Bermuda: An Offshore: Trusts Overview

Bermuda’s Continued Prominence for High Net Worth Individuals

For decades, Bermuda has held a leading position in the private wealth sphere. Many of the world’s oldest and largest trusts are Bermuda trusts, meaning the jurisdiction frequently generates internationally significant trust litigation. Recent examples include the X Trusts litigation concerning the scope of protectors’ powers (resulting in the recent decision of the Judicial Committee of the Privy Council) and the Wong litigation, which clarified trustees’ powers under the proper purpose rule.

There are several reasons for Bermuda’s enduring prominence in private wealth structuring. Bermuda remains internationally recognised as a highly reputable and compliant jurisdiction, continuing to meet global standards relating to anti-money laundering, counter-terrorist financing and tax transparency, including obligations under the Foreign Account Tax Compliance Act (FATCA), the Common Reporting Standard and international exchange of information agreements. As a result, Bermuda entities continue to operate seamlessly in international markets.

Although Bermuda has undergone an important shift with the introduction of corporate income tax, the jurisdiction continues to impose no personal income tax, capital gains tax, inheritance tax, gift tax, wealth tax or estate tax, preserving its attractiveness for international private wealth planning.

Combined with political stability, sophisticated institutions, a world-class advisory services industry and decades of legislative refinement, Bermuda continues to offer one of the world’s most sophisticated private wealth environments.

Bermuda trust law remains substantially rooted in English common law while incorporating statutory enhancements developed by leading practitioners to meet the evolving needs of international families and fiduciaries.

Established legislative advantages

Bermuda has consistently demonstrated commercially minded innovation in trust law.

Examples of the responsible, commercially minded innovation seen in the Bermuda trust law arena are many, but some of the most important are listed below.

• Purpose trusts: Bermuda was the first offshore jurisdiction to recognise purpose trusts, an important element of many commercial structures, particularly in the insurance industry for which Bermuda is renowned (similar legislation followed in many jurisdictions around the world).
• Rule against perpetuities: Bermuda was also one of the first jurisdictions in the world to disapply the rule against perpetuities, permitting trusts in Bermuda to (generally) endure indefinitely.
• Setting aside trustee mistakes: When the rule in Hastings Bass was unexpectedly overturned in the English courts, Bermuda acted quickly to enshrine a similar rule in legislation, giving the island’s courts the discretion to set aside certain mistakes made by trustees, including in circumstances where they make decisions in ignorance of negative tax implications.
• Reserved powers: Bermuda has world-leading reserved powers provisions, enabling certain powers to be retained by the settlor or granted to trusted third parties without causing the trust assets to form part of the settlor’s estate or invalidating the trust.
• Private trust companies: Bermuda has also led the way with private trust companies, which are very widely used and have a range of benefits.
• Variation of trusts: Another star of the Bermuda trust offering is Section 47 of the Trustee Act 1975. This permits the Bermuda courts to confer on the trustees of Bermuda trusts the power to effect “expedient” transactions that they would not otherwise have the power to effect, which can include the variation of beneficial interests.
• Firewall provisions: Bermuda law also protects Bermuda trusts from foreign-law attacks based on overseas forced heirship laws, communal property laws, bankruptcy/insolvency provisions and divorce laws, offering significant asset protection opportunities.

Recent developments

Corporate income tax implementation

The Corporate Income Tax Act 2023, which came into force on 1 January 2025, was introduced in response to the OECD’s Pillar Two global minimum tax framework. The legislation imposes a 15% corporate income tax on Bermuda entities forming part of multinational enterprise groups with annual revenues exceeding EUR750 million.

For private wealth structures, however, the practical impact remains limited. Most private trusts and family holding structures fall well below the relevant threshold, meaning the overwhelming majority remain outside scope and Bermuda largely preserves its longstanding tax-neutral position for private clients.

Economic Investment Residential Certificate Programme

Bermuda remains committed to attracting high net worth individuals to the jurisdiction. Accordingly, it is constantly refining its Economic Investment Residential Certificate Policy, and it has made various changes to this policy recently.

Under this policy, a person who makes a BMD2.5 million investment in permitted investments in Bermuda and fulfils certain other criteria can apply for the right to reside and seek work in Bermuda for an indefinite period.

There is an automatic right to be given a work permit to work for any business in which the person has invested. Further, the successful applicant’s spouse and children (who are either under 18 years of age, or under 25 years of age if in full-time education) can generally reside in Bermuda.

Family office initiative

Bermuda has increasingly focused on positioning itself as a family office jurisdiction. The Bermuda government has announced that it is planning a suite of legislation to facilitate opening new family offices in Bermuda. This promises to be a welcome development to encourage the establishment of family offices on the island through a more streamlined regulatory framework, reflecting growing global demand among ultra-high net worth families for governance infrastructure, substance and sophisticated cross-border advisory expertise.

Beneficial ownership reform

On 3 November 2025, the Beneficial Ownership Act 2025 came into force, establishing a register unified for beneficial ownership of legal entitles, aligning with international transparency standards. The Act replaces the previous beneficial ownership regime in Bermuda and significantly expands beneficial ownership transparency requirements to align with international standards.

Importantly, the framework focuses on legal persons rather than trusts. Access remains restricted primarily to competent authorities and regulated entities, reflecting Bermuda’s continued effort to balance privacy considerations with international transparency obligations.

ESG and ethical investment reform

The Trustee Amendment Act 2025, which came in to force on 10 October 2025, amended the Trustee Act 1975 to enable trustees to consider settlor and beneficiary views on ethical investments when making investment decisions. This is a welcome change as there is presently uncertainty in most trust jurisdictions as to the ability of trustees with a general power of investment to exercise investment powers for reasons other than maximum financial gain.

Looking forward

Recent developments demonstrate Bermuda’s continued ability to evolve while preserving the legal certainty and sophistication that have long made it a leading private wealth jurisdiction.

As international tax reform, transparency obligations and governance expectations continue reshaping the offshore landscape, Bermuda has adopted a pragmatic approach: aligning with global standards while preserving the advantages that continue to attract international families and private capital.

Combined with continued trust law innovation, forthcoming family office legislation and a sophisticated regulatory framework, Bermuda remains exceptionally well positioned as a jurisdiction of choice for high net worth individuals and multi-generational wealth planning.