Bermuda Fund Domicile
medium confidence — compiled with source citation from the investment brain.
Bermuda Fund Domicile
Bermuda Fund Domicile
Bermuda is a niche-but-material domicile — a small general-fund book (about 777 funds, roughly $310bn NAV) bolted onto a globally dominant insurance-linked-securities and reinsurance infrastructure. It is for funds that touch insurance risk — cat-bond issuers, reinsurance sidecars and collateralised quota-share vehicles — not for general hedge or private-equity strategies, where Cayman remains the default. ^[reports/Fund domicile profiles/Bermuda.md]
| Field | Detail |
|---|---|
| Legal posture | British Overseas Territory; common law; tax-neutral (out of scope of the 2025 CIT) |
| Regulator | Bermuda Monetary Authority (BMA) |
| Tax headline | No CIT/CGT/WHT for out-of-scope entities; 15% Pillar-Two CIT from 2025 for groups at or above €750m; tax assurance to March 31, 2035 |
| Market rank/share | 93.2% of global cat-bond issuance listed (BSX 2025); about 92% of global alternative capital (ABIR 2024) |
| Signature vehicles | Exempted company, Segregated Accounts Company (SAC/ISAC), Special Purpose Insurer (SPI) |
| Killer app | 3-day SPI approval for collateralised cat bonds and sidecars |
^[reports/Fund domicile profiles/Bermuda.md]
Legal forms
- Exempted company — open-ended and mutual funds, ILS issuers
- Exempted partnership, LP and unit trust — closed-end private capital and Japan-facing unit trusts
- Segregated Accounts Company (SAC, 2000) and ISAC (2019) — ring-fenced cells for sidecars and multi-series cat-bond issuers
- Special Purpose Insurer (SPI, 2008) — single-deal cat bonds and sidecars, fully funded and perpetually solvent
- Collateralised Insurer (CI) — reusable collateralised sidecar platforms
Bermuda has no Class I or Class II labels. The current split is Registered funds (Private, Professional A and B, Professional Closed) versus Authorised funds (Institutional, Administered, Specified Jurisdiction, Standard). ^[reports/Fund domicile profiles/Bermuda.md]
Tax posture
- No income, capital-gains or withholding tax for entities outside the 15% CIT scope, and no exchange controls
- The Corporate Income Tax Act 2023 applies 15% to Bermuda entities in groups at or above €750m revenue from fiscal years beginning January 1, 2025 — the enacted Pillar Two domestic minimum tax
- Every out-of-scope exempted undertaking holds a Tax Assurance Certificate shielding it to March 31, 2035
- US taxable investors face the same offshore-corporate PFIC and CFC caveats as Cayman; US tax-exempts route through blockers
- No meaningful treaty network — a permanent limitation
^[reports/Fund domicile profiles/Bermuda.md]
Why chosen, when not
- Choose specifically where the fund touches insurance risk — the ecosystem, rating-agency familiarity and the 3-day SPI pipeline repay the friction
- Avoid for plain hedge, private-equity or private-credit funds (Cayman wins on familiarity and scale), or where cost and speed on ordinary funds matter (no shelf entities, pre-consent required)
Structure roles
- Fills the insurance-linked SPV, issuer and sidecar layers: an SPI issues limited-recourse cat-bond notes and a CI runs reusable sidecar platforms
- Does not serve the master-feeder or blocker roles that Cayman and Delaware occupy for conventional funds
^[reports/Fund structuring tax jurisdictions.md]
Market data
- 777 funds and $310.5bn NAV (Q3 2025), essentially flat through 2025
- ILS funds were about 8% of regulated funds (Q4 2025, up from 4.4% in Q4 2023), and 6.1% of NAV
- The Bermuda Stock Exchange listed 93.2% of global ILS issuance, $65bn nominal and 746 listings (2025)
- Record $25.6bn new cat-bond issuance in 2025 (up 45% year over year); outstanding market $61.3bn
^[reports/Fund domicile profiles/Bermuda.md]
Regulatory weather 2023–2026
- Enacted: Corporate Income Tax Act 2023 (Pillar Two, from 2025)
- Enacted: Economic Substance Act 2018 (funds generally out of scope)
- Enacted: Beneficial Ownership Act 2025 central register
- Not blacklisted — absent from the EU Annex I list (October 16, 2026); precise current Annex II grey-list status not cleanly confirmed
- Pending: BMA 2025 consultation on principles-based sustainability disclosure for funds
^[reports/Fund domicile profiles/Bermuda.md]
Watch items
- Insurance-cycle dependence — ILS and cat-bond flow is rate-sensitive and cyclical, not steady-state
- Size asymmetry — about $310bn versus Cayman trillions; thin general-fund proposition
- The March 31, 2035 tax-assurance cliff — after that date neutrality is policy, not contract
- Annex II grey-list membership is an unresolved uncertainty rather than a clean bill of health
See fund-domiciles for the decision matrix and fund-entity-stack for where the insurance-linked SPV and issuer layers sit. fund-domicile-cayman is the general-purpose offshore benchmark.