Law and Practice

 1. Corporate Governance Requirements

 1.1 Corporate Forms and Governance Requirements

The principal forms of business organisation in Bermuda are as follows.

• Companies limited by shares, incorporated under the Companies Act 1981 (the “Companies Act”). This is by far the most common corporate vehicle in Bermuda and is the primary focus of this submission.
• Limited liability companies (LLCs), formed under the Limited Liability Company Act 2016 (the “LLC Act”).
• Partnerships, including general partnerships under the Partnership Act 1902, limited partnerships under the Limited Partnership Act 1883 and exempted partnerships under the Exempted Partnerships Act 1992.
• Permit companies (also referred to as overseas companies), which are companies incorporated outside Bermuda that obtain a permit under Part XI of the Companies Act to carry on business in or from within Bermuda.

Bermuda companies fall into two principal categories:

• local companies, incorporated by Bermudians to conduct retail business primarily within Bermuda; and
• exempted companies, incorporated primarily to conduct international business outside Bermuda.

The vast majority of Bermuda’s international business entities are exempted companies.

 1.2 Corporate Governance Legislation and Regulation

The principal sources of corporate governance requirements for Bermuda companies are:

• the Companies Act;
• the company’s memorandum of association and bye-laws (the constitutional documents);
• Bermuda common law and equitable principles, including directors’ fiduciary duties derived from English common law;
• sector-specific legislation and regulation, including the Insurance Act 1978, the Banks and Deposit Companies Act 1999, the Investment Business Act 2003, the Investment Funds Act 2006 and the Digital Assets Business Act 2018;
• rules, codes, statements of principle, and guidance issued by the Bermuda Monetary Authority (BMA), including the Insurance Code of Conduct (2022), the Banks and Deposit Companies Code of Conduct (2022) and the Digital Asset Business – Code of Practice (2023);
• the listing rules of any stock exchange on which the company’s securities are listed (eg, the NYSE, Nasdaq, HKEX, LSE or the Bermuda Stock Exchange (BSX)); and
• the Economic Substance Act 2018.

Bermuda does not have a standalone domestic corporate governance code. For companies with publicly traded shares, corporate governance requirements are derived from Bermuda company law together with the rules of the relevant listing venue. Companies listed on the BSX are required to comply with the BSX Listing Regulations (as amended) (the “Listing Regulations”).

The BSX is supervised and regulated by the BMA under the Bermuda Stock Exchange Company Act 1992 and operates as a self-regulatory organisation with statutory authority to adopt and enforce rules governing its trading members and listed issuers. However, neither the BSX nor the BMA are a securities commission or financial conduct authority.

Recent Legislative Developments

A number of significant recent legislative developments also affect the corporate governance landscape in Bermuda.

The Companies (Prohibition of Bearer Shares and Nominee Directors) Amendment Act 2025

Effective 10 December 2025, this Act:

• creates certain limitations in relation to the appointment of nominee directors;
• requires enhanced disclosure of alternate director particulars;
• mandates the conversion of any outstanding bearer shares to registered shares within 90 days; and
• requires companies discontinuing out of Bermuda to appoint a local agent to retain beneficial ownership and accounting records for a minimum of five years.

The Benefit Entities Act 2025

Effective 1 December 2025, the Benefit Entities Act 2025 (BEA) inserted Part XIIB into the Companies Act (and made analogous amendments to the LLC Act and Limited Partnership Act 1883), allowing Bermuda entities to opt in as benefit companies with a stated public benefit purpose. This represents Bermuda’s first legislative framework for purpose-driven corporate governance.

More broadly, ESG governance continues to develop in Bermuda. Boards are expected to oversee sustainability-related risks and disclosures, and to ensure alignment with emerging global ESG frameworks. See 7. Environmental, Social and Governance for more detail on ESG governance.

The Beneficial Ownership Act 2025

Effective 3 November 2025, the Beneficial Ownership Act 2025 (BOA) consolidated beneficial ownership requirements into a single statute, expanded the scope of legal persons required to maintain beneficial ownership information and transferred the central register from the BMA to the Registrar of Companies (ROC). There is an exemption for entities listed on the BSX or any other appointed stock exchange (as defined in the Companies Act).

The Corporate Income Tax Act 2023

Effective for fiscal years beginning on or after 1 January 2025, this introduced a 15% corporate income tax for Bermuda constituent entities of large multinational groups. This introduces new governance and reporting obligations for in-scope multinational groups, including board oversight of tax governance and compliance frameworks.

The Personal Information Protection Act 2016

Effective 1 January 2025, the Personal Information Protection Act 2016 (PIPA) imposes data protection obligations on all organisations in Bermuda that use personal information, affecting governance and compliance structures and breach response.

