Bermuda used to be the poster child for zero corporate tax. For decades, companies flocked to the island not just for the pink sand beaches, but for the total absence of corporate income tax. That era is over.
In 2025, Bermuda introduced a corporate income tax for the first time in its modern history. Why? Global pressure. The OECD’s Pillar Two framework forced jurisdictions like Bermuda to implement a minimum 15% corporate tax or watch their largest multinational clients get taxed anyway by their home countries. Bermuda chose compliance over irrelevance.
If you’re considering Bermuda for your corporate structure in 2026, you need to understand what this new tax means. And more importantly, whether the island still offers any meaningful advantages.
The New Reality: 15% Flat Corporate Tax
As of 2026, Bermuda imposes a 15% flat corporate income tax on qualifying companies. This isn’t a universal tax hitting every business on the island. It’s targeted.
The tax applies primarily to large multinational enterprises (MNEs) that are part of groups with global revenues exceeding €750 million (approximately $810 million). This is the OECD threshold. If your group doesn’t meet that revenue test, you’re likely still operating tax-free in Bermuda. For now.
| Tax Element | Details |
|---|---|
| Tax Rate | 15% |
| Tax Type | Flat (no brackets) |
| Assessment Basis | Corporate income |
| Currency | BMD (Bermudian Dollar, pegged 1:1 to USD) |
| Applicable To | MNEs with group revenue ≥ €750M (~$810M) |
The Bermudian Dollar is pegged at parity with the US Dollar, so there’s no currency risk when calculating obligations. BMD 100 = USD 100. Simple.
Who Actually Pays This Tax?
Let me be blunt. This tax was designed for the insurance giants, reinsurers, and financial holding companies that have used Bermuda as a booking center for decades. Think of the massive (re)insurance groups with Bermuda subsidiaries pulling in billions globally. They’re the target.
If you’re running a smaller offshore structure—consulting company, IP holding, boutique fund—you’re probably still outside the scope. Bermuda hasn’t rolled out a universal corporate income tax. Yet. But the precedent is set. The infrastructure is there. Expanding the tax base in the future would be trivial.
I’ve watched this happen before. Jurisdictions introduce “limited” taxes under international pressure, then slowly widen the net once the administrative machinery is in place. Don’t assume your exemption is permanent.
What About the Other Costs?
Even if you’re exempt from the 15% CIT, Bermuda was never a “cheap” jurisdiction. It’s a tax haven, not a cost haven.
Annual government fees for exempted companies range from BMD 1,995 (~$1,995) to BMD 31,120 (~$31,120) depending on your company’s authorized share capital. If you’re over BMD 100,000 in share capital, you’re looking at the higher end. Add legal, registered office, and compliance costs, and you’re easily spending $5,000-$15,000 annually for a small structure.
For larger entities subject to the new corporate tax, the cost structure becomes more complex. You’ll need proper accounting aligned with OECD standards, transfer pricing documentation, and likely local tax advisory. Bermuda doesn’t have a deep bench of tax advisors compared to Luxembourg or Singapore. Expect to pay premium rates for competent counsel.
Is Bermuda Still Worth It?
Depends what you’re optimizing for.
Reputation: Bermuda is still considered a legitimate, well-regulated jurisdiction. It’s not on any major blacklists. If you need a respectable offshore domicile with solid legal infrastructure (English common law, experienced commercial court), Bermuda delivers.
Substance: Post-BEPS, Bermuda actually enforces economic substance requirements. You need real offices, directors, employees if your business is in scope (IP holding, financing, shipping, etc.). This is good if you’re building a defensible structure. Bad if you wanted a pure paper company.
Tax optimization: For large MNEs, the 15% rate is now the global floor anyway. Bermuda’s implementation is relatively clean—no weird surtaxes, no local municipal taxes layered on top. It’s just 15%. If you were going to pay 15% somewhere due to Pillar Two, Bermuda’s stable political environment and strong regulatory framework make it a defensible choice.
For smaller players still outside the €750M threshold? You’re still enjoying zero corporate tax. But I’d be preparing for the possibility that Bermuda expands this regime. The revenue temptation will grow, especially as the government needs to fund the compliance infrastructure it just built.
The Strategic Angle: Insurance and Captives
Bermuda remains the global leader for captive insurance. If you’re setting up a captive, the island’s expertise, regulatory sophistication, and market depth are unmatched. The 15% corporate tax doesn’t fundamentally change the captive value proposition—most captive structures weren’t about dodging taxes, they were about risk management and accessing reinsurance markets.
The same applies to larger (re)insurance operations. Bermuda’s regulatory environment under the Bermuda Monetary Authority (BMA) is world-class. The new tax is a cost of doing business, but it doesn’t erase the operational and strategic advantages.
Practical Considerations
If you’re structuring a new entity in Bermuda in 2026, here’s what I’d focus on:
1. Confirm your revenue threshold. Get clarity on whether your group meets the €750M test. If you’re borderline, understand how Bermuda’s tax authority (the Office of the Tax Commissioner) interprets group revenue for multinational structures.
2. Document substance rigorously. Even if you’re tax-exempt, Bermuda’s economic substance rules are strict. Keep records of board meetings, employee contracts, office leases. If you’re challenged by another jurisdiction (your home country, an EU member state), you need to prove Bermuda isn’t just a mailbox.
3. Plan for compliance costs. If the 15% tax applies to you, budget for proper tax filings, audits, and advisory. Bermuda isn’t a DIY jurisdiction for corporate tax compliance.
4. Monitor legislative changes. The 2025 tax law is new. Expect amendments, clarifications, and potentially scope expansions. Stay plugged into local legal developments or retain a Bermuda law firm on retainer.
My Take
Bermuda went from tax-free paradise to OECD-compliant jurisdiction in one legislative move. That’s the reality of 2026. The island made a calculated decision to preserve its relevance for the largest players by accepting the 15% floor, while keeping smaller operations tax-free.
Is it still a tax haven? Technically, yes, for most companies. But the writing is on the wall. The zero-tax era is ending globally, and Bermuda is positioning itself as a high-quality, compliant jurisdiction rather than a pure tax dodge.
If you’re a large enterprise, the 15% rate is competitive within the new global baseline. If you’re smaller, enjoy the tax exemption while it lasts—but don’t build a strategy assuming it’s eternal. Bermuda proved it will adapt to international pressure. Next time, that adaptation might include broadening the tax base.
I’m constantly auditing these jurisdictions. Tax laws shift, enforcement priorities change, and what’s true today may not hold in 12 months. If you have recent official documentation or firsthand experience with Bermuda’s new corporate tax regime, I’d appreciate the insight. And if you’re reading this months from now, check back—I update my database regularly as new information surfaces.
Bermuda isn’t dead as a structuring option. But it’s no longer the simple, zero-tax solution it once was. Adjust your expectations and plan accordingly.