Bermuda Economic Substance and Investment Funds Amendment Legislation Tabled

Bermuda has tabled amendment legislation in the House of Assembly in the form of the Economic Substance Amendment (No 2) Act 2019 (the “Economic Substance Amendment Act”) and the Investment Funds Amendment (No 2) Act 2019 (the “IFA Amendment Act”). The amendments follow extensive consultation by the Bermuda Government with the OECD and the EU Code of Conduct Group and are in furtherance of the implementation by Bermuda of legislation that embraces a global initiative to combat base erosion and profit shifting (“BEPs”).

Executive Summary

  • The Economic Substance Amendment Act introduces changes to the definitions of the relevant activities of “holding entity” and “financing and leasing”, as well as to the definition relating to local entities.
  • The IFA Amendment Act implements changes to the Investment Funds Act, 2006 and related rules to provide enhanced supervisory and regulatory requirements relating to registered or authorised investment funds that operate segregated accounts and “closed-ended investment funds”; to provide for designation and classification requirements for certain “overseas investment funds” and “Professional Closed Funds”; and to provide for the enhancement of fit and proper requirements.
  • Assuming approval by Parliament, the amendments are expected to come into force on or around 20 December 2019 and will be followed by further anticipated

 

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