There are myriad reasons to move to Bermuda - an archipelago of 181 islands totalling 21 square miles and surrounded by pink sand beaches and palm trees, the island is rich in culture, local and international cuisines and natural beauty, with a sub-tropical climate and temperatures that rarely drop below 55°F or exceed 90°F. The island offers one of the highest standards of living in the world, one of the highest per capita incomes in the world, a top-tier healthcare system and access to excellent schools.
If island living is not your cup of tea, there are a multitude of benefits to simply setting up a Bermuda-based company or family office. Bermuda has no corporate, income, withholding or capital gains taxes, and no limit on the accumulation of profit. The British island territory is home to a host of world-class financial advisors, bankers, accountants, auditors, actuaries, underwriters, brokers, lawyers, IT specialists, trust practitioners and more.
Bermuda has a well-earned reputation as a place of financial security – Standard & Poor (S&P) has consistently given the island an A+ rating – and for its political, economic, and social environment stability and consistency.
But what makes it stand out from the many offshore jurisdictions vying for family office attention?
Edward Allanby is the co-founder, president and CEO of Leman Management Limited, a bespoke wealth administration and advisory service that has been in operation since 2001. He has a background in accounting and finance with extensive experience in the structuring and execution of private market investments.
When we speak, it’s the day after a hurricane, a natural event islanders are very much used to. “The power was knocked out for a few hours, which can be rather frustrating, but people know the drill,” says Edward. “We are getting better each year. More and more people are investing in generators which have helped to improve communications, both before and during a hurricane. Luckily, our buildings are made of cement block, so our physical infrastructure is quite secure.” From a business point of view, Edward explains that, “Bermuda’s world-class technological infrastructure has allowed businesses to remain operational during hurricanes with most companies having back-up facilities offshore.”
There must be something in the water in Bermuda because Edward only intended to stay on the island for two years while he helped to set up a single family office. Two decades later, the pull of the island is as strong as ever. We asked Edward the circumstances surrounding his move to Bermuda and why he and his business there are still going strong.
“I was working for a company in Geneva and one of the major stakeholders in the business mentioned that he needed help with the structure and management of his wealth,” explains Edward. “I provided him with a business plan for setting up a family office in Bermuda, the jurisdiction I believed to be the logical choice for such an endeavour given the advantages on offer. The individual wanted to enjoy the benefits that a family office had to offer but had little interest in the responsibility of managing it – he wanted the freedom to focus on new investment opportunities. So the plan was for me to temporarily relocate to the island in order to set up the family office and then manage it for a trial period. I was up for the challenge, telling myself that because Bermuda was a small island in the middle of the Atlantic Ocean, that I could do it for maybe two years.”
“After about 18 months, it was clear to me that the venture was an extremely successful one with the potential for major growth. Many of the contacts I had made throughout my career were like-minded individuals to the stakeholder and I knew that they would benefit from the same type of services that I was providing to him. And so Leman Management Limited was established.”
I became the spider in the web and prided myself on being knowledgeable on the ins and outs of operating offshore.
Edward’s background as an experienced finance director and chartered accountant may have provided him with the necessary knowledge to do his job, but it was the intangible soft skills, like critical thinking and problem solving, that helped grow his Bermuda-based business into the success that it is today.
“I was working with lawyers on the mainland and it quickly became clear to me that while they successfully completed the legal documentation for the initial stages of setting up an offshore family office, there was no one within the new venture who had the ability to understand the legal or regulatory requirements of the offshore structure moving forward – no one understood the big picture. This lack of knowledge and understanding was the common thread. I became the spider in the web and prided myself on being both knowledgeable on the ins and outs of operating offshore and on being able to determine what information was important and why.”
“As a result, we've developed a niche for wealthy families and high-net-worth and ultra-high-net-worth individuals who want to invest in private markets. These deals are often problematic, complex and high risk, and to make them happen you need to be able to act quickly to design and implement effective, robust and bespoke solutions. I could provide this set of skills to the investors and their family members – I was able to interpret what they wanted and I knew how to achieve it.”
“Besides being a tax-neutral jurisdiction, Bermuda is also a British Overseas Territory and therefore, operates under English law,” says Edward. “This provides those who do business in Bermuda or who have their wealth managed from Bermuda, with a high degree of stability and confidence. There are also tons of resources here. All of the world’s preeminent accounting firms and offshore law firms have offices here, which gives us the ability to work with top-tier professionals.”
The proposed Family Office Act will make setting up a family office here even simpler.
With a robust regulatory system led by the Bermuda Monetary Authority, Bermuda is a well-established and well-respected financial centre, as well as a prominent location for family offices. Over the past two decades, Edward has found that the Bermuda government’s policies are consistently geared toward welcoming family offices to the island: “A recent initiative under development is 'The Family Office Act'. This proposed legislation will make setting up a family office here even simpler, allowing a streamlined and user-friendly one-time application process for multiple licenses and exemptions related to investment management, creating investment funds, fund administration, captive insurance management, acting as a trustee or corporate service provider etc. The proposed legislation will also allow for immediate approval of work permits for family members, professionals and trusted advisors.”
But if you are still toying with the idea of relocating to Bermuda… Then the island offers programmes that not only attract new investors but which also provide clear options to those who have already made significant contributions to the island.
“While Bermuda does not offer a naturalised passport option, there is an investment programme that will allow extended residency,” says Edward. “If you invest $2.5 million in either residential or commercial real estate, Bermuda government bonds, a registered charity, an equity investment in an existing local business or in a new business then you will receive residency rights for five years. After five years, you are then on the path to obtaining permanent residence.
Edward’s message is clear: “Bermuda is very much an investor-friendly jurisdiction.”