 1.3 Companies With Publicly Traded Shares

As noted in 1.1 Corporate Forms and Governance Requirements, the Companies Act is the principal legislative source. The Companies Act generally does not distinguish between public and private limited companies and accordingly there is no distinction in respect of director duties. As noted previously, the principal differentiator is whether a company is local or exempted. Part III of the Companies Act deals with prospectuses and public offers, but those rules do not generally apply in relation to exempted companies.

Key governance provisions include:

• the requirement for a minimum number of directors (Section 91);
• duties regarding the maintenance of a register of directors and officers (Section 92A);
• requirements for the keeping of minutes and records (Section 83);
• the obligation to maintain a registered office in Bermuda (Section 62); and
• provisions governing the convening and conduct of general meetings (Sections 71–81) and the duty of care of officers (Section 97).

For regulated entities, the BMA imposes additional governance requirements. Insurance companies, for example, are subject to the BMA’s Insurance Code of Conduct, which contains detailed provisions on board composition, risk management, internal controls and the fitness and propriety of directors and senior officers. Similar requirements apply under the relevant sector-specific legislation for banks, investment businesses and digital asset businesses.

 1.4 Stock Exchange Requirements Developments

The most recent significant change to the Listing Regulations took effect on 1 January 2026, when the BSX introduced consolidated Listing Regulations for debt replacing and incorporating five previously separate regulatory instruments: Section I (All Issuers), Section IIC (Domestic Issuers – Debt Securities), Section IIIB (International Issuers – Debt Securities), Section V (Insurance Related Securities) and Section VI (Derivative Warrants), together with the relevant aspects of the BSX Listing Guidelines (April 2025).

The Listing Regulations in respect of equity (Section I as it applies to equity, collective investment vehicles and depositary receipts, and Sections IIA, IIB and IIIA) have not recently been revised. However, the BSX has indicated that these will be reviewed in 2026, with a particular focus on aligning the beneficial ownership disclosure regime with Financial Action Task Force transparency standards and the practices of comparable exchanges. The Listing Regulations for collective investment vehicles will be reviewed after the equity regulations.

 2. Corporate Management

 2.1 Principal Bodies or Functions

The principal bodies involved in the governance and management of a Bermuda company are as follows.

The Board of Directors

The board is the primary governing body and is responsible for the management and supervision of the company’s business and affairs. Under Section 91 of the Companies Act, every company must have a minimum of one director (although regulated entities may be required to have a larger board).

The Shareholders in a General Meeting

Shareholders exercise their powers collectively in a general meeting. Certain decisions are or may be reserved by the Companies Act or by the company’s bye-laws to the shareholders. Generally, the shareholders cannot bind the board, so must replace the board and/or amend the bye-laws to exercise greater control.

Officers

Under Section 92 of the Companies Act, every company is required to have a secretary. Every exempted company must have one director, a secretary or resident representative who is ordinarily resident in Bermuda (Section 130). The board may also appoint a president, chairman and such other officers as the bye-laws may prescribe.

Committees of the Board

The bye-laws commonly authorise the board to delegate powers to committees and other authorised persons. Listed and regulated companies frequently maintain audit, compensation, nomination and risk committees.

 2.2 Types of Decisions

Board of Directors

Unless reserved to the shareholders by the bye-laws or the Companies Act, the board has wide powers to administer the company. The board is responsible for the affairs of the company (Section 91), including strategic direction, financial oversight, risk management, the authorisation of material contracts and transactions. The board also has specific decision-making powers, such as the appointment of the secretary (Section 92). The board also has the power to declare dividends (Section 54).

The board must also oversee applicable compliance frameworks for AML/ATF, PIPA, sanctions, outsourcing and cyber-risk, all of which are current BMA supervisory priorities.

Shareholders

Certain decisions are or may be reserved by the Companies Act or the bye-laws for shareholder approval. Under the Companies Act, these include:

• amendments to the memorandum of association (Section 12);
• amendments to the bye-laws (Section 13);
• the election and removal of directors (Sections 91–93);
• the appointment and remuneration of auditors (Section 89);
• the waiver of laying accounts and appointing an auditor (Section 88); 
• the approval of amalgamations and mergers (Section 106);
• the approval of schemes of arrangement (Section 99); and
• the voluntary winding-up of the company (Section 161).

Unless the Listing Regulations apply, shareholders do not have a right of pre-emption under the Companies Act or common law.

