Bermuda is to open an office in Brussels to protect the island’s interests as Britain prepares to leave the European Union.
David Burt, Premier and Minister of Finance, said the office would cut the cost of consultants in Europe.
He said in his Budget Statement on Friday: “Efforts to protect and strengthen the economy will require increased resources to be allocated to external affairs.
“With increased pressures from Europe owing to the EU review of non-cooperative tax jurisdictions together with Brexit, it is necessary for Bermuda to increase its engagement with the European Union and member-state governments.”
The office would fall under the Cabinet Office’s budget, which was increased by $748,000.
The bulk of that rise was listed as going towards the Government’s London and Washington offices.
The London Office will see its budget increase by $403,000, a 39 per cent rise.
The Washington DC office will have its budget almost doubled with an additional $194,000 — a 94 per cent increase.
Mr Burt said the island is not on the recently published list of non-cooperative jurisdictions, but the EU Code of Conduct Group has expressed concerns about the island.
He said: “Since December, the Government has been meeting with various local stakeholders and is in the process of formulating a response to address the European Council’s concerns.
“It is the Government’s view that the mischief that the EU is trying to cure — tax leakage from companies operating in their jurisdictions — has largely been mitigated by advances in international tax transparency and regimes.”
Mr Burt added recent tax changes in the US were the “most pressing threat” to the island’s international business sector.
He said: “Although the tax changes were not directly targeted at Bermuda, many of Bermuda’s international companies have had to make quick adjustments to their operations to avoid an additional tax burden.”
Mr Burt said the Government has continued to work with the Association of Bermuda Insurers and Reinsurers to protect Bermuda’s interests.
He added: “Although we feared the worst, the resulting tax changes will not be fatal to our insurance industry and may present some opportunities for growth due to the superior regulatory advantages for companies operating from Bermuda.
“Recently, the minister responsible for immigration met with the leadership of Abir and made it clear that the Government will facilitate any transfer of jobs to Bermuda that may result from any restructuring caused by the US tax reform.
“Any transfer of jobs to Bermuda will create additional opportunities for Bermudians, and this government is committed to preparing Bermudians to take advantage of those opportunities.”
The Premier said the Government has remained focused on the island’s upcoming assessment by the Caribbean Financial Action Task Force.
Mr Burt said the assessment is vital as a poor report card could harm the local economy.
He said: “Other countries that have not done well have seen correspondent banking relationships disappear. If this were to happen in Bermuda, it would pose a critical threat to our financial services industry.
“The full resources of the Government have been marshalled to ensure that Bermuda is prepared for the assessment and we will continue to work with the Bermuda Monetary Authority and our industry partners.”