Trust Bermuda!Bermuda International

Business AssociationNew York

30 September 2009

Disclaimer

• Complex subject matter• Review with professional advisors• Assume no responsibility

Agenda:

• Introduction• SWOT

– Strengths - Why Bermuda?– Weakness – Reasons not to use Bermuda– Opportunities – What structures are being

created? – Threats – What can go wrong?

Rajah Abusrewil, BA (Hons), PgDL, LPC

Areas of Practice• Trust Drafting & Creation• Asset Protection• Private and Commercial Trust Structures• Private Trust Companies

Professional• Bermuda Bar Association (Called 2009)• Law Society of England and Wales (Called 2005) • Society of Trust & Estate Practioners – Junior Member

Randall J Krebs, Head of Private Client & Trusts (Bermuda)AREAS OF PRACTICE• specialises in advising on trust matters in a commercial

and private client setting

EDUCATION• Bachelor of Commerce, 1982• Bachelor of Laws, 1985

ADMISSIONS/MEMBERSHIPS• Law Society of Alberta, 1986• Law Society of Upper Canada (Ontario), 1990• Bermuda Bar Association, 2005• Trade-mark Agent• Canadian Tax Foundation• Society of Trust and Estate Practitioners (STEP)

Ronald’s group acts as trustee for pension plan trusts, insurance trusts, investment trusts and escrow arrangements.

Ronald Schmalcel was the Deputy Head of Trust and Fiduciary Services for SG Hambros (Bahamas) Limited prior to moving to Butterfield Trust in 2008. Ronald was Head of Risk Management, Processes and Training with UBS Trustees (Bahamas) Limited from 2003-2007.

Ronald holds a Bachelor of Laws Degree from Osgoode Hall Law School and practiced tax law and estate planning in Canada for approximately 12 years before working in the offshore fiduciary services business.

Ronald Schmalcel Vice President, Head of Corporate Trust

DAVID A. SUSSMAN B.A., LL.B., M.B.A., TEP

• Over 20 years experience in international financial services

• A qualified lawyer in Ontario, Canada and Bermuda he has lived and worked in 5 countries

• Developed and executed strategy in increasingly senior positions at several of the world’s premier banks and trust companies.

TRUST BERMUDA

STRENGTHS

Rajah Abusrewil

WHY BERMUDA?

• UK Overseas Dependant Territory

• Basis in UK law

• Politically Stable

• Attractive position between Europe and North America

KNOWLEDGE & UNDERSTANDING

• Bermuda has a strong tradition in the use, understanding and administration of trusts.

• The Judiciary in Bermuda is solid, reliable and understands the role of Trusts in the personal and professional world.

LEADER IN TRUST INNOVATION

• First jurisdiction to introduce Purpose Trusts (1989)

• First jurisdiction to introduce PTC legislation (2001)– now Bermuda is very clearly largest PTC jurisdiction in world

• Other jurisdictions follow Bermuda – which should speak volumes.

NOT A FOLLOWER OF FAD TRENDS!

• Vista trusts or Star trusts have not been implemented

• They are often not considered as valid trusts.

PEOPLE

• Bermuda has been successful at importing and training talented professionals.

• Lawyers, Accountants and Trust Professionals trained around the world bring with them their high standards and practices.

• There is a variety of providers for Companies to be able to select the best fit.

• Bermuda continues to only accept a very high caliber of professionals and experts in the trust field

KNOW YOUR CLIENT

• Bermuda has always adhered to stringent Know Your Client procedures, even when it was not fashionable to do so.

• Other jurisdictions have had to raise their own standards (and costs) to meet these high KYC standards already in place in Bermuda.

• Bermuda has been placed firmly on the OECD White List which further confirms these excellent standards.

BERMUDA QUALITY

• Country• Legal System• Trust Administration• Professionals

Weaknesses?

Misinformation about Bermuda

Difficult to Deal With

• Bermuda Monetary Authority• KYC• Only 2 ‘real’ Banks• Limited Number of Trust Companies

Expensive

• Exclusive Club - Rich and Famous Only

No Bells and Whistles

• Nothing Fancy– No VISTA Trusts– No STAR Trust– No Foundations

• No Aggressive Asset Protection Trusts– Cook Islands, Nevis, Bahamas

No Bank Secrecy, TIEAs

• International Cooperation (Tax Information Exchange Agreements) Act 2005

• Switzerland – Banking Law of 1934• Cayman – Confidential Relationships

(Preservation) Law

Ronald Schmalcel LL.B., TEP

Opportunities

Bermuda - Opportunities

Private TrustsTax Information Exchange AgreementsPension and Employee Benefit Trusts

Private Trust Companies

•Solution for Wealthy Individuals and Families who want to have more control over their Wealth Management•Bermuda pioneered Private Trust Companies•Strong infrastructure of professionals necessary to support PTCs

Tax Information Exchange Agreements

Bermuda has signed TIEAs with United States Germany FaroesUnited Kingdom Netherlands FinlandIreland Denmark IcelandAustralia Sweden GreenlandNew Zealand Norway

Bermuda has concluded negotiations withCanadaMexicoJapan

Tax Information Exchange Agreements

•Opens door to business•Opens door to tax planning •Lends security that tax plans will have intended consequences•Bermuda the first to be placed on OECD white list

Pension and Employee Benefit Trusts

•Major service providers such as AIG and HSBC have moved out of the business•Bermuda has regulatory regime that offshore plans can opt into•Robust supervision of pension plans

“Threats”

David A. SussmanCodan Trust Company Limited

Codan Trust Company Limited is the independent trust affiliate of Conyers Dill & Pearman, one of the world’s leading international offshore law firms.

Economic Crisis

• Global Recession

• Slowdown in Wealth Creation

• Declining Importance of US/UK in the Global Economy

Supra-National Initiatives

• FATF / OECD / G-20 / US Senate Permanent Sub-Committee etc.

• Enhanced Scrutiny by Developed Economies

Regulation

• Local and Global

• Increasingly Complex and Demanding

• Erosion of Traditional Competitive Advantages

Maturing Traditional Markets

• International Private Client Market

• Distance to Growth Markets (BRIC etc.)

• Access to Growth Markets (HK etc.)

Competition

• Increasing Sophistication of IFC’s

• Increasing Bureaucracy

• Cost of Doing Business

Questions & Discussion