Under Section 24A, subject to its memorandum and bye-laws, a company may agree that certain powers reserved to its members may not be exercised. These are Sections 10 (change of name), 10A (secondary name), 12 and 13 (amendments to the memorandum and bye-laws), 45 (power of company limited by shares to alter its share capital), 46 (reduction of share capital), 93 (removal of directors), 106 (shareholder approval of amalgamation or merger), 161 (circumstances in which a company may be wound up by the court) and 201 (circumstances in which a company may be wound up voluntarily). This gives the initial subscribers to the memorandum of association the ability to vest significant power in the board of directors over the future direction of the company.

Officers

Officers exercise delegated authority from the board within the scope of their appointment.

 2.3 Decision-Making Processes

Board Meetings

The Companies Act does not prescribe detailed procedural requirements for board meetings, leaving these to the bye-laws. Customarily, bye-laws provide that the quorum is a majority of directors, that decisions are made by simple majority vote and that the chairman has a casting vote in the event of a tie. There is wide flexibility for the bye-laws to provide for voting at the board level – eg, for certain directors to hold higher voting rights and for decisions to be subject to shareholder approval. The bye-laws typically permit board meetings to be held by telephone or other electronic means. Written resolutions signed by all directors are also generally permitted under the bye-laws, consistent with Section 77A of the Companies Act.

General Meetings

The Companies Act prescribes detailed requirements for general meetings. An annual general meeting must be held at least once in each calendar year (Section 71), unless dispensed with by an election under Section 71A. A special general meeting can be called by the board at any time between annual general meetings. Notice requirements are set out in Section 75 (typically not less than five days’ notice, subject to the bye-laws specifying a longer period).

A quorum is typically prescribed by the bye-laws (commonly two shareholders present in person or by proxy). Voting is by show of hands unless a poll is demanded. Shareholders may appoint proxies to attend and vote on their behalf (Section 77). Shareholders may also pass written resolutions in lieu of a meeting, provided the requisite majority signs the resolution (Section 77A).

 3. Directors and Officers

 3.1 Board Structure

Bermuda operates a unitary board system. There is no requirement under the Companies Act for a two-tier or supervisory board structure. The board of directors is a single body that is collectively responsible for the overall governance and management of the company. 

The Companies Act requires a minimum of one director (Section 90), though regulated or listed companies may be required to have more. The bye-laws may prescribe a maximum number. There is no statutory requirement for the separation of the roles of chairman and chief executive officer, though this may be required by applicable listing rules. Corporate directors are permitted.

 3.2 Board Members

The Companies Act does not prescribe distinct legal categories of directors. In practice, the following roles might be assigned.

• Chairman: typically appointed by the board under the bye-laws, the chairman presides over meetings of the board and shareholders.
• Executive directors: directors who are also officers or employees of the company, with responsibilities for day-to-day management.
• Non-executive directors: directors who do not hold an executive position within the company and contribute independent oversight and judgement.
• Independent directors: non-executive directors who meet the independence criteria of applicable listing rules (if any) or regulatory code of conduct. There is no statutory definition of “independent director” under Bermuda law. Under the Insurance Code of Conduct, commercial insurers must generally appoint an independent non-executive director.
• Alternate directors: permitted under many bye-laws, alternate directors may attend and vote at board meetings in the absence of the appointing director. Following the Companies (Prohibition of Bearer Shares and Nominee Directors) Amendment Act 2025, enhanced disclosure to the ROC is now required, being whether the director holds the position as an alternate director and, if so, the particulars of the existing director for whom the alternate is appointed. 

All directors, regardless of their designation, owe the same fiduciary duties and duties of care to the company.

 3.3 Board Composition

Under the Companies Act, the only compositional requirement is the minimum number of directors (Section 90). There is no statutory requirement for independent directors, gender diversity or any specific board composition.

For regulated entities, the BMA may impose additional requirements. For example, the Insurance Code of Conduct requires boards of insurers to have an appropriate mix of skills, knowledge and experience, and to include a sufficient number of non-executive directors to provide effective oversight.

For listed Bermuda companies, the listing standards of the relevant exchange apply (eg, BSX, NYSE Listed Company Manual or Nasdaq Listing Rules).

 3.4 Appointment and Removal of Directors/Officers

The first directors are elected at the first shareholder meeting on incorporation. Subsequently, directors are typically elected by shareholders at the annual general meeting for a term (Section 91 of the Companies Act). The bye-laws may also empower the board to appoint directors as additional board members or to fill vacancies, subject to re-election at the next general meeting.

Removal of directors is governed by Section 93 of the Companies Act. A director may be removed before the expiry of the director’s term by a resolution of a special general meeting, provided that such director has been given 14 days’ notice and may be heard at such meeting. The bye-laws may prescribe alternative grounds and/or procedures for director removal.

Officers are appointed and removed by the board in accordance with the bye-laws. There is no statutory minimum or maximum age for directors under the Companies Act.

