Why Insurers Are Moving Back to Hong Kong from Bermuda: Reasons and Implications

Recently, the insurance industry in Hong Kong has been abuzz with significant news: major insurers, AXA Hong Kong and Manulife Hong Kong, have announced plans to relocate their company registrations from Bermuda back to Hong Kong.

This move has sparked widespread discussion within the industry, raising questions about the motivations behind such decisions and their potential impact on insurers’ operations, policyholders’ rights, and Hong Kong’s position as a global financial hub.

In this article, we explores the reasons why Hong Kong-based insurers initially registered in Bermuda, the factors driving their return to Hong Kong, and the broader implications for the insurance industry and the Greater Bay Area (GBA). Our analysis provides a comprehensive understanding of this trend and its significance for stakeholders.

Why Bermuda Insurers? The Appeal of an Offshore Financial Center

Bermuda, a British Overseas Territory located in the western North Atlantic, approximately 900 kilometers off the U.S. East Coast, is renowned as a global offshore financial center and a so-called “tax haven.” Comprising seven main islands and over 150 smaller islets, with Hamilton as its capital, Bermuda has long attracted multinational corporations, particularly in the insurance and reinsurance sectors.

Company Name	Registration Location
AXA China Region Insurance Company Limited	Bermuda
Manulife (International) Limited	Bermuda
Sun Life Hong Kong Limited	Bermuda
HSBC Life (International) Limited	Bermuda
FWD Life Insurance Company (Bermuda) Limited	Bermuda
AIA International Limited	Bermuda
Transamerica Life (Bermuda) Ltd.	Bermuda

The primary allure of Bermuda lies in its tax regime. The territory does not levy corporate income tax, capital gains tax, or value-added tax, imposing only minimal stamp duties.

This tax structure allows companies to significantly reduce their fiscal burdens, making Bermuda an attractive destination for insurers seeking to optimize their financial operations.

According to data from the Hong Kong Insurance Authority, of the 70 insurers licensed to conduct long-term insurance business in Hong Kong, nine, including well-known names like AIA, AXA, Manulife, and Sun Life, are registered in Bermuda.

Historically, Hong Kong-based insurers registered in Bermuda for two main reasons:

1. Tax Advantages: Bermuda’s zero-tax regime offered substantial savings compared to Hong Kong’s corporate tax rate of 16.5%.

2. Estate Duty Considerations: Until 2006, Hong Kong imposed an estate duty (ranging from 5% to 15% on estates valued above HKD 7.5 million). Registering in Bermuda, which has no estate duty, allowed insurers to structure their operations more favorably for clients and shareholders.

The primary allure of Bermuda lies in its tax regime

Additionally, Bermuda’s relatively relaxed regulatory environment, combined with its established reputation as a global insurance hub, made it an appealing choice for insurers operating in Hong Kong.

Compliance with both Hong Kong and Bermuda regulations posed minimal additional costs, allowing these companies to maintain their offshore registrations without significant operational burdens.

The Shift Back to Hong Kong: Driving Factors

Despite Bermuda’s advantages, recent global and local developments have prompted insurers to reconsider their registration strategies. The decision by AXA and Manulife to relocate to Hong Kong reflects a confluence of economic, regulatory, and strategic factors.

1. Global Tax Reforms and the OECD’s Minimum Tax Rate

The status of Bermuda and other “tax havens” like the Cayman Islands has come under increasing scrutiny from the international community. Multinational corporations have long exploited loopholes in global tax rules, shifting profits to low-tax jurisdictions and depriving governments of significant tax revenue. With rising public debt levels worldwide, governments are seeking new revenue streams to bolster fiscal sustainability.

Since 2021, the Organisation for Economic Co-operation and Development (OECD) has been advocating for a global minimum corporate tax rate of 15%, applicable regardless of where a company is registered.

As a member of the OECD, Bermuda is expected to implement this policy, which would diminish its tax advantage over Hong Kong’s 16.5% corporate tax rate. For insurers, maintaining a Bermuda registration would no longer yield significant tax savings, prompting a reassessment of their domiciliation strategies.

2. Hong Kong’s New Inward Re-domiciliation Regime

Relocating a company’s registration from Bermuda to Hong Kong has historically been a complex and costly process, involving liquidation of the Bermuda entity, establishment of a new Hong Kong entity, court approvals, and the transfer of all business operations. This process risked operational disruptions and significant expenses.

