Bermuda’s term limit outlined

Will stay the course like Cayman

Key differences between the Cayman Islands and Bermuda with regard to term limits on expatriate workers were outlined during the Fidelity Cayman Business Outlook last week.

Despite the differences, speaker Robert Horton, Bermuda’s permanent secretary within the Ministry of Labour and Immigration, outlined several similarities in the two countries with regard to term limits, especially when it came criticism from some quarters of society about the policy and the Government’s resolve to stay the course.

‘The issue of the term limit, or rollover policy as you fashion it here, is extremely topical, and it is no less topical in Bermuda,’ he said.

Perhaps the biggest difference is outlined in the fallacy of Cayman residents calling the term limit the rollover policy.

‘Term limits are a policy, not legislation,’ said Mr. Horton of the nature of the restriction, which is six years in Bermuda instead of the seven in Cayman.

The policy was first announced in Bermuda six years ago in 2001. However, the impact of the policy will not be felt until this year as the policy kicks in on 1 April. Any foreigner who does not have an exemption from the term limit policy at that point and who has been in Bermuda six years or more will have to leave that country on the expiration of their work permit.

Like in Cayman, the policy has created controversy in Bermuda, as did the decision to grant security of tenure to about 2,000 people who had lived in that country for at least 20 years by 1998.

Bermuda has an estimated population of more than 65,000 and a land mass of only 20.75 square miles, making it one of the densest populations per square mile in the world.

Not every expatriate will have to leave Bermuda after six years. Some foreigners, if there is a genuine and compelling need can get a ministerial exemption, which will allow them to extend their stay to nine years. This provision is similar to Cayman’s key employee status, which allows an expatriate to extend their stay from seven to nine years here.

The criteria for such exemptions in Bermuda are similar to the criteria for key employees in Cayman. Mr. Horton said those criteria include being someone about whom it can be argued is one of the best practitioners in the world at what he does; a person who has a rare speciality that cannot be easily found; that there is a noted severe shortage in Bermuda of a field that is not particularly specialised; that without the continued presence of an individual, it would be damaging to a business or to the community in general; or that the person is directly responsible for training Bermudians to worthwhile careers.

Mr. Horton said there is also a ‘key person carve out’ of expatriates who are automatically not subject to any sort of term limit. This carve out includes both professions and positions of certain industries.

The professions include actuaries; chartered accountants; insurance brokers; butchers; chefs; registered nurses; senior insurance analysts; senior IT engineers; and specialised attorneys. Also exempt from the term limit policy are the top officers of major companies, such as the managing director, general manager and director of purchasing for any of Bermuda’s hotels.

Even with the exemptions and key employee status, most of the 8,000 work permit holders in Bermuda will have a six year term limit, Mr. Horton said.

In Bermuda, work permit holders subject to term limits must leave for a period of two years before they can return. Cayman just amended its law so that expatriates only have to leave for one year.

Mr. Horton said Bermuda would consider lowering the minimum time an expatriate had to be away, but only if the Government was convinced one year would hold up as a legal break in stay.

Employers and work permit holders in Bermuda are expected to learn this week if their applications for exempted or key employee status will be granted.

While the Bermuda Government knows the term limit policy will curb the number of long-term residents, it does not know what other impacts it might have.

‘Specific outcomes cannot be known,’ Mr. Horton said.

‘Critics say it could lead to a mass exodus of work permit holders in 2007. The Bermuda Government rejects this.’

Mr. Horton said the Bermuda Government was committed to not disrupting the mutually beneficial relationship it has with businesses in the community and country.

‘The Government must strike a satisfactory balance to the legitimate needs and expectations of Bermudians and the current needs of the business community,’ he said, noting however, that it would be ‘irresponsible at best to allow unlimited growth’ in the population .

Bermuda’s term limit policy got an endorsement from Standard & Poor, the renowned credit analysts.

Mr. Horton told of a recent positive S&P report on Bermuda.

‘The positive outlook reflects Standard & Poor’s expectation that sound policy management will continue to support the expansion of the international business sector,’ Mr. Horton read from credit analyst Lisa Schineller’s report.

‘Additional signs of pragmatic policies as the general elections – due in August 2008 – approach, in terms of fiscal performance, and implementation of term limits for non-resident work visas effective April 2007, would support creditworthiness.’