The Companies Act allows for the appointment of corporate directors. Persons who are undischarged bankrupts are disqualified from acting as directors without leave of the court (Section 91(4)). Sector-specific legislation may impose fitness and propriety requirements for directors of regulated entities – eg, insurance and banking.

 3.5 Independence of Directors

Under Bermuda common law, directors are subject to fiduciary duties that include the duty to avoid conflicts of interest and the duty not to profit from their position without the company’s informed consent. Section 97 of the Companies Act addresses disclosure of interests. A director who is interested in a material contract or transaction with the company must declare that interest prior to or at the board meeting at which the contract is considered.

The bye-laws may contain provisions permitting a director to vote on a contract or transaction in which the director has an interest, provided the interest has been duly disclosed.

There is no statutory definition of director independence under Bermuda law. Where applicable, the independence criteria of the relevant listing exchange or regulated sector code of conduct will apply.

 3.6 Legal Duties of Directors/Officers

Directors’ duties under Bermuda law are derived principally from common law and equity, as the Companies Act does not contain a comprehensive statutory code of directors’ duties. The principal duties are as follows.

• Duty to act honestly and in good faith with a view to the best interests of the company: directors must exercise their powers for the purposes for which they were conferred and for the benefit of the company as a whole.
• Duty of care, diligence and skill: directors must exercise the care, diligence and skill that a reasonably diligent person with the general knowledge, skill and experience of that director would exercise.
• Duty to avoid conflicts of interest: unless authorised by the company, directors must not place themselves in a position where their personal interests conflict with their duties to the company.

Officers owe analogous duties commensurate with their office.

 3.7 Responsibility/Accountability of Directors

Under Bermuda law, directors owe their fiduciary duties to the company as a separate legal entity, not to individual shareholders. This is consistent with the established common law position derived from English common law.

In an insolvency scenario, directors must have regard to the interests of creditors, as creditor interests may become paramount where the company is unable to pay its debts as they fall due.

There is no general statutory obligation for directors to consider the interests of employees, the community or the environment, though these considerations may be relevant to the determination of what is in the best interests of the company in appropriate circumstances.

 3.8 Breach of Directors’ Duties

As fiduciary duties are owed to the company, the right to bring an action for breach is primarily the company’s. In practice, this means that the board of directors will authorise the commencement of proceedings.

A member of a company may bring proceedings on behalf of the company (a derivative action) where it can show that there is:

• fraud on the minority; and
• those taking advantage of the fraud control the company.

The high bar will make it difficult to establish such claims in practice.

A member of a company can bring a claim when they allege wrongdoing against them in a personal capacity. This may occur, for example, where there is a breach of the bye-laws, which are effectively a contract between the members and the company. 

In the course of winding up a company, a receiver, liquidator, creditor or contributor (shareholder) may bring proceedings against an officer for misapplication of funds, breach of trust or misfeasance (Section 247 of the Companies Act). The court is afforded wide powers to award compensation.

The Minister on their own volition or upon application by a proportion of the members of the company (as determined by the Minister) may investigate the affairs of a company (Section 110 of the Companies Act).

As an alternative to remedy winding-up, a shareholder may petition for relief under Section 111 of the Companies Act on the ground that the affairs of the company are being conducted, or have been conducted, in a manner oppressive or unfairly prejudicial to the interests of some part of the shareholders. The court has discretion as to the relief it may grant.

Otherwise, general remedies are available for breach of directors’ duties. These might include damages, rescission of contracts entered into in breach of duty or injunctive relief.       

 3.9 Other Claims/Enforcement Against Directors/Officers

In addition to common law claims for breach of fiduciary duty, directors and officers may face the following:

• in an insolvency scenario, criminal liability for fraud, dishonesty or knowing participation in the carrying on of business with intent to defraud creditors (Section 246);
• personal liability where they have acted while disqualified (Section 94); and
• regulatory enforcement by the BMA for breaches of sector-specific conduct requirements, which may include civil penalties, prohibition orders, injunctions, public enforcement actions, and warnings and decision notices.

The legislation on fraudulent preference under Section 237 of the Companies Act provides that certain transactions within six months of insolvency may be set aside (subject to available defences – eg, a bona fide transfer or disposition). Liability can attach to the preferred person (Section 238), so this is unlikely to be relevant to a director or officer. 

Section 98 of the Companies Act permits a company to indemnify directors and officers against liabilities incurred in their capacity as such, except for fraud or dishonesty. Most Bermuda companies maintain broad indemnification provisions in their bye-laws. This means that directors may require that the company pay the cost of defending the claim and will only be liable if fraud or dishonesty is proven. In addition, most Bermuda companies pay for and carry directors’ and officers’ insurance.

