Bermuda, renowned as a global business hub, offers a robust legal and regulatory framework that attracts companies from around the world.

The mechanism enabling this transition is known as continuation, as codified in Bermuda’s Companies Act 1981.

A continuation allows companies to transfer their place of domicile to Bermuda while maintaining their legal personality.

Also referred to as redomiciliation, a company does not escape its existing obligations or liabilities but can benefit from the advantages of the new jurisdiction once continued.

Any foreign-incorporated company, subject to certain exceptions, may apply to the Registrar of Companies for continuation as an exempted company in Bermuda.

The foreign jurisdiction must be an appointed jurisdiction as defined under section 2(10) of the Act. The registrar maintains a list of appointed jurisdictions, which generally includes Bermuda’s main trading partners and other well-established and regulated jurisdictions.

If a company is incorporated in a jurisdiction that is not on the appointed list, it must apply to the Minister of Finance for approval to continue into Bermuda.

This requires the submission of an application letter along with a legal opinion from foreign counsel confirming that the company will remain liable for its existing obligations and that all company property will continue to be held under its ownership.

The legal framework for continuance in Bermuda is set out in section 132C of the Act. Given the legal complexities involved, companies typically engage Bermudian-based legal counsel and a Bermudian-based corporate service provider to facilitate communication with the RoC and ensure a smooth transition.

Before applying for continuance, a company must confirm that its constitutional documents permit re-domiciliation. The company must also ensure that it is solvent and in good standing with the regulatory authorities in its current jurisdiction.

It is common for the continuation to require the approval of the continuing company’s board of directors, and in many cases also the shareholders.

Some of the items required under Bermuda law to effect a continuation are:

• Memorandum of continuation ― specifies the company’s details of incorporation, authorised share capital, the objects of the company and the company’s powers

• Certificate of incorporation ― must be certified by the relevant authority

• Name reservation ― the company’s name must be reserved with the RoC before continuation

• Bylaws ― these are the company’s governing documents and must be compliant with Bermuda law

• Ministry of Finance consent ― applicable if the company proposes to engage in a restricted business activity

• Certificate of good standing ― issued by the foreign jurisdiction

• Opinion of foreign counsel ― counsel from the foreign jurisdiction must provide an opinion to authorise the continuation

• Organisational chart ― showing the structure of the company up to its ultimate beneficial owners

• Financial statements ― prepared for a period ending within 12 months of the proposed date of continuance

• Director and officer register ― lists the names and addresses of all the directors and officers

• Declaration of solvency ― must be signed by at least one director confirming the company is solvent and capable of meeting its liabilities

The registrar has the power to request additional documents depending on the nature of the business.

If an insurance company intends to continue into Bermuda, it must submit a comprehensive application to the Bermuda Monetary Authority in addition to the application filed with the RoC.

The required application materials vary, based on the insurer's intended classification, which includes captive insurers (Classes 1, 2, 3, A, and B), commercial insurers (Classes 3A, 3B, 4, C, D, and E), as well as special-purpose and collateralised insurers.

The scope of the BMA application can be extensive, depending on the insurer's classification and regulatory requirements.

Once the application has been submitted, and the applicable fees have been paid to the RoC, the registrar will review the submission to ensure that all requirements have been met. If approved, the company will receive a certificate of continuance.

Concurrently, the company must apply for deregistration in its original jurisdiction. Some foreign jurisdictions may require a Bermuda legal opinion detailing the consequences of continuation under Bermuda law.

Upon successful deregistration, the original jurisdiction will typically issue a certificate of discontinuance, formally confirming that the company is no longer subject to the legal framework of its discontinued jurisdiction.

For companies considering continuation, Bermuda’s legal framework provides an opportunity for re-domiciliation in one of the world’s most respected financial jurisdictions.

• Milaun Perott is an associate and a member of the insurance team in the corporate department of Appleby. A copy of this column can be obtained on the Appleby website at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer