Bermuda trust business licensing and oversight
The Bermuda Monetary Authority (BMA) licenses trust business in Bermuda. It publishes the licence categories and the criteria it says it assesses.
The regulator and its licensing role
The Bermuda Monetary Authority is the regulator responsible for trust business licensing. The Trusts (Regulation of Trust Business) Act 2001 provides for two types of licence, unlimited and limited.[1]
The trust business licensing framework includes licensing requirements and exemptions.[1]
The two licence categories
An unlimited licence authorizes the licensee to conduct trust business and solicit business from the public generally. Local and exempted companies incorporated under the Companies Act 1981 may apply, as may Overseas (Permit) Companies that have the Finance Minister's authorization to conduct business in Bermuda.
A limited licence restricts the holder from acting as sole trustee. It also limits the trust assets the trustee may hold to $30 million, unless the Authority agrees to a higher aggregate amount. Partnerships formed under named Bermuda partnership laws, permitted overseas partnerships, other unincorporated entities and individuals may apply for a limited licence.
A holder or applicant seeking consent to a limit above $30 million makes an application to the Authority for a higher figure. In deciding whether to approve an increased limit, the Authority assesses whether the business's nature and scale call for the establishment of a trust company. Its assessment includes the need for a limited licence, the proposed trustee's skills and integrity, the assets and relationships involved, and the range and complexity of the work. The Authority also considers the resources available to the undertaking.[1]
Minimum licensing criteria
The Authority says it will grant a licence only if it is satisfied that the applicant meets, and can continue to meet, the Act's minimum licensing criteria. The same criteria apply to limited and unlimited licences. The Authority retains discretion to refuse an application even when it is satisfied that the criteria have been met.[1]
The listed criteria cover the fitness and propriety of controllers and officers, as well as governance policies and processes suited to the undertaking's nature, size, complexity and risk profile. The Authority also expects the business to be conducted prudently, with arrangements and resources appropriate to its operations. Those prudential matters include a general strategy, planning arrangements and accounting policies.[1]
The remaining criteria address consolidated supervision and professional conduct. An undertaking's place in a group or its links with related companies must allow effective consolidated supervision. Its business must also be carried on with integrity and professional skills appropriate to the nature and scale of its activities.
Exemptions from licensing
An exemption order provides for a number of exemptions from licensing. An exempted company is to certify to the Authority that it qualifies for an exemption within three months of the order taking effect. It is also to notify the Authority of changes in the nature and scope of approved trust business after the Minister's approval, as soon as practicable.[1]
Full details of the licensing requirements and exemptions are set out in the Trusts (Regulation of Trust Business) Act 2001 and the related exemption order.
Questions and answers
Who regulates trust business in Bermuda?
The Bermuda Monetary Authority is the regulator for trust business licensing. Its role comes from the Trusts (Regulation of Trust Business) Act 2001.[1]
What does an unlimited trust licence allow?
It authorizes trust business and solicitation of business from the public generally. Companies and certain authorized overseas companies are potential applicants.[1]
What limit applies to a limited trust licence?
The holder cannot act as sole trustee and is restricted to holding trust assets up to $30 million. The Authority may agree to a higher aggregate amount following an application.[1]
What does Bermuda's trust business licensing regime cover?
Bermuda's trust business licensing regime sets out licensing categories, minimum criteria and exemptions, and the full requirements are contained in the legislation.[1]
Related resources
Related glossary terms
- Financial account (CRS): The Common Reporting Standard defines accounts at financial institutions, including deposit and custody accounts, plus equity and debt interests and insurance.
Related articles and guides
- Cayman Islands trust regulation and licensing: CIMA regulates trust business in the Cayman Islands. Its licence categories, fiduciary list and application process matter to U.S. citizens using a trustee.
- Singapore trust business regulation and licensing: MAS regulates Singapore trust business under the Trust Companies Act, with licence categories, exempt providers and applications published by the regulator.
- BVI trust business regulation and licensing: The BVI Financial Services Commission administers trust business under the Banks and Trust Companies Act and oversees providers operating in and from the BVI.
Tools and official documents
- Foreign trust reporting role finder: Tick the roles that describe a connection to a foreign trust or foreign account to see the forms the IRS and FinCEN instructions discuss. Roles can overlap.
Related pages
- Bermuda: overview: Start page for this jurisdiction.
- Types of trusts
- Taxation of trusts
- Reporting and information exchange
Sources and data notes
- Bermuda Monetary Authority, Licensing of Trusts in Bermuda. https://www.bma.bm/trust-licensing. Retrieved .
Dates in this block record when each source was read for this page.