The fiduciary duty itself cannot be excluded, though its consequences may be mitigated by ratification by resolution of shareholders, indemnification in the bye-laws and directors’ and officers’ insurance.

 3.10 Payments to Directors/Officers

The Companies Act does not prescribe specific rules on director remuneration. There is no general Bermuda law obliging disclosure of director remuneration. The bye-laws typically provide that directors’ remuneration shall be determined by the board. Under Section 96 of the Companies Act, any loan to a director must be authorised by not less than 90% of the members holding voting rights.

For companies listed on exchanges, disclosure of executive and director compensation may apply. For domestic issuers listed on the BSX, information regarding benefits and remuneration must be disclosed in the prospectus. For international issuers, the requirements will be governed by the primary listing authority. There is no Bermuda requirement to have a remuneration committee. 

It is possible that regulated entities may be required to report certain remuneration information to the BMA – for example, where there are conflicts of interest or incentive structures that the BMA considers imprudent.

 4. Shareholders

 4.1 Companies and Shareholders

The relationship between a Bermuda company and its shareholders is governed by the Companies Act, the common law, the company’s memorandum of association and bye-laws, and general principles of contract and equity. The memorandum and bye-laws constitute a contract between the company and its members, and between the members.

Every company is required to maintain a register of members at its registered office in Bermuda (Section 65 of the Companies Act). The register of members is open to inspection by any member of the public without charge for not less than two hours a day during business hours (subject to reasonable restrictions) (Section 66). The company may give notice to close its register of members for up to 30 days in a year.

The ROC does not maintain a public register of shareholders. The central beneficial ownership register under the BOA (see 1.4 Stock Exchange Requirements Developments) is not publicly accessible but is available to government authorities and AML/ATF regulated entities. Further guidance on the BOA is expected to be published in the near future.

 4.2 Role of Shareholders

Bermuda law follows the traditional common law principle that the management of the company is vested in the board of directors, not the shareholders. Shareholders cannot ordinarily direct the board to take or refrain from taking specific business decisions unless the bye-laws expressly provide otherwise. There is a wide flexibility for the company bye-laws to give shareholders reserved matter controls over board actions on most business decisions.

Shareholders exercise their influence through reserved matters (matters requiring shareholder approval under the Companies Act or the bye-laws), the election and removal of directors and the right to requisition special general meetings. Under Section 74 of the Companies Act, shareholders holding not less than 10% of the paid-up capital carrying the right to vote may requisition the directors to convene a special general meeting. Holders of not less than 5% of the voting rights may require that a members’ resolution be circulated at the annual general meeting (AGM) (Section 79).

 4.3 Shareholder Meetings

Every company must hold an AGM in each calendar year, unless an election has been made under Section 71A of the Companies Act to dispense with the holding of AGMs. The election requires unanimous consent from all shareholders.

Key procedural requirements include the following.

• Notice: not less than five days’ written notice (Section 75), though the bye-laws commonly prescribe longer periods (eg, 14 or 21 days for companies). Notice must state the place, day, hour and, in the case of special general meetings, the general nature of the business to be considered (Section 71(3)).
• Quorum: commonly prescribed by the bye-laws, but may be one shareholder in person or by proxy.
• Virtual meetings: permitted, provided that all persons participating in the meeting can communicate with each other simultaneously (Section 75A).
• Voting: ordinarily by show of hands (one vote per member), unless a poll is demanded. On a poll, voting is in accordance with the rights attached to the shares.
• Proxies: shareholders may appoint proxies to attend and vote (Section 77).
• Written resolutions: in lieu of a meeting, shareholders may pass resolutions by written consent signed by the requisite majority (Section 77A).
• Special general meetings: may be convened by the board or requisitioned by qualifying shareholders (Section 74).

 4.4 Shareholder Claims

Shareholders in Bermuda have the following limited principal bases of claim.

Personal Claims

Where a shareholder’s individual rights are infringed (eg, rights under the memorandum and bye-laws, the right to receive declared dividends, the right to vote), the shareholder may bring a direct action.

Derivative Actions

A shareholder may bring proceedings on behalf of the company where it can show that there is:

• fraud on the minority; and
• those taking advantage of the fraud control the company.

Oppression/Unfair Prejudice

Under Section 111 of the Companies Act, a shareholder may petition the court on the ground that the company’s affairs are being conducted in a manner that is oppressive or unfairly prejudicial to the interests of some part of the members, which in practice may be difficult to prove.

Just and Equitable Winding Up

Under Section 161 of the Companies Act, a shareholder may petition for the winding-up of the company on just and equitable grounds. In practice, the circumstances in which the court would wind up a company are limited.

