Bermuda Company Formation for Crypto, Fintech & High-Risk Businesses

Why Choose Bermuda for Company Formation?

Bermuda is the offshore jurisdiction operators choose when regulatory credibility matters more than cost. It pairs a zero-rate corporate tax model for most companies with a purpose-built digital-asset licensing regime and a clean FATF record. The standard vehicle, the exempted company, can be formed in 3 to 7 business days and owned entirely by non-residents.^[1][3]

A Purpose-Built Digital-Asset Regime

Bermuda was among the first jurisdictions to legislate specifically for digital-asset businesses. The Digital Asset Business Act 2018, supervised by the Bermuda Monetary Authority, sets three licence classes and a separate token-issuance regime.^[5][6] Bermuda's Digital Asset Business Act framework carries more institutional weight than the VASP registrations offered by its Caribbean peers, and that difference shows up directly in banking and counterparty conversations. For a licensed business, the registered structure is the asset, not the cost saving.

A Clean FATF Record

Bermuda has never appeared on the FATF grey list. Its Caribbean Financial Action Task Force mutual evaluation rated it compliant or largely compliant on 39 of the 40 FATF Recommendations,^[13] which the Government of Bermuda reported as the highest technical-compliance result of the more than 75 mutual evaluation reports published by January 2020.^[27] Unlike the British Virgin Islands, which the FATF added to its grey list in June 2025,^[19] Bermuda is on neither the FATF list nor the EU list of high-risk third countries, on which the BVI has also stood since 29 January 2026; that EU listing makes enhanced due diligence mandatory for EU obliged entities dealing with BVI-connected clients, while the FATF itself calls for a risk-based approach rather than blanket enhanced due diligence.^[31]

A Tax Model With One Narrow Exception

Bermuda levies no corporate income tax, no capital gains tax, no VAT, and no withholding taxes for the vast majority of companies.^[9] The single exception arrived in 2025: groups with consolidated revenue of EUR 750 million or more now pay a 15% corporate income tax under the Corporate Income Tax Act 2023.^[8] Unlike the Cayman Islands, which has enacted no domestic top-up tax, Bermuda chose to align with the OECD global minimum tax directly.

Built for Non-Resident Ownership

An exempted company is, by definition, exempt from the 60% Bermudian-ownership rule that binds local companies, so non-residents can own 100% of the shares.^[3] Formation is fully remote: there is no requirement to visit Bermuda. The practical requirement is a local registered office and one Bermuda-resident officer or representative, which a licensed corporate service provider supplies.

Entity Types Under Bermuda Law

Bermuda's principal corporate statute is the Companies Act 1981, supplemented by the Limited Liability Company Act 2016 and the Segregated Accounts Companies Act 2000. For internationally owned crypto, fintech, and high-risk businesses, the standard vehicle is the exempted company. The limited liability company and segregated accounts company serve specific structuring needs rather than the general case.^[1][3][4]

In practice, almost every internationally owned Bermuda company is formed as an exempted company, because it is the vehicle the BMA expects for a digital-asset or financial-services applicant. The limited liability company suits joint ventures and fund structures that want contractual flexibility through an LLC agreement. The segregated accounts company is used where assets and liabilities must be ring-fenced into separate cells, common in insurance and fund platforms.

Formation Process

A Bermuda exempted company is formed in 3 to 7 business days once the beneficial-owner documentation is complete: the memorandum goes to the Registrar of Companies with an application for the Registrar’s consent to incorporation, and the beneficial-ownership information is filed at registration.^[22][25] The Bermuda Monetary Authority stopped accepting beneficial-ownership applications on 28 October 2025, ahead of the central register’s move to the Registrar on 3 November 2025, and the Registrar’s own prior-approval power was repealed from 30 December 2025.^[26][25] Formation is remote. The realistic constraint is assembling certified identity documents for every beneficial owner the corporate service provider must verify.

What You Need to Prepare

What the statutory steps do not capture is the time to gather a fully certified identity pack for each beneficial owner. That preparation, not the filing, is what determines whether formation lands in one week or three.

Requirements

Bermuda's formation requirements are middle of the road for an offshore jurisdiction: lighter than a full onshore regime, with the Registrar’s consent needed for each incorporation. The two make-or-break elements are complete beneficial-ownership information at registration and the mandatory local registered office and resident officer.^[3]

Registered Office and Resident Representative

Every exempted company needs a physical registered office and a company secretary. At least one director, the secretary or a resident representative must be ordinarily resident in Bermuda; the secretary need not be resident if another qualifying person meets that requirement.^[22] The provider quotes the office and relevant officer services. Nominee directors are prohibited by Companies Act section 2(1A), effective 10 December 2025; that prohibition is separate from whether a corporate director is permitted.

For a Class M or Class F digital-asset licensee, this requirement escalates: the BMA expects a Bermuda-resident senior representative and a genuine head office from which the business is directed and managed.

