Money Offshore