Appraisal Rights

Under Section 106 of the Companies Act, dissenting shareholders in an amalgamation or merger may apply to the court for a determination of the fair value of their shares.

 4.5 Shareholders in Publicly Traded Companies

Bermuda law does not impose statutory disclosure thresholds for significant shareholdings. However, the bye-laws of many listed Bermuda companies require shareholders to notify the company when their holdings cross specified thresholds. This may also be required under the listing rules of an exchange.

Under Sections 8 and 11 of the BOA, a company may give notice to a shareholder to provide beneficial ownership information. If the bye-laws allow and information is not provided, under Section 17 of the BOA the company may issue a warning notice and decision notice prior to imposing restrictions on the relevant shareholder. Where the bye-laws do not allow this, the company must apply to court to issue warning and decisions notices, as well as impose restrictions.

The BOA requires all legal persons in Bermuda to identify and maintain records of their beneficial owner, generally being any individual owning 25% or more of a company. This information is filed with the ROC. The central register is not publicly accessible but is available to government authorities and AML/ATF regulated entities. There is an exemption for any entity listed on the BSX or another appointed stock exchange.

For registered insurers, the Insurance Act 1978 imposes a separate shareholder disclosure regime that operates independently of any listing rules. A “shareholder controller” is defined broadly to include any person who holds 10% or more of the shares carrying voting rights in a registered insurer or its parent company. There are four control bands:

• 10% or more but less than 20%;
• 20% or more but less than 33%;
• 33% or more but less than 50%; and
• 50% or more.

Where the shares of the insurer (or its parent) are not traded on a recognised stock exchange, a person is prohibited from becoming a shareholder controller at any of those thresholds unless the person has first served written notice on the BMA (Section 30D). Where the shares are traded on a recognised stock exchange, prior consent is not required, but the person must notify the BMA in writing within 45 days of becoming a 10%, 20%, 33% or 50% shareholder controller (Section 30E).

In both cases, a shareholder controller must also notify the BMA when disposing of shares such that the person’s holding falls below any of those thresholds (Section 30EA). The BMA may object to a new or increased level of control if it is not satisfied that the person is fit and proper to be a controller (Section 30F) and contravention of the notification requirements is an offence.

 5. Corporate Reporting and Disclosures

 5.1 Financial Reporting Requirements

Under Section 83 of the Companies Act, every company must keep proper books of account sufficient to give a true and fair view of its affairs and explain its transactions.

Every company must present financial statements to its shareholders at each AGM, or circulate them if AGMs have been dispensed with. The Companies Act does not prescribe a specific accounting standard; companies commonly adopt US GAAP, IFRS or other recognised standards depending on their circumstances and listing requirements. There is no obligation under the Companies Act to file accounts with the ROC.

Pursuant to Section 88 of the Companies Act, a company may waive the laying of accounts before the general meeting and the appointment of an auditor. The waiver requires the unanimous consent of the board of directors and members of the company.

Regulated entities are subject to additional financial reporting requirements imposed by the BMA and applicable sector-specific legislation. Insurance companies, for example, must file audited financial statements and statutory financial returns with the BMA annually.

 5.2 Corporate Governance Arrangement Disclosure

There is no general requirement under the Companies Act for companies to disclose their corporate governance arrangements. Companies listed on the BSX are subject to the disclosure requirements of the Listing Regulations, which include ongoing disclosure obligations relating to changes in the board, material related-party transactions and financial reporting.

 5.3 Incorporation and Registration

Companies in Bermuda are incorporated through the ROC. The incorporation process requires the filing of a memorandum of association and the payment of the prescribed fees. The company must confirm in its application whether it will carry out a relevant activity for the purposes of the Economic Substance Act 2018 and whether it is a Bermuda constituent entity for the purposes of the Corporate Income Tax Act 2023.

Following enactment of the BOA, the former exchange control powers of the BMA are no longer relevant to incorporation.

Key ongoing filings include:

• the annual declaration and payment of the annual government fees (Section 131);
• notification of changes to the register of directors and officers (Section 92A-B); and
• since the BOA, the filing of beneficial ownership information with the ROC.

The memorandum of association (but not the bye-laws) is a public document. The register of directors and officers and register of members are available for inspection by the public at the registered office. Financial statements do not need to be filed with the ROC and are not publicly available. The beneficial ownership register is not publicly accessible.

Failure to file can result in fines. Under Section 261 of the Companies Act, subject to following the prescribed process the ROC may strike a defunct company off the register.

 5.4 Global Anti-Money Laundering

Bermuda’s AML/ATF framework is principally contained in the Proceeds of Crime Act 1997, the Anti-Terrorism (Financial and Other Measures) Act 2004 and the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 (together, the “AML Regulations”). The Financial Intelligence Agency (FIA), established under the Financial Intelligence Agency Act 2007, is Bermuda’s financial intelligence unit.

