Taxes and Tax Schemes in Bermuda | What You Need to Know in 2025

Bermuda, a British Overseas Territory renowned for its pristine beaches and sophisticated financial services sector, operates one of the world's most attractive tax regimes with no income tax. Located in the North Atlantic Ocean, Bermuda combines a high standard of living with tax efficiency, making it particularly appealing for international professionals and businesses.

Bermuda's economy, driven by insurance, reinsurance, and financial services, has maintained its position as a premier offshore financial center. The country's tax system focuses on indirect taxation while maintaining zero direct taxation on income or capital gains. Recent developments have centered on enhancing transparency and compliance with international standards while preserving Bermuda's tax-neutral status.

The expat community in Bermuda is substantial, with many professionals drawn to its sophisticated financial sector, high quality of life, and tax-efficient environment. The tax system, characterized by its absence of income tax, offers unique advantages that make it particularly attractive for international residents.

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Bermudian Income Tax

Bermuda stands out globally for having no income tax system. Residents and non-residents alike enjoy:

• No personal income tax
• No corporate income tax
• No capital gains tax
• No withholding tax

Instead of income tax, Bermuda relies on other forms of taxation, primarily payroll tax (paid by employers) and customs duties.

If you want to have a better understanding of the tax system in Bermuda, you can check the Taxation section of the Bermuda page.

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Bermudian Tax on Overseas Income

Bermuda's treatment of foreign income is straightforward:

• No tax on worldwide income
• No tax on foreign-source income
• No tax on overseas investments
• No tax on international business profits

This makes Bermuda particularly attractive for those with international income streams.

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Bermudian Tax on Investments

Investment income in Bermuda receives favorable treatment under tax law:

• Capital Gains: No taxation
• Dividends: No taxation
• Interest Income: No taxation
• Rental Income: No direct taxation, though property taxes apply

The system includes stamp duties on certain property transactions and document registrations.

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Bermudian Corporate Taxation

While Bermuda has no corporate income tax, businesses face other fees and taxes:

• Payroll Tax: Ranging from 0% to 10.25% (employer portion)
• Annual Company Fees: Based on assessable capital
• Customs Duties: Ranging from 0% to 25% on imported goods
• Foreign Currency Purchase Tax: 1% on foreign currency transactions

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Special Tax Regimes

Bermuda offers several special arrangements beneficial to international business:

Insurance/Reinsurance Benefits: Special licenses and regulatory frameworks for insurance companies.

Economic Investment Certificate: Available for significant investors with special residency rights.

New Business Relief: Potential payroll tax relief for qualifying new businesses.

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Regional Comparison

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Tax Planning for Bermuda

Effective financial planning in Bermuda requires attention to several key areas:

Employment Structure: Understanding payroll tax implications and employer obligations.

Property Investment: Managing stamp duties and property taxes effectively.

Business Structure: Choosing appropriate corporate structures and understanding annual fees.