Beneficial Ownership Disclosure

Bermuda maintains a central beneficial-ownership register. Under the Beneficial Ownership Act 2025, in force since 3 November 2025, the register moved from the BMA to the Registrar of Companies and the disclosure threshold sits at 25%; since 14 September 2026 changes must be entered in the company’s register and filed with the Registrar within 30 days (previously 14 days).^[25] The register is not public: the Registrar may disclose information to listed authorities and to anti-money-laundering obliged entities for due diligence. The Beneficial Ownership Regulations 2026 took effect on 25 September 2026. They define legitimate-interest access for specified anti-money-laundering, terrorist-financing or proliferation-financing purposes, including qualifying media, research and proposed-transaction cases. Access is application-based, limited to prescribed information and subject to exemptions; this is not an open public register.^[32]

The final regulations replace the earlier draft access framework. A company may seek an exemption from legitimate-interest disclosure on specified grounds, including serious risk to a beneficial owner; confidentiality is not automatic.^[32] Bearer shares are prohibited; nominee shareholders remain subject to disclosure of the underlying controller.

Costs and Pricing

Bermuda is a high-cost offshore jurisdiction by design. The minimum annual government fee for an exempted company is US$2,095, roughly two to four times the equivalent fee in the Cayman Islands or the British Virgin Islands, and the government fee scales upward with the company’s assessable capital; it is paid on incorporation and again each January.^[22][17] The real cost driver, though, is professional fees, not the government fee.

The common mistake is budgeting against the headline US$2,095 government fee alone: a US$500 annual corporate regulatory fee is payable with it.^[23] Every exempted company needs a Bermuda registered office and at least one ordinarily resident director, secretary, or resident representative, so their cost is as unavoidable as the fee, although each provider prices it. The Bermuda government also levies a 7% corporate services tax on the revenue a service provider earns from exempted companies, which raises the effective invoice the client sees.^[9] Build the budget from the official fees below plus the provider’s quote, then add the partner’s fee for the work.

Government Fees

Total Cost Summary

Figures are date-stamped as of September 2026. Banking and any DABA licensing are additional and are covered in their own sections.

Taxation

Bermuda operates a no-corporate-income-tax model for the vast majority of companies, funded instead by payroll tax, customs duty, and government fees. The one exception, in force since 1 January 2025, is a 15% corporate income tax on Bermuda entities in multinational groups with consolidated revenue of EUR 750 million or more, under the Corporate Income Tax Act 2023.^[8][9] There is no VAT, no capital gains tax, and no withholding tax.^[21]

The 15% headline is real but narrow. The real constraint for a typical applicant is payroll tax on any Bermuda-based staff, not corporate tax.

Tax Assurance Certificate

A Bermuda exempted company can apply for an assurance certificate under the Exempted Undertakings Tax Protection Act 1966. The certificate provides that if Bermuda later enacts any tax on income, profits, capital gains, or estates, that tax will not apply to the company until at least 31 March 2035.^[16] The assurance does not exempt an in-scope multinational group from the 2025 corporate income tax: the certificate predates and does not override the Corporate Income Tax Act 2023. Treat it as protection against future general taxes, not as a shield against the global minimum tax.

CRS and CARF Reporting

Bermuda is a participating jurisdiction under the OECD Common Reporting Standard (CRS) and has committed to the Crypto-Asset Reporting Framework (CARF): the OECD Global Forum lists it among the 27 jurisdictions undertaking first exchanges by 2028 (list last updated 14 September 2026),^[14] and the Corporate Income Tax Agency says Bermuda’s reporting obligations and timeline will be published in due course.^[30]

For a crypto business, client and transaction data will become reportable once that domestic timetable is set. Build CARF data capture into systems now rather than retrofitting it.

Pillar Two and the 2025 Corporate Income Tax

Bermuda has not paired the Corporate Income Tax Act 2023 with an income inclusion rule or an undertaxed profits rule. A group approaching the EUR 750 million threshold should model its exposure before incorporating, because the 15% rate changes the after-tax economics that make Bermuda attractive.

Banking

Banking is the hard part. Bermuda has four domestic banks (the members of the Bermuda Deposit Insurance Corporation scheme), and local deposit-takers have shown little appetite for newly incorporated, non-resident-owned crypto and fintech companies, citing correspondent-banking and de-risking pressure.^[15] An FATF-clean record helps, but it does not by itself open a local account for an unlicensed crypto business.

In practice, an unlicensed Bermuda crypto company banks through alternatives rather than a local high-street account. The common stack is a payment account from an electronic money institution authorised in a European jurisdiction such as Lithuania, which issues a named account and IBAN to an offshore-incorporated entity but offers no deposit-protection scheme. A specialist crypto-friendly banking partner in a third jurisdiction that onboards regulated digital-asset businesses is the other route, and it usually requires the BMA licence first.

