On the eve of new international requirements for companies to show economic substance in jurisdictions where they have a registered presence, Bermuda’s leading international insurers and reinsurers, have expressed continued support for the Bermuda Government’s commitment to facilitate tax transparency and compliance with global standards.

The Government has enacted the Economic Substance Act 2018, which is intended to meet the commitment made by Bermuda to address certain concerns raised by the European Union’s Code of Conduct Group in relation to the need for relevant businesses to demonstrate economic substance in Bermuda.

Kevin O’Donnell, chief executive officer of RenaissanceRe Holdings Ltd, and current chairman of the Association of Bermuda Insurers and Reinsurers, said: “This state-of-the-art legislative package further aligns Bermuda’s statutory and regulatory framework with both Bermuda’s prevailing, world-class business practices, and with emerging global standards.

“As the global centre of risk transfer, we believe Bermuda’s international business sector already meets or exceeds worldwide requirements. We applaud the Government’s legislative reform package which further enhances that framework, and its commitment to ensuring that clients and markets worldwide will continue to benefit from Bermuda’s critical financial capacity and leading risk management expertise.”

In a statement, Abir said its members are proud of their investment — economic substance — in Bermuda’s economy. Data reported in 2017 showed Abir members’ aggregate direct economic impact to the Bermuda economy was $842.6 million, including travel, business, charity giving, construction expenses and compensation paid to Bermudian-based employees. Abir also said similar economic contributions from companies in “relevant activities” specified in the ESA has potential to greatly enhance Bermuda’s economy.

Starting January 1 for new companies and July 1 for existing companies, substance requirements will affect entities carrying out the following activities: banking, insurance, fund management, financing & leasing, headquarters, shipping, intellectual property, distribution & service centres, and related holding companies.

Abir said the island “is a world-respected platform for global business that welcomes top-quality corporate brands”, and the Government and Abir’s members are committed to tax transparency, compliance and the implementation of ESA requirements.

Industries and companies whose regulatory regimes already require substance in the jurisdiction, including insurance, are expected to satisfy the new EU requirements through existing arrangements.

John Huff, president of Abir, said: “Abir looks forward to continuing to work with the Bermuda Monetary Authority and the Bermuda Government on the Economic Substance Act regulatory guidance to ensure efficient and fair implementation of the standards and to avoid any duplicative regulation while supporting the Bermuda economy.

“Abir’s members are good corporate citizens in Bermuda and in the worldwide markets they serve, and are prepared to continue to address the world’s critical risk needs.”