Law of Bermuda Information
The law of Bermuda is based on the common law legal system of England and Wales.
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Sources of Law
- The law of England and Wales as it stood in 1620 - of all kinds: common law, equity and statute - became the law of Bermuda at that time, and it remains so to the extent that other sources have not changed it.
- The Parliament of Bermuda enacts statutes on all domestic legal issues.
- Bermuda has a body of delegated legislation.
- Precedents established in Bermuda courts are binding on equal and lower courts.
- Precedents established in the courts of England and Wales have force in Bermuda to the extent that they are "on-point". This is an issue because Bermuda statute law and England and Wales statute law are usually different. A particular example of this has arisen since the implementation of the Woolf reforms in England and Wales in 1998, since they do not apply in Bermuda. The effect has been that case law on Bermuda court procedure, except local case law, has stagnated since that date.
Immigration
The main categories of resident in Bermuda are:
- Bermudian. Bermudian status can be obtained:
- By birth. Although it is possible to be born Bermudian, simply being born in Bermuda does not automatically confer this status. You must be born in Bermuda to a parent who holds Bermudian status, in order to be considered Bermudian by birth.
- Through a lengthy period of residence. People who have attained Bermudian status in this way are colloquially, and somewhat disparagingly, known as "status Bermudians", although the title is something of a misnomer since someone who is Bermudian by birth can be said to have Bermudian status.
- Spouse of a Bermudian. This status confers many of the rights of a Bermudian (free access to the job market, for example) but does not itself bring citizenship rights. People with this status eventually become Bermudian in their own right. However the status is lost if the marriage itself breaks down.
- Permanent resident. People with a "permanent residence certificate" are entitled to reside in Bermuda, but they are not citizens and their children do not become Bermudian (unless those children become status Bermudians in their own right).
- Guest worker. Persons with this status have no citizenship rights, and require a work permit in order to work, and to reside on the island (although the spouses and minor children of guest workers are entitled to reside in Bermuda, also).
- Property owner. A person who owns property under a licence (see Property Law, below) does not thereby acquire any citizenship rights. However such people are entitled to reside in Bermuda.
Company Law
- Two types of company can be incorporated in Bermuda:
- a local company, which is owned 60% or more by Bermudians; and
- an exempt company, which is owned chiefly by non-Bermudians
- As a matter of broad principle (to which there are many exceptions):
- only a local company may trade in Bermuda (there is a similar restriction on foreign companies, and on non-Bermudian sole traders and partnerships);
- only local companies are expected to contribute to the local economy through taxation.
- exempt companies may have a physical presence in, and employ staff in, Bermuda.
Property Law
- All conveyancing in Bermuda is unregistered. Bermuda has no equivalent of the 1925 property law legislation in England.
- Bermuda has no capital gains taxes, but there is ad valorem Stamp Duty on sales and gifts of real estate.
- Generally, Bermuda real estate cannot be vested in a corporation, except:
- in a trust company;
- in the management company of a condominium; or
- in other cases with the permission of the minister, strictly limited by policy.
- Bermuda real estate cannot be vested in a non-Bermudian, nor in a trust which may benefit a non-Bermudian, unless a licence is obtained on behalf of the non-Bermudian. The fee for the licence is a substantial percentage of the market value of the real estate.
- With some limited exceptions, only real estate in the hands of non-Bermudians is available for sale to non-Bermudians.
- It is common for Bermuda real estate to be owned by trusts.
Trust Law
- See also Trust law
- It is illegal to act as a trustee, as a business, without a licence. Generally, licences are only granted to corporations, so almost all professional trustees are trust companies. A professional person may act as a trustee if (and only if) he or she has a connection with a licensed trust company, and delegates certain functions to that trust company.
- Unpaid private trustees are fairly common, although usually only for domestic trusts (see below).
- The residence of a trust follows the residence of its trustees. A trust is therefore only Bermuda resident if a majority of its trustees are Bermuda resident.
- Generally, Bermuda tax law is generous in its treatment of non-Bermuda assets, which include foreign currencies even where held at Bermuda banks. There is usually no tax charge in Bermuda (for example, to Stamp Duty) on settling non-Bermuda assets into trusts, nor on the income those assets produce, nor on their sale, nor on their distribution to beneficiaries. Like the other offshore financial centers ("tax havens") this has led to the use of Bermuda trusts by settlors and beneficiaries from higher-tax jurisdictions.
- By contrast, Bermuda assets are generally charged to ad valorem Stamp Duty upon being settled into trust.
- Bermuda (by statute) recognises the concept of non-charitable purpose trusts.
- Domestic trusts (that is, trusts settled by Bermudians, with Bermudian beneficiaries) are very common, due to the stamp duty legislation, which imposes a tax of up to 15% of the value of Bermuda-assets in an estate on death, but does not tax an interest in a discretionary trust.
Litigation and the Bermuda Court System
- Together with a number of tribunals, Bermuda has a three-tier court system:
- Magistrates Court, with a mainly criminal jurisdiction;
- Supreme Court, with a civil and criminal jurisdiction, covers the roles of the English Crown Court, County Court and High Court.
- Court of Appeal has equivalent status to the English Court of Appeal. There is a further right of appeal to the Privy Council in London.
Resources and External Links
As might be expected in a small jurisdiction, the best available resources are provided by a number of individuals and law firms:
- An exception is Bermuda Laws, an official site containing all Bermuda legislation, including delegated legislation.
- Bermuda Law Reports is a subscription service containing searchable copies of local cases. This is an ongoing project, working backwards through the years, and therefore currently only contains cases reported since the mid-1980s.
- Skiffy's Legal Links, prepared by and named after Karen Skiffington, a Bermuda law librarian, contains a useful section on online Bermuda law.
- Conyers Dill & Pearman, and Mello Jones & Martin (http://www.mjm.bm/publications), the three largest law firms in Bermuda, each has a "publications" section on their website. Although intended primarily for marketing purposes, there are many articles on substantive legal issues. These are generally written in a style that is suitable for a client, rather than a qualified lawyer.
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