The law of Bermuda is based on the common law legal system of England and Wales.
The main categories of resident in Bermuda are:
Bermudian status. Serving as the island's de facto citizenship (nationality-wise, Bermudians are British Overseas Territories citizens by default), Bermudian status can be obtained:
- By birth. Although it is possible to be born Bermudian, simply being born in Bermuda does not automatically confer this status. One must be born in Bermuda to a parent who holds Bermudian status, in order to be considered Bermudian by birth.
- Through residence. People who have resided in Bermuda for over 20 years as permanent residents can apply for Bermudian status if they are Commonwealth citizens.
Spouse of a Bermudian. This status confers many of the rights of a Bermudian (free access to the job market, for example) but does not itself bring status rights. People with this status eventually become Bermudian in their own right. However the status is lost if the marriage itself breaks down.
Permanent resident. Permanent residency can be obtained:
- Through birth or family connection. Persons who were born in Bermuda, arrived Bermuda before their 16th birthday, or have an "immediate family connection" in Bermuda can apply for permanent residency upon their 18th birthday if they have resided in Bermuda for at least 10 years.
- Through residence. Persons who reside in Bermuda for over 15 years can apply to reside in Bermuda permanently.
Guest worker. Persons with this status have no citizenship rights, and require a work permit in order to work, and to reside on the island (although the spouses and minor children of guest workers are entitled to reside in Bermuda, also).
Property owner. A person who owns property under a licence (see Property Law, below) does not thereby acquire any citizenship rights. However such people are entitled to reside in Bermuda.
Two types of company can be incorporated in Bermuda:
- a local company, which is owned 60% or more by Bermudians; and
- an exempt company, which is owned chiefly by non-Bermudians
As a matter of broad principle (to which there are many exceptions):
only a local company may trade in Bermuda (there is a similar restriction on foreign companies, and on non-Bermudian sole traders and partnerships);
only local companies are expected to contribute to the local economy through taxation.
exempt companies may have a physical presence in, and employ staff in, Bermuda.
All conveyancing in Bermuda is unregistered. Bermuda has no equivalent of the 1925 property law legislation in England.
Bermuda has no capital gains taxes, but there is ad valorem Stamp Duty on sales and gifts of real estate.
Generally, Bermuda real estate cannot be vested in a corporation, except:
in a trust company;
in the management company of a condominium; or
in other cases with the permission of the minister, strictly limited by policy.
Bermuda real estate cannot be vested in a non-Bermudian, nor in a trust which may benefit a non-Bermudian, unless a licence is obtained on behalf of the non-Bermudian. The fee for the licence is a substantial percentage of the market value of the real estate.
With some limited exceptions, only real estate in the hands of non-Bermudians is available for sale to non-Bermudians.
It is common for Bermuda real estate to be owned by trusts.
See also Trust law
It is illegal to act as a trustee, as a business, without a licence. Generally, licences are only granted to corporations, so almost all professional trustees are trust companies. A professional person may act as a trustee if (and only if) he or she has a connection with a licensed trust company, and delegates certain functions to that trust company.
Unpaid private trustees are fairly common, although usually only for domestic trusts (see below).
The residence of a trust follows the residence of its trustees. A trust is therefore only Bermuda resident if a majority of its trustees are Bermuda resident.
Generally, Bermuda tax law is generous in its treatment of non-Bermuda assets, which include foreign currencies even where held at Bermuda banks. There is usually no tax charge in Bermuda (for example, to Stamp Duty) on settling non-Bermuda assets into trusts, nor on the income those assets produce, nor on their sale, nor on their distribution to beneficiaries. Like the other offshore financial centers ("tax havens") this has led to the use of Bermuda trusts by settlors and beneficiaries from higher-tax jurisdictions.
By contrast, Bermuda assets are generally charged to ad valorem Stamp Duty upon being settled into trust.
Bermuda (by statute) recognises the concept of non-charitable purpose trusts.
Domestic trusts (that is, trusts settled by Bermudians, with Bermudian beneficiaries) are very common, due to the stamp duty legislation, which imposes a tax of up to 15% of the value of Bermuda-assets in an estate on death, but does not tax an interest in a discretionary trust.
Litigation and the Bermuda Court System
Together with a number of tribunals, Bermuda has a three-tier court system:
- Magistrates Court, with a mainly criminal jurisdiction;
- Supreme Court, with a civil and criminal jurisdiction, covers the roles of the English Crown Court, County Court and High Court.
- Court of Appeal has equivalent status to the English Court of Appeal. There is a further right of appeal to the Privy Council in London.
The current Chief Justice of Bermuda is Ian Kawaley, who was appointed in 2012. Former Chief Justices include:
Richard Ground 2004-2012
Sir L. Austin Ward 1993-2004?
Sir James Astwood 1974-?
