Bermuda has concluded negotiations with Portugal over a tax information exchange agreement (TIEA), the Finance Ministry announced last night.

The agreement will provide for a full exchange of information on criminal and civil tax matters between the two jurisdictions.

Finance Minister Paula Cox said that among the benefits for Bermuda is the provision that Bermuda will be removed from Portugal's list of tax havens upon the TIEA entering into force.

This provision exempts Bermuda from punitive measures that apply to listed countries, such as the application of controlled foreign company (CFC) rules, expense deduction rules, special tax rules, and capital gains realised by non-resident entities, amongst others.

Minister Cox said: "The conclusion of negotiations with Portugal is a milestone for our two countries. Bermuda and Portugal have long-standing cultural and business ties dating back to the 1840s when Portuguese settlers first started immigrating to Bermuda.

"Today, Portuguese represent over nine percent of our population. This is the second instance of Bermuda negotiating directly with Portugal, following the signing of the Bermuda Azorean Accord in 1991 which expanded the rights of Azoreans to work in Bermuda.

"Bermuda's proposed treaty with Portugal will further strengthen and deepen our relationship with Portugal and provide immense opportunities for further business links between Bermuda and Portugal."

Bradley Kading, president of the Association of Business Insurers and Reinsurers (ABIR), said Bermuda global reinsurers have an estimated 23 percent of the broker-placed reinsurance placed for Portugal's domestic insurers.

David Ezekiel, chairman of the Association of Bermuda International Companies (ABIC) said: "We believe this is a significant agreement and that the removal of Bermuda from Portugal's list of tax havens will lead to direct benefits for Bermuda registered entities and individuals."

Minister Cox intends to sign with Portugal immediately following the conclusion of Portugal's internal approval process.

Bermuda has 18 signed TIEAs and negotiations have also been concluded with, among others, Canada, Japan, Spain and Belgium, with these agreements expected to be signed in early 2010.