Regulated entities (eg, banks, insurers, investment businesses, trust companies, and corporate service providers) are required to:

• establish and maintain AML/ATF compliance programmes;
• appoint a money laundering reporting officer;
• conduct customer due diligence;
• maintain records; and
• file suspicious activity reports with the FIA.

The board is responsible for commissioning and reviewing the annual AML audit under Regulation 17A and ensuring remediation of any findings. The BMA is the supervisory and enforcement authority, and is responsible as part of its regulatory function for monitoring compliance with the AML Regulations.

Directors might face personal liability for non-compliance, including criminal prosecution under the Proceeds of Crime Act 1997 (carrying imprisonment and/or fines) and regulatory enforcement by the BMA.

The BMA’s supervisory assessment of the fitness and propriety of directors of regulated entities encompasses compliance with applicable AML Regulations. The board of directors of a regulated entity is expected to have oversight of the entity’s AML/ATF compliance programmes.

 6. Audit, Risk and Internal Controls

 6.1 External Auditors

Under Section 89 of the Companies Act, every company must, at each AGM, appoint an auditor to hold office until the next AGM, unless the company has elected under Section 88 to dispense with the annual appointment of an auditor (whose election requires the unanimous consent of all members). The directors may appoint the auditor where the members fail to do so.

The auditor is required to report to the shareholders on the accounts examined by the auditor (Section 90).

Regulated entities are subject to additional auditor requirements. For example, insurance companies must appoint an approved auditor who meets the BMA’s criteria and must file a statutory financial return. The BMA has broad information-gathering powers under the Insurance Act 1978, which may extend to communications with a regulated entity’s auditor.

 6.2 Risk Management and Internal Controls

There is no specific statutory requirement under the Companies Act for the oversight of geopolitical risk, so this will be the responsibility of the board of directors.

For regulated entities, the BMA expects boards to maintain effective risk management frameworks that are proportionate to the nature, scale and complexity of the entity’s business. The BMA’s Insurance Code of Conduct, for example, requires insurers to have a risk management function and to consider all material risks, which may include geopolitical risk where relevant to the entity’s business.

Bermuda implements international sanctions through the International Sanctions Act 2003 and the International Sanctions Regulations 2013. All persons in Bermuda (including companies and their directors) are prohibited from dealing with sanctioned persons or entities, and breach may constitute a criminal offence.

 7. Environmental, Social and Governance

 7.1 ESG Requirements

Bermuda does not currently have standalone ESG reporting legislation applicable to companies generally. There is no mandatory requirement under the Companies Act for companies to report on ESG matters.

For companies listed on overseas exchanges, ESG disclosure obligations will be determined by the rules of the relevant listing venue and the securities regulation of the applicable jurisdiction – eg, Bermuda companies listed on US exchanges may be subject to SEC climate-related disclosure rules as they are finalised and implemented.

Regulated companies should consider sector-specific codes of conduct. For example, the Insurance Code of Conduct requires companies to maintain risk management frameworks that identify and manage all material risks, which includes ESG risk.

 7.2 ESG Developments

There is increasing interest in ESG issues in Bermuda, and, in this respect, to date there has been no domestic political backlash of the kind observed in other parts of the world. Bermuda’s ESG governance approach remains driven by international market expectations and BMA supervisory standards, rather than prescriptive domestic legislation.

The most significant development is the enactment of the BEA, which came into force on 1 December 2025. This Act allows companies incorporated under the Companies Act (as well as LLCs and limited partnerships) to opt in as benefit companies. A benefit company’s constitutional documents must contain a clearly stated public benefit, which means a positive effect on society or the environment. This could include artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific, sporting or technological impacts. Benefit company directors may take into account the company’s public benefit purpose alongside shareholder interests.

It is important to note that the BEA is an opt-in framework. Traditional companies that do not elect for benefit company status are not affected and are not required to pursue public benefit objectives.

The governance component has seen domestic legislative activity, including changes to the beneficial ownership regime and the prohibition of nominee directors and enhanced transparency requirements. Privacy and data protection considerations have advanced through the full implementation of the PIPA.

 8. Artificial Intelligence

 8.1 Board Oversight of AI

There are no AI-specific legal or regulatory requirements under Bermuda law relating to board oversight of AI. Bermuda has not enacted dedicated AI legislation, although the BMA’s discussion paper on The Responsible Use of Artificial Intelligence in Bermuda’s Financial Services Sector was issued in July 2025 (the “AI Discussion Paper”). The AI Discussion Paper is analysed in 8.2 AI Use-Related Risks.