Bank documentation runs deep: certificate of incorporation, Memorandum and bye-laws, registers of directors and members, registered-office proof, certified beneficial-owner identity, and address for every 25%-plus holder, and source-of-funds evidence. Realistic onboarding runs from several weeks to several months.

Jagelski & Partners' banking partner network includes 90+ institutions across multiple jurisdictions, and pre-qualifies a Bermuda company against the institutions most likely to onboard its profile before any application is filed. For a formation client, banking is the critical next step after incorporation, not an afterthought. See the banking service for how onboarding is sequenced.

Annual Compliance

Every Bermuda exempted company carries ongoing obligations regardless of activity, and non-compliance leads to penalties and, ultimately, strike-off from the register.^[2][7] The core annual events are the January government declaration, beneficial-ownership maintenance, payroll-tax filings for any Bermuda staff, and any applicable economic substance declaration.

Annual Declaration and Government Fee

Each exempted company files a statutory declaration of its principal business and assessable capital with the Registrar in January, accompanied by the annual government fee and the US$500 corporate regulatory fee.^[22][23] The filing is mandatory even for a dormant company. The late penalty is US$300. An exempted company does not file its financial statements with the Registrar, but it must keep accounting records.

Accounting and Audit

A Bermuda exempted company must appoint an auditor, but the requirement can be waived if all shareholders and all directors agree.^[3] An annual general meeting is required by default but may be waived by resolution of the members, in line with the audit-waiver mechanics. Records can be kept anywhere in the world. For a licensed digital-asset business the BMA imposes its own reporting, which is heavier than the general corporate position and sits outside the scope of this formation guide.

Beneficial Ownership Updates

Changes to beneficial ownership must be filed with the Registrar within 30 days under the Beneficial Ownership Act 2025, as amended with effect from 14 September 2026 (previously 14 days).^[25] The Registrar deferred enforcement of the filing obligation to 31 August 2026. The requirement for the Registrar’s prior approval before a person could become a beneficial owner was repealed with effect from 30 December 2025,^[12] which simplifies onboarding of new investors.

Tax Filing

There is no corporate income tax return for a standalone company outside the EUR 750 million group threshold. Payroll tax is filed quarterly within 15 days of each quarter-end for companies with Bermuda staff, electronically where the payroll is US$200,000 or more.^[10] In-scope multinational groups file a corporate income tax return through their Bermuda constituent entity.

Penalties and Strike-Off

The Registrar strikes off companies that fail to meet filing and fee obligations under section 261(5) of the Companies Act 1981, with notice published in the Official Gazette, after which a struck company stands dissolved.^[2] Reinstatement is possible but costly and slow. Directors should treat the January declaration and the economic substance deadline as hard dates, because the path from non-filing to strike-off is administrative and unforgiving.

Economic Substance

Bermuda's Economic Substance Act 2018 and Economic Substance Regulations 2018, effective 1 January 2019 require entities carrying on a relevant activity to demonstrate genuine substance in Bermuda.^[11] The declaration duty follows the relevant-activity and residence analysis; do not confuse it with the separate January company declaration.^[33]

Relevant Activities

The regime applies to nine relevant activities: banking, insurance, fund management, financing and leasing, headquarters, shipping, distribution and service centre, intellectual property, and holding-entity business.^[11] Investment fund business is expressly outside the regime. Whether a digital-asset business is caught depends on the underlying activity: a crypto-financing or fund-management model can be a relevant activity, whereas pure proprietary trading sits outside the listed categories unless it falls within an existing head.

The Substance Test

A company carrying on a relevant activity must be directed and managed in Bermuda, conduct its core income-generating activities in Bermuda, and have adequate employees, expenditure, and physical premises on the island.^[11] Core income-generating activities can be outsourced, but only to a provider that performs them in Bermuda. A pure-equity holding company faces a reduced test: it need only comply with its filing obligations and maintain adequate premises and people for passive holding.

Reporting Deadlines and Penalties

The economic substance declaration is filed with the Corporate Income Tax Agency, through the Registrar’s portal, within six months of the financial year-end.^[11] Penalties escalate across successive notices, from US$7,500 to US$50,000 for a first failure, up to US$250,000 for repeated non-compliance, and can end in a court order restricting the business or strike-off. High-risk intellectual-property business is presumed non-compliant unless the company rebuts the presumption with detailed evidence.

