The economy of Bermuda is flourishing. As far as the gross national income is concerned, it is rated number 1 by the World Bank. International Business Center is its money supplier. Though Bermuda’s economy has no oil, gas, or heavy industries the island is a well-known tourist resort. The main advantage of doing business in Bermuda is that no taxes are charged for business activities.
Bermuda is mainly a tourist and business-oriented destination. Its main income comes from the tourist industry. Agriculture and industrialization are not possible due to the lack of suitable land. Most of the food products are imported. The government is trying to strengthen the tourist and financial sectors of the Bermuda economy.
After World War II, Bermuda slowly developed its economic condition. Bermuda has more than 12,500 foreign companies and these companies are the main source of foreign exchange. The dollar is the unit of currency in Bermuda.
Every year more than 400,000 tourists visit the island and they are mostly from America. Bermuda’s economy began to develop in the 1950s. The government took major decisions for the incoming business activities and it also kept the foreign banks from intervening. The Bermuda Monetary Authority looks after the financial sectors. Its insurance sector is also growing fast and soon will reach the top.
Currency of Bermuda
The official currency of Bermuda is the Bermudian dollar (BMD). It is normally abbreviated with the dollar sign $ or, alternatively, BD$ to differentiate it from other dollar-denominated currencies. It is subdivided into 100 cents. The Bermudian dollar is not normally traded outside of Bermuda.
Stock Exchange of Bermuda
Bermuda Stock Exchange (BSX) is a fully electronic offshore open securities market that became functional in 1971. Originally owned by 3 Bermuda Banking institutions, Bermuda Stock Exchange has the facility of daily trading and centralized settlements. Trading membership for international brokers is also available if BSX requirements are fulfilled.
Stock Exchange in Bermuda handles the listing, depository receipt program, and trading of capital market instruments. A completely automated unit, Bermuda electronic securities trading (BEST) handles trading in BSX. Once implemented the information is disseminated worldwide. Another important feature of Bermuda stock is their light and effective method of regulation which leads to their ultimate success. Bermuda Exchange even allows non-united state investors to trade in fund shares 22×6 a month. Crossing, a type of transaction is now over $ 7 million monthly in BSX.
Bermuda Stock Exchange is a self-regulatory organization that has the honor of being the first offshore exchange to receive designated status from the US SEC. BSX earned designated investment exchange status in 2005 by UK Financial service authority. Recent activities of the Stock exchange in the Global stock exchange industry ensured gains in terms of official recognition for the Bermuda stock exchange. In 2005, Australia’s foreign investment fund taxation rules granted BSX, approved stock exchange status. Bermuda Stock Exchange published its daily deals and fund prices in Reuters and Bloomberg.
Bermuda exchange opens 90 minutes prior to New York and remains open long after New York closes and hence enabling trading outside normal Wall Street hours. Courtesy Bermuda Stock Exchange, Bermuda is emerging as a true global offshore financial center.
Bank of Bermuda
Established in 1889, the Bank of Bermuda features among the major financial services organizations of the world. It has its headquarters in Hamilton. Since its inception, the Bank of Bermuda has grown steadily with overseas branches spreading in 17 cardinal financial centers. Bahrain, London, Japan, Cayman Islands, Cook Islands, Hong Kong, Dublin, Jersey, New York, Guernsey, Isle of Man, South Africa, Switzerland, Luxembourg, Singapore, and New Zealand have branches of the Bank of Bermuda.
In February 2004, the Bank of Bermuda became a member of HSBC Group’s Network. The primary services provided by the Bank of Bermuda include trust custody, fund administration, asset management, and banking services for both individuals and organizations.
Industries in Bermuda
Tourism and International business are the two most important revenue-earning Bermudian Industries. The industrial sector of Bermuda is small. However, Bermuda enjoys a very high per capita income. Bermuda Industries, besides tourism and international business also includes construction.
The tourism industry in Bermuda contributes a huge amount to the Gross Domestic Product of Bermuda. The Bermuda tourism industry mainly derives its business from tourists from North America. However, the tourism industry is gradually narrowing down while the financial service sector is growing steadily and strongly.
Providing financial services to international overseas organizations heads the list among the industries of Bermuda in generating the bulk of the revenue. The international business received a further impetus after the September 11 attacks. Quite a few reinsurance companies were set up in Bermuda in the following period. It is often said that the reason for the flourishing financial service-oriented international business in Bermuda, is the tax benefits the country offers.
The Non-availability of arable land in the Bermuda Islands has resulted in a very low agricultural output. The main agricultural products are bananas, flowers, honey, citrus, and dairy products. Most of the food items are primarily imported. Heavy industries do not feature among Bermuda industries because of the lack of natural resources in Bermuda. Gas and oil are not available in this island country.