Bermuda is a British Overseas Territory in the Atlantic, one of the world's oldest centers with zero income tax and the largest reinsurance hub. It is a common law jurisdiction with predictable law: final appeals go to the Privy Council in London. Personal income here remains untaxed, and since January 2025 a separate corporate tax has been introduced—it applies only to large multinational groups.
Context
The islands lie approximately one thousand kilometers east of the North Carolina coast; they are not part of the Caribbean, though often confused as such. With a population of around 64,000, Bermuda maintains a disproportionately large financial sector: it is one of the world's centers for reinsurance and captive insurance, where a significant portion of the global catastrophic risk market is concentrated. The high revenues of this sector and the absence of income tax have for decades attracted executives of insurance and investment companies, followed by private family capital.
Tax Regime
At the individual level, Bermuda does not levy tax on income, capital gains, inheritance, or wealth. The budget is funded differently: payroll tax is paid by employers on a progressive scale (with the right to withhold part from the employee's salary), customs duties apply to almost all imports, an annual land tax on real estate is in effect, and stamp duty applies to transactions. For a private resident without local business, the direct burden on personal capital is close to zero, and the real cost of residence is determined by the high cost of living.
Corporate Tax from 2025
The historic formula of "complete zero" at the corporate level has changed. From January 1, 2025, Bermuda introduced a corporate income tax at a rate of 15% for Bermudian companies within multinational groups (MNE) with annual revenue of €750 million or more. This is a response to Pillar Two and GloBE rules of the OECD: the island decided to collect the tax locally and retain it in the local budget instead of allowing top-up in other jurisdictions. Bermuda did not introduce the income inclusion rule and undertaxed profits rule, so the regime is simpler than full Pillar Two. The new tax does not apply to private residents and their personal capital: the 15% rate is addressed only to large corporate groups.
How to Obtain Residence
The main instrument for investors is the Economic Investment Residential Certificate (EIRC). It requires a qualified investment of at least 2.5 million Bermudian dollars (the currency is in hard parity with the US dollar) and grants resident status from the date of issuance. Under the policy revision of June 2024, a successful applicant immediately receives a Residential Certificate, without the previous five-year interim certificate. The program has been operating since 2021; by 2026 it had attracted over $600 million, and the average investment per applicant approached $7.5 million—in practice, investments are significantly above the formal threshold.
The investment can be structured in different ways: purchase of residential or commercial real estate; contribution to the Sinking Fund or Bermuda Trust Fund; donation to a registered local charity; investment in an existing Bermudian business or launch of a new one; or a minister-approved project for the benefit of the islands. Since June 2024, Bermuda government bonds have been excluded from the list of qualifying investments. The investment must be maintained at a level of no less than $2.5 million for at least five years.
The EIRC holder is required to spend at least 90 days on the islands in each calendar year for five years after receiving the certificate. Basic requirements are standard: age 18 or older, good health, no criminal record. The application processing fee is $2,625.
Pitfalls
The cost of living in Bermuda is among the highest in the world: food, rent, and healthcare are expensive because almost everything is imported and subject to duty. Foreigners are only allowed to purchase real estate in the upper price segment—with high annual rental value (ARV)—and pay an increased licensing fee upon purchase. Land is scarce, the market is narrow, liquidity is limited. Against this backdrop, Bermuda is often compared with the Cayman Islands and Channel Islands, where conditions regarding real estate and cost of living differ.
Regulation and Transparency
Despite zero personal rates, Bermuda has long been integrated into international transparency: it participates in automatic exchange under the CRS standard, maintains a beneficial ownership register, and applies the economic substance regime for companies. The island was removed from the EU list of non-cooperative jurisdictions back in 2022 and is not on the FATF "grey list." Therefore, EIRC should reasonably be considered in conjunction with an actual change of tax residency: zero tax on the islands by itself does not cancel a person's obligations where they continue to be considered a resident.
Who Is This Suitable For
The jurisdiction works for those who can independently finance relocation and investment, value an English-speaking common law environment, and are prepared for a high cost of living in exchange for zero tax on personal income. Most often these are executives in the insurance and financial sector and investors who need a stable, reputationally clean base—often in conjunction with a family office. When choosing among "zero" havens, it is reasonable to weigh Bermuda against Monaco and the Cayman Islands in terms of climate, logistics, and market depth.
This material is for informational and analytical purposes and does not replace individual legal or tax advice.