Work permit term limits and uninformed tax and legislative threats from overseas are some of the biggest challenges facing Bermuda's international business sector and the jurisdiction as a whole, warned a business leader.

David Ezekiel, chairman of the Association of Bermuda International Companies (ABIC)and president and managing director of International Advisory Services Ltd., who was speaking at the latest Hamilton Rotary Club meeting held yesterday, told the audience that the issue of keeping the services of those who had contributed most to the country's economy and business community but did not have citizenship should be a top priority.

Mr.Ezekiel also commended Government and other organisations such as the Bermuda International Business Association (BIBA)and the Association of Bermuda Insurers and Reinsurers (ABIR)on the work they had done to help educate politicians and reformers key to the future of Bermuda's tax status and the retention of overseas companies operating here.

But he cautioned there was no room for complacency and added that the Island needed to focus on what it does best in order to enjoy continued success in the years and decades to come.

He labelled term limits as "ill-conceived" and a "major barrier" for businesses and disruptive from a personal perspective and that individuals should be assessed on the value they bring to the economy rather than how long they have been here, with many permit holders being replaced by new ones who may require extra training and incur additional costs for their companies to relocate to the country

."It has got a whole lot of operational and political issues relating to it," he said. "But hopefully we will find some way of stopping this revolving door.

"The main external problem, he added, was coping with rhetoric.

"Quite often we have heard politicians blame the entire recession on the offshore industry, but many times they have been talking to a largely uninformed public and need a reason to deflect attention from themselves,"

Mr. Ezekiel said.

"We have to counter a lot of this uninformed rhetoric about what offshore jurisdictions do and funnily enough it seems to come from places where all the trouble with Madoff, Stanford and Northern Rock occurred."

Mr. Ezekiel pointed to the Island's insurance industry alone paying out billions of dollars in claims following Hurricanes Katrina, Rita and Wilma more than any other jurisdiction and had acted as a backstop to insurers in the USand Europe as evidence of the role it played in the global scheme of things, but added there were also several internal issues which needed to be resolved.

"We have made tremendous strides in terms of how international business operates here," he said.

"But some challenges still remain I think one of the major challenges we have is to protect Bermuda and Bermudians and so we don't have the ability for non-Bermudians to gain status other than by connection.

"We have to find a way to bind job creators to this Island because a lot of people who started up businesses here and have kids who are 10 or 11-years-old have suddenly realised they need to leave.

"When the job creators start to leave, that is when the warning bells start to ring and we have got to find some way to retain these 20 to 25 people who could in the long-term secure hundreds or even thousands of jobs for Bermudians in the years ahead and for them to be able to call Bermuda home."

Mr. Ezekiel started by giving an overview of Bermuda's international business sector and its importance to the country's economy, explaining the difference between tax exempt companies and those exempt from being 60 percent Bermudian on the condition they did not trade on the Island, as well as a breakdown of 18,000 international firms (500 of which have a physical presence) versus 4,000 local companies, the former of which are Bermuda's main economic drivers.

"Bermuda became the domicile of choice many years ago in the insurance industry and that hasn't changed we are still the market leader in terms of number of companies and new formations," he said.

"Despite the economic downturn, we are seeing a pick-up again and I see no reason why we won't retain our leadership position in years to come."

Mr. Ezekiel said the Island had a number of benefits including an efficient regulatory regime boasting better speed to market for new insurers than its rivals.

"The tax advantages which some companies came here for disappeared in 1986, but those companies are still here because of the regulatory environment, infrastructure, educated workforce and the accounting, legal and IT firms who can service them," he said.

He said the Island also had a respected judicial system and was politically stable compared to what was happening in places such as the UK, in addition to a strong set of financial ratings and a good quality of life to offer its residents.

"Relative to other jurisdictions, this is a wonderfully safe and secure Island," he said.

"That is not to say we can get sanguine about it, but really I will defy anyone to pick a place that even comes close to what we have here

"We have got all the ingredients to keep us as successful as we have been over the past few decades."

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