Economic Substance Update: Compliance Reviews, Proposed Penalties And Filing Declaration Preparations

• Published date: 03 June 2022
• Subject Matter: Corporate/Commercial Law, Compliance, Corporate and Company Law
• Law Firm: Appleby
• Author: Ms Sally Penrose and John S Wasty

On 16 May 2022, Bermuda's Registrar of Companies (Registrar) announced that reviews of Bermuda entities' economic substance compliance would commence immediately.

In order for the Registrar to demonstrate the effectiveness of its supervisory framework, it will undertake both desktop and on-site audits of Bermuda entities.

This announcement follows the Registrar's recent non-compliance actions in March and April 2022 with respect to economic substance for the 2019 and 2020 financial periods. Proposed penalties for non-compliance for these periods ranged from $7,500 to $100,000 (per offending entity).

If a Bermuda entity receives a compliance review notification from the Registrar, Appleby's experienced and dedicated regulatory team is ready to assist with any preparation requirements.

If a Bermuda entity is part of a compliance investigation, Appleby's regulatory team has the expertise to provide guidance through any potential enforcement action...