The general duties of directors – including the duty of care and the duty to act in the best interests of the company – apply to decisions involving the deployment of AI systems, as they do to any other business decision. 

For regulated entities, the BMA’s existing supervisory expectations regarding risk management, internal controls and technology governance would apply to the use of AI within the regulated business.

The Digital Asset Business Act 2018 (DABA) regulates digital asset businesses in Bermuda and includes provisions on cybersecurity and technology governance that may be relevant where AI is used in the context of a digital asset business. However, DABA is not a general AI governance statute.

 8.2 AI Use-Related Risks

Bermuda does not currently have a bespoke governance framework for AI use-related risks; however, this may change following issuance of the AI Discussion Paper. 

The AI Discussion Paper proposes an outcomes-based risk management framework with ultimate accountability resting with the board, which would be consistent with general principles of corporate governance in Bermuda. Rather than prescribing specific technical implementations, the BMA’s approach focuses on the results to be achieved. The BMA states that, while the board may delegate day-to-day design, testing and monitoring, it remains accountable for establishing clear risk appetites, ensuring that governance structures include clear reporting lines, and receiving timely assurance that AI systems operate within approved parameters throughout their life cycle. The board’s accountability is described as “inalienable”, though supervision may be exercised through board committees, internal audit reviews and independent attestations.

The AI Discussion Paper proposes a risk assessment framework evaluating AI systems across five key dimensions:

• impact severity (the potential consequences of system failure on customers, business operations and the broader financial system);
• autonomy and human oversight (the degree of human involvement in decision-making, including the risk of “automation bias”);
• complexity and explainability;
• data sensitivity; and
• deployment context and scale.

Governance requirements are to be proportionate, scaled to the financial institution’s business profile, size, complexity, AI maturity and the nature of its customer relationships (retail versus institutional).

The consultation period for the AI Discussion Paper closed on 30 September 2025. In a stakeholder letter published in February 2026, the BMA confirmed that respondents broadly supported the proposed outcomes-based and principles-led approach and encouraged the BMA to integrate AI considerations within established risk management frameworks rather than creating separate AI-specific structures. The BMA confirmed its intention to maintain a technology-neutral supervisory approach. The BMA’s indicative timetable envisages a final proposal in Q3 2026.

Consequently, AI governance in Bermuda is currently addressed through the application of existing legal and regulatory frameworks:

• directors’ general fiduciary duties apply to decisions regarding AI adoption and deployment;
• PIPA applies to AI systems processing personal information and requires appropriate protective measures; and
• the BMA’s regulatory expectations regarding outsourcing, technology risk and operational resilience apply to regulated entities’ use of AI.

In practice, responsibility for AI strategy and risk management within Bermuda companies varies by entity. For larger and listed companies, AI-related risks may fall within the remit of the risk committee, the audit committee or a dedicated technology or innovation committee. For regulated entities, the BMA would expect AI-related risks to be addressed within the entity’s risk management framework and to be subject to appropriate board-level oversight.

 8.3 Liability Exposures Arising From AI Use

The principal liability exposures for boards and officers arising from AI use in Bermuda include the following.

• Data protection: breaches of PIPA arising from AI systems that process personal information improperly. The Privacy Commissioner has enforcement powers under PIPA against the organisation. Criminal offences may be pursued through the courts.
• Breach of fiduciary duty: where directors fail to exercise adequate oversight of AI deployment, resulting in loss to the company. Enforcement is by the company or by shareholders via derivative action (see 3.8 Breach of Directors’ Duties and 4.4 Shareholder Claims).
• Regulatory enforcement: for regulated entities, the BMA may take enforcement action where AI-related failures amount to breaches of regulatory requirements – eg, an industry code of conduct.
• Contractual liability: where AI systems produce erroneous outputs that result in breaches of contractual obligations.
• Reputational risk: directors’ duty of care encompasses the obligation to manage material risks, including reputational risks from AI use.

There is no AI-specific liability regime in Bermuda. Liability arising from AI use would be assessed under existing common law, statute and regulatory frameworks.

 8.4 Key Disclosure Requirements for AI Use

There are no AI-specific disclosure requirements under Bermuda law. The Companies Act does not require companies to disclose their use of AI, AI strategy, AI governance arrangements or AI-related risks in their annual reports or other filings. For companies listed on overseas exchanges, applicable securities regulation may require disclosure of material risks, which could include AI-related risks where they are material to the company’s business, operations or financial condition.

Under PIPA, organisations are required to be transparent about their use of personal information, which may extend to the use of AI systems that process personal information. However, this is a data protection disclosure obligation rather than a corporate governance or financial reporting requirement.

As per the AI Discussion Paper, Bermuda may in due course consider AI-specific disclosure requirements.