Exemptions

An entity carrying on a relevant activity can claim non-resident status only with sufficient evidence of foreign tax residence. Residence in a jurisdiction on EU Annex I does not qualify for this exclusion.^[33]

Qualifying local entities fall under reduced corporate-governance requirements, rather than a blanket exemption. Banking and insurance are relevant activities and require their own substance assessment; a sector licence should not be treated as an automatic exemption.^[33]

Licensing Pathways from a Bermuda Company

Forming the exempted company is the first step; the structure should be designed around the licensing target, because capital, governance, and substance requirements differ by licence. For digital-asset businesses, the relevant authorisation is a Digital Asset Business Act licence from the Bermuda Monetary Authority, with a separate regime for token issuance.^[5][6]

A separate Digital Asset Issuance authorisation under the Digital Asset Issuance Act 2020 applies to businesses raising capital through token offerings, distinct from the DABA service licence.^[20] A Bermuda licence is respected globally but is jurisdictionally bounded.

A Bermuda entity confers no EU passporting rights, and MiCA contains no third-country equivalence regime for digital-asset firms. MiCA Article 61 permits a third-country firm to serve EU clients only where the client initiates the service at its own exclusive initiative. ESMA's guidelines, published 26 February 2025 and applicable from 27 April 2025, read this restrictively: they list targeted advertising into the EU, EU country-code domains, sponsorship of EU events, paid EU-based influencers, and websites in an EU language not customary in international finance among the signs that a firm is likely to be soliciting EU clients, judged on all the facts; a firm that solicits EU clients cannot rely on the exemption.^[29] For full detail on what constitutes solicitation, see Reverse Solicitation Under MiCA →

Advantages and Limitations

Bermuda rewards businesses that need credibility and can absorb cost, and penalises those optimising purely for low annual fees. The advantages cluster around reputation, regulation, and tax; the limitations around cost, banking, and the absence of EU market access. Every limitation below carries a mitigation.

• ✓ Clean FATF record. Never grey-listed; the highest technical-compliance result of any mutual evaluation published by January 2020, which eases counterparty due diligence.
• ✓ Purpose-built digital-asset regime. The Digital Asset Business Act gives licensees a recognised regulatory status that Caribbean VASP registrations do not match.
• ✓ No corporate tax for most companies. Zero corporate income tax, VAT, capital gains, and withholding tax outside the EUR 750 million group threshold.
• ✓ 100% non-resident ownership. The exempted company is exempt from the 60% Bermudian-ownership rule, with fully remote formation.
• ✓ Institutional credibility. Bermuda is a top-three global insurance and reinsurance market and the world's largest captive domicile, which signals regulatory maturity to banks and partners.
• × High cost relative to peers. Mitigation: choose Bermuda only where the licensing or reputational benefit justifies the premium; use a BVI or Bahamas structure for pure holding needs.
• × Difficult banking. Mitigation: secure the DABA licence first and pre-qualify against suitable banking partners before applying, rather than relying on a local high-street account.
• × No EU passporting. Mitigation: operators targeting EU clients can obtain a separate CASP authorisation in an EU member state for full passporting, or, for services provided at the client’s own exclusive initiative only, may fall within the narrow reverse solicitation exemption under MiCA Article 61.
• × Economic substance obligations. Mitigation: run the substance analysis against the business model before incorporating, and use the reduced test where the entity is pure-equity holding.
• × 2025 corporate income tax for large groups. Mitigation: model Pillar Two exposure before incorporating; the rate is irrelevant to standalone operators below the EUR 750 million threshold.

How Bermuda Compares

Among premium offshore jurisdictions, Bermuda is the credibility option, the Cayman Islands the funds option, the British Virgin Islands the low-cost holding option, and the Bahamas the cost-sensitive crypto option under its DARE Act. The table below positions Bermuda against the three jurisdictions a founder most often weighs against it.

Compare every formation jurisdiction side by side →

The key difference is: regulatory weight against cost. Bermuda and Cayman are the premium pair, but they specialise differently: Cayman for funds, Bermuda for digital-asset and insurance licensing. The British Virgin Islands undercuts both on price and speed, but its June 2025 FATF grey-listing^[19] and its EU high-risk listing from 29 January 2026 make enhanced due diligence mandatory for EU obliged entities dealing with BVI-connected clients,^[31] where the Cayman Islands, off the grey list since 2023,^[18] carries no such friction.

The Bahamas is the closest cost-sensitive analogue with its own crypto framework, but it lacks Bermuda's insurance pedigree and the institutional recognition that the Digital Asset Business Act carries. For a business whose value rests on a credible licence, that recognition is the deciding factor.

When Bermuda Is the Right Choice

Choose Bermuda if you need a digital-asset or fintech licence with international standing, if banking and counterparty credibility outweigh annual cost, if you operate in insurance or reinsurance, or if a clean FATF record is decision-critical. Consider alternatives if you only need a low-cost holding vehicle (the BVI or Bahamas), if your priority is a funds platform (the Cayman Islands), or if you need EU market access (an EU member-state CASP authorisation, not any offshore structure).

Not sure which column is you? Ask Emma. She compares these jurisdictions in seconds, in your language.

Frequently Asked Questions

References