Bermuda trying to keep leading offshore role

Bermuda is increasing its efforts to maintain its position as a leading offshore business centre after several major companies announced plans to move to Europe, the mid-Atlantic British enclave’s finance minister has announced.

Finance Minister Paula Cox said the territory is pursuing legislative reform to fend off rivals such as Switzerland, who are bent on luring away Bermuda-based corporate offices.

“Many jurisdictions with similar qualities to Bermuda are vying for existing and new business in these uncertain times,” observed Cox. “While there are perceptions that other jurisdictions offer preferential tax treatment, the Bermuda model is still one that continues to maintain its position in the upper echelon of the world's top reinsurance centres.”

The 66,000-person territory relies on international business as a crucial source of foreign exchange along with reinsurance and tourism.

Cox’s remarks came shortly after Tyco Electronics, which makes electronic components and telecommunications systems, announced its board had approved a proposed change of incorporation to Switzerland.

Switzerland has a stable political, economic and regulatory environment, as well as long-established commercial relationships and tax treaties with other countries, observed CEO Tom Lynch. Tyco intends to make the switch as soon as possible, pending shareholder approval.

Several large north American-owned companies based in Bermuda — a low-tax haven where thousands of international companies have set up shop since the 1980s — have announced they planned to switch their place of incorporation to Europe.

Engineering and construction company Foster Wheeler has said it planned to reincorporate in Switzerland — which has a tax treaty with the US — for tax and other reasons. In addition, healthcare products company Covidien has announced it was relocating to Ireland.