Bermuda government to lift 60/40 restrictions for several sectors

By added on 21/03/2012

Government intends to lift the 60/40 restriction on publicly traded companies across several sectors, Business Development and Tourism Minister Wayne Furbert announced yesterday, reports the Royal Gazette.

During the Budget debate on his department, Mr Furbert told MPs in the House of Assembly that a number of “targeted sectors” would be exempted from the rule which requires at least 60 per cent Bermudian ownership.

He added that the 60/40 rule restriction was negatively impacting the Bermuda economy.

The easing of the restrictions will make it easier for BSX-listed companies such as KeyTech, BF&M Ltd, Argus Group Holdings to raise capital, by giving them unrestricted access to foreign investors.

Government will make amendments to the Companies Act 1981 ”which will allow relief from the foreign investment restrictions to be automatic upon the subject company on a recognised or appointed exchange which will include the Bermuda Stock Exchange”, Mr Furbert said.

“These companies would be targeted sectors such as telecommunications, energy production, insurance, green initiatives to do with energy, banking, hotel development, general technological advancement, airline and shipping, to be exempted from the 60/40 restriction.

“We will add other sectors when the need arises.”

Mr Furbert appeared to suggest that the 60/40 rule had outlived its original purpose in some sectors at least.

“In the past this approach has supported the accumulation of wealth within certain segments of the Bermudian economy, when sufficient Bermudian investment could be obtained,” he said.

“This restriction is now having a negative impact on the growth and reinvigoration of the Bermudian economy.”