Bermuda Signs a Double Taxation Agreement with the Kingdom of Bahrain

HAMILTON, Bermuda--(Business Wire)--
Bermuda today signed a Double Taxation Agreement (DTA) with the Kingdom of
Bahrain. The signing of the agreement took place at a ceremony in Washington,
D.C. and was attended by Senator the Honourable Lieutenant Colonel David A.
Burch, OBE (MIL), ED, JP, Minister of Labour, Home Affairs and Housing, and H.E.
Shaikh Ahmed bin Mohammed Al-Khalifa, Minister of Finance, who signed the
agreement for the Kingdom of Bahrain.

This double taxation agreement marks the first full DTA signed by Bermuda. It
includes a provision for the full exchange of information on criminal and civil
tax matters between Bermuda and the Kingdom of Bahrain, consistent with the
internationally agreed standard for transparency and exchange of information for
tax purposes set by the Organization for Economic Cooperation and Development
(OECD).

The DTA marks Bermuda's 20th agreement incorporating provisions for the full
exchange of information on criminal and civil tax matters. The DTA is a
reciprocal arrangement between the Kingdom of Bahrain and Bermuda not to tax the
repatriated income that a firm or a national of the parties domiciled in one
country earned in (and paid taxes on) the other country.

Following the signing, the Hon. Paula A. Cox, JP, MP, who had to remain in
Bermuda as Acting Premier, commented on Bermuda positioning itself as a key
jurisdiction for Islamic financial product offerings. Acting Premier Cox Stated:
"I am delighted today for Bermuda to sign this Double Taxation Agreement with
the Kingdom of Bahrain and to mutually commit for us to work together to develop
a multi-faceted relationship that will benefit every Ministry of our respective
governments and thereby the people of Bermuda as well. The opportunities before
us jointly are numerous and Bermuda and Bahrain have committed to establish a
Joint Economic Committee that will meet annually to further develop economic
ties between our countries."

"This DTA is a significant step forward in enhancing business ties and
investment opportunities between Bermuda and the Kingdom of Bahrain that will
facilitate our outreach to other countries within the Gulf Cooperation Council
(GCC). Currently, there are at least three Bermudian entities with a Bahrain
interest, and we expect this number to grow significantly in the coming years.
Indeed, we are seeing an increase in local service providers expanding their
offerings to Middle East and North African markets utilizing the Kingdom of
Bahrain as a gateway jurisdiction, in addition to offering Middle Eastern
clients convenient access to Bermuda. Many local service providers have
extensive experience of Islamic structured finance, including both conventional
and Shari'iah investment funds. Moreover, it is likely that the global market
for Islamic insurance, or Takaful, will continue to grow, opening exciting
possibilities for Bermuda reinsurers."

Mr. David Ezekiel, Chairman of the Association of Bermuda Insurance Companies
(ABIC) stated: "Coming just after the conclusion of TIEA negotiations with
India, this DTA with Bahrain is further good news for the Bermuda international
business sector as Bahrain has a growing involvement in our market. Bahrain is
emerging as a strong economic force in the Gulf region and already has
significant dealings in the Bermuda market and the signing of the DTA will
enhance current relationships and should make Bermuda even more attractive as a
business partner for individuals and companies located in Bahrain. The Ministry
is to be congratulated on maintaining the momentum in the signing of these
international agreements with our current and prospective business partners."

In addition to the DTA with the Kingdom of Bahrain, Bermuda has tax information
exchange agreements with Australia, Ireland, New Zealand, the Netherlands, the
Nordic Group (including Denmark, Finland, Iceland, Norway and Sweden and their
associated territories the Faroe Islands and Greenland), Netherlands Antilles
and Aruba, Mexico and Japan. Negotiations have been concluded with, among
others, Canada, Spain, Belgium and Portugal, with these agreements.

Bermuda's information exchange provisions within its DTA with the Kingdom of
Bahrain includes all standard means to ensure due process is followed in tax
information requests to Bermuda, including, for example, provisions to protect
the confidentiality of information provided, as well as adhering to public
policy, provisions related to protecting legal privilege, and anti-fishing
provisions to ensure that requests for information from Bahrain are relevant to
on-going tax investigations being conducted by Bahrain's authorities.

Ministry of Finance
Laura Semos
Treaty Advisor, 441-297-7514
ljsemos@gov.bm
or
Media Inquiries:
Marston Webb International
Victor Webb, 212-684-6601
marwebint@cs.com

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