Offshore Company Logo

Establishes Offshore Corporations, LLCs, Trusts, and Bank Accounts · Since 1906

Bermuda SAC – Segregated Accounts Company

Bermuda flag

A Bermuda Segregated Accounts Company (SAC) can legally segregate assets and liabilities in separate accounts. For many years, the Bermuda legislature granted individual petitioners the right to operate “segregated accounts” or “separate accounts” under what was known as a “Private Act”. Increased petitions forced the legislature to enact the Segregated Accounts Companies Act of 2000 (“SAC Act”). This law allows companies to segregate accounts at any time without petitioning the legislature for a new Private Act. Now companies can register as a SAC with the right to set up separate accounts from each other.

Each segregated account can have its own assets and do not come under the ownership or control of the other accounts. The Act protects each segregated account from the liabilities of the general shareholders and their creditors. The assets of the SAC’s general account are only available to pay the liabilities of the SAC general account and not any of the segregated accounts.

Segregated accounts are not separate legal entities. The Act considers these separate accounts to be part of the same company. However, every segregated account is treated like a subsidiary of the parent company.

Uses for a SAC
SAC’s had their origin with the insurance industry where each policyholder had its own separate account. Insurance companies also were able to separate their reserves among their different insurance products like disability and life insurance products.

The investment funds industry finds SAC’s very useful for assets managers to set up master-feed fund platforms and structures with multiple classes of shares. In addition, a SAC can be used for different investors or different investment strategies.

Holding companies find SAC’s useful when holding numerous assets where each asset can have its own separate account. Asset management firms can separate accounts by client, assets, or other criteria. Companies with different products or ventures can create separate accounts for each one in order to streamline their administration.

These are just a few examples of how a SAC can be used. Every segregated account can be tailor made to fit the investor’s and account owner’s needs.

Bermuda is located in the North Atlantic Ocean and is a British Overseas Territory. Its political system is a parliamentary dependency under constitutional monarchy with England’s Queen Elizabeth II as its monarch. It elects a two house parliament.


A Bermuda Segregated Accounts Company (SAC) can enjoy the following benefits:
No Taxation: There are no corporate, income, capital gains, inheritance, estate, stamp duty, or withholding taxes in Bermuda.
100% Foreign Owners: Foreigners can own a SAC 100%.
Flexibility: SAC’s can segregate assets into separate accounts for different clients, types of business or different kinds of assets.
Protection of Owners: The law protects owners and requires a special representative to ensure owner’s rights are protected.
Privacy: Owners’ names are never included in the public records.
No Required Audits: The government does not require filing financial statement nor audits.
English: The official language of Bermuda is English.

Bermuda Map

Company Name
SAC companies may not choose a name similar to any other legal entity in Bermuda. SAC names must end with the words “Segregated Accounts Company” or the abbreviation “SAC”. Such name designation must be included in the company’s letterhead stationary, business cards, website, brochures, and any promotional designs.

A new company must first incorporate under the Companies Act and register under the SAC Act. These are two separate processes but can be obtained simultaneously. Existing Bermuda companies can register to become a SAC as well.

Two types of companies can be incorporated in Bermuda:
1, “Local” companies are owned by citizens; and
2. “Exempt” companies owned by foreigners.
Exempt companies may only carry on business outside of Bermuda’s borders. Most incorporated companies in Bermuda are exempt.

Exempted companies must be approved by the Bermuda Monetary Authority (“BMA”). Disclosure of the ultimate beneficial owners is mandatory. Every owner holding at least 10% of the shares must execute a personal declaration as to his/her good standing with supporting documents. Once the SAC is approved, subsequent “account owners” of the separate accounts who do not having voting shares do not have to be vetted by the BMA.

A company must file a “Form 1” statutory notice with the Registrar of Companies (“Registrar”). Form 1 describes the purpose for the business and that the company will comply with the SAC Act accounting procedures. Basically, the applicant confirms that the company’s administrator or accountant will follow the SAC Act procedures for segregated accounts.

The application and submitted documents to the Registrar and the BMA are not part of the public records. However, after approval, the name of the SAC will be included in the Register of Segregated Account Companies which the public can inspect.

Note that the Registrar may request a business plan regarding the proposed activities of the SAC along with the reason for using segregated accounts. Therefore, it is recommended that applicants prepare a brief business plan supporting the application to save time.

Nature of the Segregated Account and Assets
Establishing segregated accounts does not create separate legal entities from the SAC.

Assets in a separate account must be held by the SAC as a separate fund that is not part of the general funds and are held exclusively for the benefit of the account owners. Liabilities specifically incurred by the separate account can only be paid to the creditors from the segregated account. In addition, the separate account owners shall be protected from liabilities incurred by the general account and its creditors.

