Addressing a breakfast event hosted by the Bermuda branch of the Alternative Investment Managers Association, the Premier, who also holds the position of Minister of Finance, said too much money earned on the island ended up overseas, and the Government wanted to see more of it staying in the local economy.
Burt declared that changes were needed to stimulate growth and the Government was prepared to “touch some sacred cows” to achieve its goals.
The Bermuda Premier told his audience that “The challenge that we have in Bermuda is that we have a lot of money coming in and, unfortunately, a lot of that money leaves.
“The easiest way to tackle that problem of getting more money circulating in our economy is figuring out how to keep more of the money that’s earned here inside our economy.
“That means we have to create more avenues for investment inside the economy, but the truth is that not all of that investment is going to come from people who have Bermuda status.
“And so there will be revisions to the 60:40 rule because it is an inhibitor to keeping more money in the Bermuda economy.”
He said PRCs had the right to live and work in Bermuda, but their opportunities to invest were restricted.
The 60:40 rule puts a limit on foreign ownership of most Bermudian businesses to ensure they remain under island control.
Exceptions include exempt companies and, under an amendment to the Companies Act made in 2012, publicly traded companies in “prescribed industries”, which can apply for 60:40 rule relief.
Mr Burt said indicated that more details of his proposal will be unveiled in his Budget statement on February 16.
The Premier lamented that “I’ve had meetings with the Financial Policy Council. One of the statistics that came out was that of all of the money earned in Bermuda, between $3 billion and $8 billion over the last ten years has left Bermuda’s economy.”
Mr Burt said retention of some of that money in the domestic economy was “low-hanging fruit” that could help to address the island’s problems.
He added: “One of the inhibitors to that money staying here is that some people who earn money in Bermuda cannot fully invest in Bermuda and that is the problem we’re trying to solve.”
Mr Burt made clear there would be strings attached to any changes to the 60-40 rule to ensure Bermudians benefited from extra investment.
He said: “When we structure policies to touch some of those sacred cows, we will structure them to ensure that the growth that we expect to result will flow to the entire economy and not just to the ‘haves’.”
Mr Burt added Bermuda could not be “a place where people can set up and make money, while Bermudians were stuck on the side looking at it”, and that local involvement was important.
He said: “You can own 100 per cent of a $50,000 business or 40 per cent of a million-dollar business — clearly most people would prefer the latter.
“So it’s about structuring it, so that any changes require local participation of those people who have been left behind, so they not only get additional wealth creation, but also exposure to owning, running and being part of a business.”
- Countries: Bermuda