Gibbons: New companies trend show Bermuda ‘moving in right direction’
Education and Economic Development Minister Grant Gibbons said yesterday the Registrar of Companies’ data on new company incorporations for the second quarter of 2014 continues to show a strong positive trend in the number of new company registrations.
Results following the close of the quarter in June showed that the number of new company registrations to date in 2014 were higher than any midyear totals for the last five years, according to a Government press release.
Dr Gibbons stated: “308 new companies were registered during the second quarter of 2014, resulting in a two percent increase over the 303 new registrations recorded for the same period in 2013. While this was a slight increase in the quarterly comparisons, we continue to see an upward trend in overall company formations in 2014.”
Coupled with the strong performance in international business registrations, the second-quarter results show positive signs for Bermuda’s economy, stated the release.
At the end of Q2 2014, there was a total of 19,151 local and exempt entities on the Register. That number showed increases over Q2 totals for both 2013 and 2012 which were 18,927 (revised) and 17,884, respectively.
“On the back of strong 2013 results, the 616 new company incorporations thus far in 2014 is the highest midyear level seen since 2008. Sustained growth in new business formations shows very positive impacts of our ongoing efforts to stimulate the economy. We’ve seen strong results in international company registrations. The incorporation of 268 new international businesses in Q2 2014 represents a seven percent increase over the 250 international companies registered in the same period in 2013, and a 23.5 percent increase over the 217 registrations in the second quarter of 2012.
“In addition, there were 40 new local companies registered in Q2 2014, compared to 53 in Q2 2013, and 34 in Q2 2012.”
Dr Gibbons said: “We are pleased with the continued growth in the total number of new company registrations.
“These results show that Bermuda is moving in the right direction. Growth in our business community is essential in laying the foundation for other positive economic impacts including overall job growth and increased spending in the local economy.
“We are looking forward to continued positive results for the remainder of 2014,” stated Dr Gibbons.
Some of the newcomers are in the investments business.
Elizabeth Denman, a director in the corporate department of law firm Conyers Dill and Pearman Ltd’s Bermuda office, said last year’s amendments to the Investment Funds Act, 2006, drafted jointly by the private sector and Government, made Bermuda a much more attractive jurisdiction for international investment fund managers.
As a result of changes to the legislation, she said that qualified managers can now establish a Class A Exempt Fund in one business day. “This is a speed to market which is unprecedented in the offshore world,” added Ms Denman, who is part of the Bermuda Business Development Agency’s Asset Management Group, a collaboration of key industry and Government leaders.
“The Ministry of Finance and Business Development and the Bermuda Monetary Authority have been highly responsive to the needs of international business and the benefits such business can bring to the Island,” she said.
“The amendments made to the Investment Funds Act moved through the consultative and legislative process in record time. From start to finish the process took an amazing five months with the highest levels of industry, Government and the Bermuda Monetary Authority putting their shoulder behind the process.”
She added: “It truly was a team effort and our international stakeholders have been impressed with our tenacity and results focused approach. As one senior partner in a top New York law firm recently commented ‘Bermuda, you have our attention!’
“Enquiries and instructions involving new fund vehicles have significantly increased during the course of this year and we are on track to have a banner year in this area,” said Ms Denman.
“Bermuda also continues to be highly attractive to private equity managers. We have seen significant growth in private equity funds focused on real estate plays and the healthcare sector, in addition to more traditional asset classes.”
Head of Conyers’ corporate department in Bermuda, David Cooke, noted the tide was turning on the Cayman Islands, which had taken business from the Island.
“We have seen renewed interest in the use of Bermuda as the jurisdiction in which to set up funds, a business that Cayman took from us many years ago.
“For the first time, we are getting reports that Cayman is concerned about Bermuda’s competition in this area.”
Another international business specialist law firm, Appleby, reported that offshore incorporations in 2013 had signalled the beginning of a recovery.
“Looking at the full year, Bermuda experienced one of the largest year-on-year increases at 16 percent, and early indications are that it will again exceed 1,000 new incorporations in 2014,” said Rory Gorman, managing director of Appleby Services (Bermuda) Ltd. “While the jurisdiction has yet to return to its pre-recession peak, the data reveal that new registration activity has definitely started to pick back up.”
