The Ministry of Finance
___________________________________________________________________________________
Ministry of Finance Headquarters
Corporate
Landholding
Policy
October 2
2022
This document details the Policy as agreed by Cabinet for the holding of land in
Bermuda by Corporations
For information, please contact:
The Registrar of Companies
30 Parliament Street
Hamilton HM 12
Bermuda
e-mail: [email protected]
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Corporate Landholding Policy
As at 4 October 2022
PURPOSE
Further to the Companies Amendment Act 2014 (with regard to corporate landholding) the holding
of land by corporate entities became a restricted business practice under the Companies Act. This
policy is to provide guidance for the Minister in making the decision as to whether to provide consent
for a corporation to acquire and/or hold land.
LOCAL COMPANY
Freehold
Commercial
Property A local company may acquire and hold land, fee simple that is required for its
business purpose. The business purpose for the use of the land must be detailed and
presented to the Minister.
A local company whose business purpose is the ownership or the operation of a hotel
in Bermuda will requires a licence under the Hotels (Licensing and Control) Act
1969.
Mixed Use
Property A local company may acquire and hold land that has a combination of offices/shops
and residential units.
Residential
Property A local company may acquire specific residential properties, fee simple for
accommodation of the company’s employees or corporate hospitality/recreation.
Freehold properties with an ARV equal to, or in excess of, the benchmark established
by the Department of Immigration for restricted persons are eligible for this type of
acquisition. The company must have a physical presence in Bermuda.
1
There is no
requirement for the company to divest the residential units.
1
Physical presence is defined in the Companies Act 1981 section 120(6) as a company that “has a physical presence in
Bermuda if it operates from Bermuda with staff and management present in Bermuda, has an affiliate that does so, or
is a member of a group, one of the members of which operates in that manner.”
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999 Year Leasehold
Commercial
Property A local company may acquire and hold land that is required for its business purpose
via a lease or tenancy agreement beyond 50 years. The business purpose for the use
of the land must be detailed and presented to the Minister.
999 Year Leasehold
Residential
Property A local company may acquire and hold condominium(s) with an ARV equal to, or
in excess of, the benchmark established by the Department of Immigration for
restricted persons on leasehold up to 999 years for accommodation of the company’s
employees or corporate hospitality/recreation. The company must have physical
presence in Bermuda.
Conditions
Conditions may be applied to the sanction. Below is a non-exhaustive list of conditions that may be
imposed:
i. If the purpose of the company is property development, e.g. condominium
development, the company must divest itself of residential units within five years
from the date of consent. There will be no prohibition against the company
renting or leasing during the divesture period. However, the company must make
every reasonable effort to divest the property within the timeframe and should not
expect the divestiture period to be extended.
ii. If the purpose of the company is construction of Mixed Use Property that contains
residential units for lease, there will be no requirement for the company to divest
the residential units.
iii. If the business purpose changes, the company must again obtain ministerial
consent prior to changing its business purpose.
iv. In the case of Residential Property, the company will not be allowed under any
circumstances to lease or rent the property to third parties.
v. In the case of a private trust company, beneficiaries must be Bermudian and the
company must fully comply with the restrictions imposed by the Bermuda
Immigration and Protection Act 1957. Further, the company must file a report
annually with the Department of Immigration confirming that the beneficiaries
are Bermudian.
vi. In the case of a company limited guarantee, the provisions of section 9(2A)(c)
will apply, i.e. the Company’s bye-laws or memorandum must require that the
company’s assets that would otherwise be available to its members generally to
be transferred on its winding up either to another body with objects similar to its
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own or a body formed for promoting art, science, religion, charity, sport or any
other useful object.
The sanction may be revoked, if:
(a) terms and conditions of sanction are contravened; or
(b) the company ceases to operate;
Before revoking a licence, the Minister will give notice in writing to the Company and give it the
opportunity to be heard before he makes his decision.
EXEMPTED COMPANY
Freehold
Commercial
Property An exempted company may acquire and hold land, fee simple that is required for its
business purpose. The business purpose for the use of the land must be detailed and
presented to the Minister.
Residential
Property An exempted company may acquire specific residential properties, fee simple for
accommodation of the company’s employees or corporate hospitality/recreation.
Freehold properties with an ARV equal to, or in excess of, the benchmark established
by the Department of Immigration for restricted persons are eligible for this type of
acquisition. The company must have a physical presence in Bermuda. There is no
requirement for the company to divest the residential units.
999 Year Leasehold
Residential
Property An exempted company may acquire and hold a condominium for accommodation of
the company’s employees or corporate hospitality/recreation with an ARV equal to,
or in excess of, the benchmark established by the Department of Immigration for
restricted persons are eligible for this type of acquisition. The company must have a
physical presence in Bermuda.
2
In considering whether to grant permission to an exempted company to acquire and hold residential
property, the Minister will have regard to:
a. the economic situation in Bermuda and the pool of available property;
b. the nature and previous conduct of the company and the persons having an
interest in the company whether as directors, shareholders or otherwise;
c. any advantage or disadvantage to Bermuda and/or Bermudians which may
result from the company acquiring and holding residential property; and
2
Ibid
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d. the desirability of retaining in the control of Bermudians the economic
resources of Bermuda.
999 Year Leasehold
Commercial
Property Not allowed. For such purposes a local company must be used.
Conditions
Conditions may be applied to the sanction. Below is a non-exhaustive list of conditions that may be
imposed:
i. If the business purpose changes, the company must again obtain ministerial
consent prior to changing its business purpose.
ii. the company will not be allowed to lease or rent the property to third parties;
and
iii. should the company discontinue from Bermuda it must divest its interest in
the property within three years of its discontinuance.
The sanction may be revoked, if:
(a) terms and conditions of sanction are contravened; or
(b) the company ceases to operate;
Before revoking a licence, the Minister will give notice in writing to the Company and give it the
opportunity to be heard before he makes his decision.
