EIC Policy Changes may lead to Revival of Bermuda’s Condo Market

EIC Policy Changes may lead to Revival of Bermuda’s Condo Market

Whilst lawyers and accountants swiftly took to their spreadsheets to re-calculate various fees and stamp duties following a number of increases announced with this year’s budget, the real estate community – both agents and legal practitioners, welcomed a positive amendment to the Economic Investment Certificate (“EIC”) policy, scheduled to take effect from the 1^st April 2023.

The EIC policy was introduced in February 2021 as a way to attract overseas investors by enabling them to obtain an EIC following an investment of $2.5 million in Bermuda. The investment can take various forms, such as purchasing a property, investing in a Bermuda company, or donating to a Bermuda charity, as long as the total investment equals $2.5 million in a Bermuda entity.

Currently, the EIC policy allows successful applicants to obtain an EIC for a five-year period, which provides the right to reside, seek employment, and work in any business the applicant may have invested in. After five years, the EIC holder is eligible to apply for a Residential Certificate (“RC”), which allows the holder, their spouse, and dependents to reside in Bermuda indefinitely.

While the EIC policy has resulted in an injection of funds into Bermuda from successful overseas applicants, it had a negative impact on the local condominium market.

Pursuant to the provisions of S92(2)(b) Bermuda Immigration and Protection Act 1956 (as amended) a non-Bermudian wishing to purchase a condominium in Bermuda can only do so if they are in possession of either a Permanent Residents Certificate or a Residential Certificate.  Prior to the policy’s introduction, a non-Bermudian interested in purchasing a condominium in Bermuda, and who was not in possession of a Permanent Residents Certificate,  could apply for a Residential Certificate at the same time as submitting an application for a license to acquire land, following exchange of contracts.

However, with the introduction of the EIC policy, a Residential Certificate can now only be obtained through the EIC process and after a period of five years. This drastically reduced the number of Residential Certificates that could be issued and prohibited the sale of condominiums to non-Bermudian purchasers who are not in possession of a Permanent Residents Certificate.

The Bermuda Government has recently revised the 2021 Economic Investment Certificate and Residential Certificate Policy. The new policy allows the Minister to grant a Residential Certificate without the need to wait five years after an EIC has been granted.

From the perspective of the real estate community, this is a welcome step forward in opening up the condominium market to EIC holders who may have an interest in including a condominium in Bermuda as part of their investment package to meet the EIC requirements. While this does not make the condominium market available to all non-Bermudians, it is certainly a positive development for those interested in investing in Bermuda.

Minister Jason Hayward, the Economy and Labour Minister, has stated that the revised policy aims to increase and sustain economic activity and create jobs in Bermuda. The real estate community and conveyancing bar have welcomed the change, and we eagerly await further updates from the Ministry of Economy and Labour.