Tim Faries, a partner at Appleby Bermuda, told Captive International that bilateral tax agreements could be the key to attracting Latin American captive owners to the Island.
Faries said: “the Bermuda government has been very active in seeking to establish bilateral recognition. The path that we’ve been using for the last number of years is through tax exchange agreements. This helps slay some of the myths about Bermuda which have sometimes driven foreign governments’ policy or their attitude towards the jurisdiction.”
According to Faries, the more transparency the better as far as Latin American companies are concerned. “The businesses that have interfaced with us are very concerned about their reputation. Let’s face it—they’re coming from countries that maybe don’t necessarily enjoy the best reputation on a global stage, so it’s that much more important in their corporate culture that they only be doing activities in jurisdictions with the highest quality reputation.”
Tax transparency agreements have already done considerable good for Bermuda’s reputation in Latin America, which could be the future of the domicile in the face of changes which have seen US companies increasingly choose to establish their captives onshore. A tax agreement passed in 2012 with Mexico removed the Island from a blacklist and allowed Mexican corporations to remit payments to Bermudian companies without having high withholdings. Faries said: “where there are barriers Bermuda is looking to break them."
Appleby, Latin America, Bermuda, captive insurance, tax