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Progressive Labour Party leader Paula Cox became the twelfth Premier of Bermuda in October 2010. Her regime, while promoting fiscal austerity, was described by one attorney as "business-friendly with an eye toward keeping pace with offshore competition"....

Progressive Labour Party leader Paula Cox became the twelfth Premier of Bermuda in October 2010. Her regime, while promoting fiscal austerity, was described by one attorney as "business-friendly with an eye toward keeping pace with offshore competition". Soon after she was elected, Cox announced that the Exempted Tax Certificate (ETC) policy would be extended to 2035, and legislation was passed five months later. The ETC, which was due to expire in 2016, exempts international businesses from paying local corporation taxes. "We've been clamouring for this for a long time," comments one attorney.

Although lawyers describe business as "touch-and-go" and "patchy," there is an air of optimism based on a number of auspicious indications. These include increased lending by international banks to Bermuda companies, the return of the Bermuda IPO, and a rise in restructurings of non-US holdings by US-based multi-nationals using Bermuda entities. "For a long time there wasn't any financial activity because of skittishness," says one attorney. "In 2011, there were two or three pretty large bank financings made to Bermuda companies, so there's been a return to lending, which has affected our business."

Lawyers were particularly excited about the return of the Bermuda IPO, which indicates increased confidence in the jurisdiction and has led to an increase in work. "We're encouraged to see rather big-ticket, large transactions," notes one partner.

Another attorney feels that the spate of world calamities has piqued an interest in insurance company start-ups, especially by US-based private equity firms. Bermuda is particularly appealing for this purpose because of the speed with which a company can be licensed, up and running – estimated at roughly one month. The Bermuda Monetary Authority (BMA) reports that the insurance sector "continued to record impressive results" in 2010, and that 35 new insurers were registered. Another partner notes that reinsurance regulations are changing to keep pace with international standards, mirroring European regulatory requirements. "There is a much more detailed look at the entire process, reanalysing how regulators evaluate the risk profile within industries," he says.

Toward the end of the 2010, Bermuda amended its Investment Funds Act of 2006 to require fund administrators to appoint at least two people to direct their business. The amendment also mandated that shareholders notify the BMA of new or increased control.

Further bolstering its commitment to international standards of transparency, Bermuda has signed Tax Information Exchange Agreements (TIEAs) with 24 countries – double the amount required to obtain the Organisation for Economic Cooperation and Development's (OECD) White List status. These include TIEAs signed with Canada in June 2010, and China in December 2010.

"We're excited about the TIEA with Canada in particular, because Canadian companies have so much business outside of their jurisdiction," says one partner. "We're hoping they'll use our jurisdiction instead of Barbados." In another coup for the territory, Bermuda was selected to host the OECD's Global Forum on Transparency and Exchange of Information for Tax Information in 2011.