Investment Business in Bermuda – BMA
What is BMA and what does it do?
The Bermuda Monetary Authority (BMA) is the independent regulatory body responsible for overseeing Bermuda’s financial services sector. The BMA, supervises, regulates, inspects, and ensures the compliance of financial institutions operating within the jurisdiction. Its mission is to promote financial stability, safeguard investor protection, and maintain Bermuda’s status as a leading global financial hub.
The BMA has developed a comprehensive, risk-based financial regulatory framework for overseeing investment businesses. This ensures that investment businesses operating in Bermuda adhere to international standards and maintain high levels of compliance and transparency.
Why establish an Investment Business in Bermuda?
An established Investment Business in Bermuda benefits from:
- Blue-Chip Reputation: Bermuda is globally respected for its strong compliance and transparency. The European Commission granted Bermuda Solvency II, a distinction shared with only one other non-EU jurisdiction. Solvency II refers to the prudential regime for insurance and reinsurance undertakings in the EU and aims to ensure the adequate protection of policyholders and beneficiaries and promote comparability, transparency and competitiveness.
- Stability & Safety: Bermuda has long been a politically and economically stable destination offering a secure environment for investment businesses. With a business-friendly government, Bermuda fosters investor confidence and provides a supportive foundation for business growth.
- Favourable tax policies: Bermuda is known for its low-tax regime. While changes to corporate income tax rates are expected in 2025, the jurisdiction remains an attractive and tax-efficient destination for businesses due to its tax-neutral environment offering businesses significant advances.
- Quality & Expertise: With a talented pool of highly skilled professionals, Bermuda delivers exceptional quality and expertise that not only meets the demands of the international marketplace but also preserves the collaborative spirit of the jurisdiction.
- Innovation & adaptability: Bermuda’s dynamic business culture is built on a foundation of innovation and adaptability, ensuring it remains relevant and competitive in a rapidly changing and demanding global market.
License Categories & Investment Activities
To conduct an investment business in or from Bermuda entities must apply for a license from the BMA, unless they qualify for registration or are designated as non-registrable. There are two main types of licenses available:
- A “standard” license:
under which a person may carry on one or more investment activities (subject to any limitations imposed by the Authority).
- A “test” licence:
under which a person may carry on one or more investment activities for a defined period can be extended based on compliance and performance.
The BMA offers several types of license categories, each tailored to different types of investment activities. These categories are:
| License Category | Investment Activities |
|---|---|
| Dealing in Investments | Buying, selling, subscribing for, or underwriting investments either as principal or agent. |
| Arranging Deals in Investments | Making or offering, or agreeing to make arrangements with a view to: i) another person buying, selling, subscribing for or underwriting a particular investment, being arrangements which bring about or would bring about the transaction in question; or ii) a person who participates in the arrangements buying, selling, subscribing for or underwriting investments. |
| Managing Investments | Managing or offering to manage assets belonging to another person, which include investments. |
| Investment Advice | Giving or offering, to give to clients or potential clients, advice on purchasing, selling, subscribing for or underwriting an investment, or exercising any right conferred by an investment to acquire, dispose of, underwrite or convert an investment. |
| Safeguarding and Administrating Investments | The safeguarding and administration (or arrangement for safeguarding and administration) of assets belonging to another party, where: i) the assets include investments as specified in paragraphs 1 to 8 of Part 1 of the First Schedule to the IBA; or ii) the arrangements for safeguarding and administering these assets are structured in a way that the assets may include investments, and the arrangements have been presented or promoted as specifically designed to safeguard and manage such investments. |
| Investment Promotion | Promoting investments to members of the public, including: i) Advertising or agreeing to advertise material or information which promotes an investment; ii) Issuing or agreeing to issue a prospectus, application for or proposal form in relation to an investment; and iii) Distributing, circulating or agreeing to distribute, circulate or make available, material relating to an investment. |
Regulatory Capital Requirements
Investment businesses operating in Bermuda must meet specific regulatory capital requirements as set out by the BMA. These requirements vary depending on the type and scale of investment activities undertaken. Firms are required to maintain adequate capital during operations.
Applications Fees
An application for a license must be submitted in the format prescribed by BMA, along with the applicable fees. The fees for examining the application vary depending on the type of investment services applied for.
Annual Fees
License renewal fees to BMA also depend on the type of investment license.
Licensing Timeframe
Based on our experience, the BMA licensing process takes on average two to three months. However, we advise our clients to budget for up to four to six months to accommodate the BMA’s workload and to allow time for any additional requirements that may arise during the process.
Establishing an Investment Business with SALVUS
The SALVUS Investment Firms Licensing team employs a project management approach to help our clients select the most suitable investment services tailored to each client’s unique business model, needs, and vision. Throughout the entire licensing process, we serve as a link between our client and the BMA, handling the collection and submission of all required information and documentation to the BMA.
Our priority is to ensure that you understand the licensing process, without the stress of managing it. We are dedicated to facilitating a smooth licensing experience, tackling any challenges that may arise with professionalism and attention to detail.
Contact us at info@salvusfunds.com to discuss your Investment Business in Bermuda or any other licensing need. We understand that each business faces its own unique challenges, and we are committed to helping you overcome them in pursuit of your specific goals. We appreciate the uniqueness of each business, and we tailor our services to ensure your success in a way that aligns with your individual vision and needs. We look forward to working together and being of value.
