Only two hours by airplane from New York City financial markets and supported by a favorable tax system and a responsive business regulatory tradition, Bermuda has built a large and thriving service-based economy providing key economic capacities. Bermudian holding companies, insurance firms, banks and international investment companies concentrate on meeting the economic needs of the US economy. Today, however, the US-Bermuda economic relationship is evolving rapidly and the Bermuda Business is turning its significant business acumen to provide a global platform to do business with Asia and the Middle East as well as keeping close ties with the US and Europe.

Bermuda is a substantial economic presence in the US providing needed international capital and other critical economic services. A recent study conducted by Charles M. Ludolph, a recognised expert and published author on international business and economics, and Senior Vice President of Albright Stonebridge Group, a global strategy firm, reported that in 2009, Bermuda’s annual two-way trade and direct investment relationship with the US was more than $65bn and ranks as one of the top global trading partners with the US. Bermuda’s manufacturing holding companies manage assets in the US that sustain 130,000 employees annually.

Moreover, the study shows that Bermuda was a key economic partner with the US throughout the recent economic crisis helping restructuring and adding liquidity to the US capital markets. Trade in business and professional services doubled during the crisis to $3bn. Bermuda investment companies provided more than $200bn of international funds to US equity and debt markets.

While in the past, Bermuda competed with London, New York and Zurich financial centres for global business, today those financial centres are expanding their business presence in Bermuda to specialise and focus their access into the US market. In the last two years, some Bermudian firms have relocated to Europe to be more competitive in EU markets. The economic study noted above shows that in the last five years, major European financial centres expanded their two-way trade in financial services with Bermuda by $12-20bn annually. Moreover, Asian investors have increased their investment presence in Bermuda holding companies that specialise in doing business in US semiconductor and technology markets.

Bermuda’s advantages are based on a unique set of strategic characteristics that include proximity to US capital market; laws and regulations compatible with the US and the G20; and extensive regulatory cooperation with the US from finance to shipping as well as a sustained high level of regulatory quality.

Bermuda’s long interdependence with the US and the United Kingdom gives it both economic and political stability that attracts business interests seeking an international business platform allowing easy mobility of portfolio and capital investment. Bermuda’s financial regulatory bodies and the Bermudian government moved quickly in response to the 2007 and 2008 global financial crisis to reassure foreign investors and their governments that regulatory standards were stable and transparent. Domestic financial oversight were adjusted to reflect international Basel II standards as well as EU Solvency II standards and rules.

Bermuda is known in the United States and the rest of the world for its responsible tax administration. Today, Bermuda has formalised Tax Information Exchange Agreements (TIEA) with nineteen countries, including the US, United Kingdom, Germany, France, Japan and India. Moreover, Bermuda has also concluded TIEA negotiations with Canada and others. As such, Bermuda complies with the standards of the G20 Tax Initiative and OECD standards, where as a member of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, Bermuda will host the Forum in 2011 for the first complete review of standards in tax transparency among members.

The Bermuda business community and Bermudian government provide a prodigious infrastructure to meet the economic needs of the US and adept at meeting its business needs from making up capital shortages in farm insurance to providing shipping services for the Gulf of Mexico. Along the way, Bermuda has built a global reputation as an international gateway to the economy of the United States.