BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale, Hannah Tildesley and Marah Smith, Walkers
the fair value of the shares. The proper approach to the resolution of the various matters in dispute is that the onus is on each party to adduce evidence establishing on the balance of probabilities the cor - rectness of any contention on which they rely. • While it will be guided by the evidence of the experts, the court is not bound to adopt the evidence of either of them, and may select some parts but not others, and may come to its own view. • The court found that it was bound to apply a minority discount to the fair value, unless it could be shown there was some feature to the case ren - dering it “special”, such that a discount should not be applied. • Based on the minority discounts applied in the Cayman Islands, the discount should normally be a small one; the Judge applied a discount of 3.7%. • The Judge found that interest is payable on any fair value uplift and applied Bermuda’s statutory rate, which is currently 3.5%, from the date the merger closed. Appraisal actions are typically long, complex and expensive. The cost of discovery is particularly bur - densome for the company because generally the company holds all of the material relevant to valuation. In addition, both parties must engage costly valuation experts and, in some cases, industry experts. Corporate Income Tax On 1 January 2025, the Corporate Income Tax Act, 2023 (the “CIT Act”) became fully operative in Bermu - da. The CIT Act was introduced as part of the imple - mentation of a corporate tax regime within the scope of the OECD’s and G20’s international tax agreement on Pillar Two of the Base Erosion and Profit Shifting (BEPS) project known as the Global Anti-Base Erosion Model Rules (Pillar Two) (GloBE). Under the CIT Act, Bermuda corporate income tax is chargeable in respect of fiscal years beginning on or after 1 January 2025 for Bermuda entities that are part of multinational enterprise (MNE) groups with EUR750 million or more in annual revenues in at least two of the four fiscal years immediately preceding the fiscal year in question (“Bermuda Constituent Entity Group”). Where corporate income tax is chargeable to
a Bermuda Constituent Entity Group, the amount of corporate income tax chargeable for a fiscal year shall be 15% of the net taxable income of the Bermuda Constituent Entity Group minus tax credits applicable to the Bermuda Constituent Entity Group under Part 4 of the CIT Act, or as prescribed. In May 2025, the Bermuda government introduced updated administrative regulations that refined filing procedures, the allocation of creditable foreign taxes, and compliance processes under the CIT regime. These updated administrative provisions were later integrated into the Corporate Income Tax Amend - ment (No 2) Act 2025, enacted on 11 December 2025, which added further technical and administra - tive refinements. On 11 December 2025, Bermuda also enacted the Tax Credits Act 2025, establishing a structured framework of qualified refundable tax credits designed to align with OECD Pillar Two. These credits include: • substance‑based tax credits; • community development tax credits; and • utilities infrastructure tax credits. The Tax Credits Act formalises these credits and clari - fies eligibility, calculation mechanics and administra - tive requirements, operating as part of the broader CIT framework to incentivise employment, local spending and infrastructure investment in Bermuda. 3.2 Significant Changes to Takeover Law There have not been any significant changes to take - over law in the past 12 months, and no significant changes to the legislation are anticipated in the com - ing 12 months. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies The majority of transactions in Bermuda are negoti - ated between parties and do not involve a buyer build - ing a stake in the target prior to the transaction. However, in a hostile takeover scenario it is common for the bidder to have acquired a minority stake in the company in order to pursue litigation against the
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