However, on May 14, 2025, the Hong Kong Legislative Council passed the Companies (Amendment) (No. 2) Ordinance 2024, introducing an inward re-domiciliation regime. This groundbreaking policy allows overseas-registered companies, such as those in Bermuda or the Cayman Islands, to transfer their legal registration to Hong Kong while preserving their corporate identity, business continuity, and existing contractual obligations.

The new regime eliminates the need for liquidation or restructuring, reducing costs and mitigating risks of operational interruptions. Importantly, all existing insurance policies issued by re-domiciled insurers remain unaffected, ensuring continuity for policyholders.

3. Strategic Alignment with Hong Kong’s Regulatory and Market Opportunities

By re-domiciling to Hong Kong, insurers can streamline their regulatory compliance, focusing solely on Hong Kong’s regulatory framework rather than navigating dual jurisdictions. This simplification enhances operational efficiency, reduces administrative costs, and allows insurers to allocate resources more effectively.

Moreover, Hong Kong’s strategic position as a gateway to the Greater Bay Area—a dynamic economic region encompassing Hong Kong, Macau, and nine cities in Guangdong Province—offers significant growth opportunities.

The GBA’s integrated market, supported by favorable policies and a burgeoning demand for financial services, provides insurers with a platform to expand their footprint and capture new market segments. Re-domiciliation aligns insurers with Hong Kong’s vision to strengthen its role as an international financial center and a global insurance hub.

Implications for Insurers, Policyholders, and Hong Kong

The re-domiciliation of insurers like AXA and Manulife carries far-reaching implications for various stakeholders:

For Insurers

• Operational Efficiency: Consolidating regulatory compliance under Hong Kong’s jurisdiction simplifies reporting and oversight, reducing administrative burdens.

• Market Opportunities: Access to the GBA’s vast market and policy incentives enables insurers to pursue growth and innovation.

• Cost Savings: Over time, the elimination of dual-jurisdiction compliance costs and alignment with Hong Kong’s tax regime can enhance profitability.

For Policyholders

• Continuity of Coverage: The re-domiciliation regime ensures that all existing policies remain valid, with no disruption to policyholders’ rights or benefits.

• Enhanced Trust: Operating under Hong Kong’s robust regulatory framework may bolster policyholders’ confidence in insurers’ stability and accountability.

• Potential for Innovation: Insurers’ increased efficiency and market focus could lead to the development of new products tailored to Hong Kong and GBA consumers.

For Hong Kong

• Strengthened Financial Hub Status: The return of major insurers reinforces Hong Kong’s position as a leading international financial center and insurance hub.

• Economic Growth: Re-domiciliation supports job creation, investment, and economic activity in Hong Kong’s financial sector.

• GBA Integration: Insurers’ alignment with Hong Kong facilitates the development of a cohesive financial ecosystem within the GBA, driving regional prosperity.

Looking Ahead: A Trend in the Making

AXA and Manulife are unlikely to be the only insurers re-domiciling to Hong Kong. Other Bermuda-registered insurers, such as AIA and Sun Life, may follow suit, leveraging the new re-domiciliation regime to capitalize on Hong Kong’s strategic advantages. This trend is poised to solidify Hong Kong’s role as a cornerstone of the global insurance industry and a key player in the GBA’s financial landscape.

At Everbright Actuarial Consulting, we believe that these developments signal a transformative period for Hong Kong’s insurance sector. Insurers that proactively adapt to these changes will be well-positioned to thrive in an increasingly competitive and interconnected market. For policyholders, the re-domiciliation of trusted insurers offers reassurance of continued service quality and access to innovative financial solutions.

Conclusion

The decision by AXA and Manulife to relocate their registrations from Bermuda to Hong Kong reflects a strategic response to global tax reforms, Hong Kong’s progressive regulatory framework, and the immense opportunities presented by the Greater Bay Area. By simplifying operations, enhancing efficiency, and aligning with Hong Kong’s vision as a global financial hub, these insurers are paving the way for a new era of growth and resilience in the insurance industry.

Everbright Actuarial Consulting remains committed to supporting insurers, policyholders, and other stakeholders in navigating this evolving landscape. For more insights or assistance with regulatory compliance and strategic planning, contact us at info@ebactuary.com .