The SAC’s general account assets will be the only assets held by the SAC. Only liabilities associated with the general account will be paid from the general account assets.

Governing Instrument and Contracts
Separate account owners’ interests, rights, and obligations are contained in the Governing Instrument which binds all account owners and the SAC regarding each segregated account. The Governing Instrument should set forth the requirements for becoming an account owner and voting rights (if any). In addition, explanation of the management methods, payment of profits, and upon dissolution of the segregated account how assets will be distributed.

Contracts with third parties must set forth the interests, rights, and obligations of all parties in writing. In addition, contracts will clarify that segregated accounts are not included with the SAC’s general account or other segregated accounts.

Governing Instruments are in the jurisdiction of Bermuda laws and courts.

Bermuda SAC

Segregated Account Representative
Every SAC must appoint a Segregated Account Representative (“SAR”) licensed by the Minister of Finance. All details of the SAR must be included in the SAC’s Directors and Officers Register which can be inspected by the public.

SAR’s must submit a written report to the Registrar within 30 days of:
(a) Impending insolvency of the SAC’s general account or a segregated account; or
(b) The SAR has received information or reasonably believes that the SAC Act has not been fully complied with or any criminal proceeding commenced against the SAC or any of its segregated accounts anywhere in the world.

There are no corporate, income, capital gains, inheritance, estate, stamp duty, or withholding taxes in Bermuda. SAC’s cannot engage in business inside Bermuda. Note: United States taxpayers and resident of any country imposing taxes on worldwide income must declare all income to their governments.

SAC’s must disclose to third parties that it is a segregated accounts company in every contract and stationary letterhead. The identity of the segregated account must be stated in every contract for all transactions.

Financial records must be maintained within e accepted accounting practices and standards including the preparation of all financial statements in accordance to the Companies Act. Such accounting records and financial statements must include all assets, income, liabilities, expenses, etc. associated with each segregated account. A general accounts record must be maintained showing all assets, income, liabilities, and expenses not associated with any segregated account.

Every separate account owner may inspect the account records and receive a financial statement at least once every year. In addition, for every general meeting, a financial statement must be prepared based upon an audit for the members.

Every SAC will maintain a register of segregated account owners detailing their percentage interests. This register is not open to the public.

The issuance of shares is not required. The Governing Instrument and the specific contract for the segregated account define the ownership amount and rights of account owners. However, if shares are issued all sales will be maintained in the specific account and the shares will be identified with the specific account. All books, accounts, and records of the segregated account will specify the total shares issued, the owners and percentage interest.

SAC’s may pay dividends or make distributions in relation to the particular class of shares associated with the segregated account. The SAC Act has its own test for segregated accounts solvency before dividends may be declared and other distributions made.

Bermuda Segregated Accounts Company

Protecting Account Owners
Unless clearly excluded in the contract with approval by the account owner, the SAC Act requires every contract to include these terms:
1. No parties shall seek recourse against or an interest in any asset in a segregated account for satisfaction of a liability or a claim not associated with the segregated account.
2. If any party succeeds in establishing such recourse or interest mentioned in paragraph 1 above without proving a valid association with the segregated account, such party will be held liable to the SAC for payment of a sum equal to the value of said interest or recourse; and
3. If any party seizes or attaches or levies execution upon any asset of the segregated account for any liability not associated with the specific account, that party will hold the assets in trust for the SAC until the SAC obtains equitable remedy.
If any assets are seized to pay a debt or liability not associated with the segregated account, the SAC will seek restoration and if unable will demand reimbursement from the party who benefited from such illegal seizure.

SAC’s can only wind-up for dissolution with the Registrar of Companies consent. The liquidator is required to comply with the SAC Act when dealing with the assets and liabilities of each segregated account. The liquidator will ensure than assets of one segregated account will not be used to pay the debts of other segregated accounts or the general account unless they are linked and then will abide by the terms of relevant contracts and the Governing Instrument.

Public Records
Owners’ names are never part of the public records. Only the SAC company name is in the public records.

Time for Registration
A SAC can be registered in three to five business days.

Shelf Companies
Shelf SAC companies are available in Bermuda.


A Bermuda Segregated Accounts Company (SAC) can enjoy the following benefits: no taxation, 100% ownership, privacy, flexibility, law protects owners, no required audits, the official language is English.

Beach in Bermuda


Real Answers by Experienced Professionals

Ask questions about offshore banking, company formation, asset protection and related topics.

Call Now 24 Hrs./Day
If consultants are busy, please call again.