The Bermuda Registrar of Companies (RoC) has advised that the portal provided for the submission of Economic Substance Declarations (ESDs) will undergo an update on Monday, November 30, 2020.
In an industry notice issued on 26 November, the RoC listed the impacts of the portal update as follows:
Deletion of Existing Incomplete ESD Filings
Any incomplete Economic Substance Declaration on the portal WILL be deleted at the time of the update on Monday, November 30, 2020. Any entity with an incomplete ESD filing on the portal should complete the filing prior to the update.
Allowance for Entities with Zero Gross Income to File a Declaration
An entity that carries on a relevant activity is required to file a declaration, whether or not it earns any gross income in respect of the relevant activity, as set out in Section 6 of the Revised Guidance Notes dated 18 September 2020 (see note below). The updated portal will feature a question on this issue in the General section. A 'Yes' or 'No' response will be required. A response of 'No' will allow the entity to file a 'Nil' declaration.
Collection of Additional Data
In order to achieve greater clarity and facilitate the analysis process, additional data collection fields have been added to the 'Managed and Directed' and the 'Financial Information & Employees' sections of the declaration.
Self-Reporting of Non-Compliance with Economic Substance Requirements (ESR)
An entity that responds 'No' to the question of compliance with ESR in the 'Declaration' section will be required to check the relevant box to indicate each requirement with which it failed to comply.
Filing Control - Financial Period
It will be mandatory for the entity to enter its year-end date before being allowed to proceed to file and/or save its Economic Substance Declaration.
Revision to Economic Substance Guidance Notes re: gross revenue earned
Section 6 of the Guidance Notes in relation to the Economic Substance Act 2018 (the "Act") was revised in September 2020 to clarify that entities will be deemed to be carrying on a relevant activity (and therefore would be in scope of Act) whether or not any gross revenue is earned from that relevant activity. However, the revised Guidance Notes reaffirmed that an entity that earns no gross revenue from the activity in a relevant financial period will not be required to satisfy the economic substance requirements in respect of that activity for that period. Any such entity that earns no gross revenue is therefore not required to complete a full Economic Substance Declaration in respect of that activity for that period, although such entities with a filing date on or after 30 November 2020 are now required to file a 'Nil' declaration.
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.