BERMUDA Law and Practice Contributed by: Bourn Collier and Sharon A. Beesley, BeesMont Law Limited
1.2.4 Tax There is no tax arising on the issuance, acquisition, purchase, subscription or sale of digital assets in Ber- muda. There are no taxes on income, profits, dividends or capital gains or other taxes in Bermuda other than a 15% corporate income tax (CIT) payable if a Bermuda company is part of a multinational group with annual revenue of EUR750 million (from 2025), for which dou- ble taxation and set-off rules shall apply. Digital asset licensees which are structured as exempted companies can apply to the Minister of Finance for an undertaking that the company will be exempt from any future imposition of tax on profits, income or any capital gain or appreciation until 31 March 2035 (although this does not apply to CIT, if payable). In addition, any conversion of the local currency (Ber- muda dollars) via Bermudian banks will incur a 1% Foreign Currency Purchase Tax charge. In the event that aspects of a transaction involving digital assets are concluded in a written agreement which is to be registered in Bermuda (such as a charge or security agreement), stamp duty will be chargeable at rates specified in legislation. 1.2.5 Insolvency Pooling of Client Assets In early 2025, a pooling regime for digital asset busi- ness was introduced with the Digital Asset Business (Custody of Client Assets) Rules 2025. The Rules apply to all DABA licensees providing custodial wal- let services under Section 10 (2)(d) of DABA. On the occurrence of a pooling event – being the default of the licensed undertaking, the coming into force of a BMA direction in respect of client assets, or the default of an intermediary holding client assets – cli- ent assets across all client accounts are pooled and made available to meet client claims pari passu, with a separate sub-pool mechanism applying where the pooling event is the default of an intermediary. The pooling and trust regime under the Rules operates in addition to the existing obligations on DABA licensees
assets although there have been transactions where security was effected and registered by Bermuda companies pursuant to the statutory regime of grant- ing a charge over moveable assets pursuant to the Companies Act 1981 (which involved some issues of technical complexity regarding the control of private keys). 1.2.2 Access to Banking The BMA requires disclosure of all banking relation- ships DABA Licensees have and reviews these to assess for risk and reputability. Subject to this DABA and DAIA Licensees are able to work with a large range of banking and payment institutions globally, however they must manage such relationships through vendor due diligence and other applicable policies as part of their licence conditions, now reinforced by the BMA’s Operational Resilience and Outsourcing Code 2025 which applies to critical third-party relationships including banking and pay- ment service providers. There are no restrictions on DABA and DAIA Licen- sees obtaining general banking and payment services in Bermuda. Although appetite amongst Bermuda’s operating four authorised banks for digital asset busi- ness varies, certain of them have increased their ser- vice offering and appetite for DABA and DAIA Licen- sees recently. In practice, most DABA and DAIA Licensees maintain banking and payment relationships with institutions outside Bermuda, reflecting the global nature of digital asset business and correspondent banking patterns. 1.2.3 ESG/Sustainable Finance While the Bermuda Monetary Authority has been proactive in giving greater consideration to ESG and Sustainable Finance concerns across its areas of supervision and did expand the risk management framework in the Insurance Code of Conduct in 2022 (to incorporate considerations of material risks from ESG aspects in particular climate risks), which may impact firms which participate in the Insurance Regu- latory Sandbox, there are currently no disclosure or reporting requirements applicable to firms which are licensed under DABA or authorised under DAIA.
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