The Bermuda Economic Substance Amendment Act 2021 received Royal Assent on 30 June 2021. This Act amends Bermuda's Economic Substance Act, 2018 (the "ES Act"), to bring limited partnerships without separate legal personality and overseas partnerships into scope.
Partnerships that are now in scope which are carrying out a specified relevant activity will have six months to comply with the economic substance requirements set out in the ES Act and associated regulations (meaning they must be fully compliant by 30 December 2021).
As a reminder, the following are relevant activities for the purposes of the ES Act:
- banking
- insurance
- fund management
- financing and leasing
- headquarters
- shipping
- distribution and service centre
- intellectual property
- holding entity
Whether they are partnerships or companies, investment funds that are not carrying on a relevant activity are not in scope of Bermuda's economic substance laws.
As a result of the changes, the Registrar of Companies has issued updated Guidance Notes dated 1 July 2021.
Walkers Professional Services is available to assist entities to file economic substance declarations where required under the ES Act. In addition, Walkers' dedicated Regulatory & Risk Advisory Group can advise on the applicable relevant activity classifications and can assist entities to determine how to meet any applicable economic substance requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
