(441) 292-5570
48 Church Street, Hamilton Bermuda
48 Church Street, Hamilton Bermuda
292-5570
About Us

Customs Letter of Credit

About the
Customs Letter
of Credit Program

BEDC has partnered with HM Customs and has allocated $200,000 in funds annually to be used to facilitate lines of credit in amounts up to a maximum of $10,000 to assist businesses in importing goods for retail sale in Bermuda. The BEDC will offer a 100% guarantee letter of credit to assist qualified applicants in securing a HM Customs Line of Credit to defer payment of duty.

The product was developed in response to an identified gap in the lending market. Results from the BEDC’s bi-annual stakeholder survey showed that small businesses were in need of lines of credit to facilitate importation of retail goods. However financial institutions were requiring letters of credit to be secured by cash which was prohibitive to most small businesses.

The Letter of Credit is designed to assist start up and existing small businesses with inventory purchases directly related to increasing sales or services.

Approved retailers are not required to provide monetary security to HM Customs for any duty deferred. However, an approved retailer is required to furnish Customs with a letter of credit from a bank or other financial institution in Bermuda guaranteeing payment of a specified amount of duty that may be deferred by that retailer under the approval given by the Collector.

Ordinarily HM Customs does not release goods to importers unless they have first made a Customs Declaration and paid the duty due. Any importer/declarant who does not wish to prepay the duty must request a line of credit from Customs. Customs will extend a line of credit when it is 100% secured by an irrevocable letter of credit issued by a Bermuda Financial Institution. For as long as the letter of credit remains active, Customs will be prepared to extend a line of credit up to the value secured by the letter.

HM Customs is willing to accept a guarantee letter from BEDC to secure the line of credit. This scoping document sets out the framework on how a retailer can be approved for a BEDC guarantee for this line of credit. Public Notice 31 – Customs Duty Deferment: Goods for Retail Sale sets out how to apply for such partial duty deferment.

The details of the Customs Letter of Credit Program are as follows:
100% Guaranteed
Approved letters of credit are 100% guaranteed by the BEDC.
Duty Payment
Duty must be paid within 3 months of goods being imported.
Default Rate
7% plus collection fees to BEDC
Application Fee
$300 application fee for small businesses. $150 will be refunded if application is unsuccessful.
HM Customs Processing Fee
HM Customs Processing Fee to be paid to that department directly when line of credit is approved.
Credit Check
$25 non-refundable credit check fee.
Processing
Applications are processed by the BEDC Officers.
Processing Time
Processing and approval within 10 business days of receipt of all required document.
EEZ Businesses Application Fee
$50 application fee for EEZ businesses/Vendors. No refund if application is unsuccessful.

The Letter of Credit product is available to all small and medium businesses, islandwide; including vendors and those businesses
located in a designated Economic Empowerment Zone.

The BEDC defines a small business as Bermudian – owned and managed; operating locally; having an annual gross payroll not exceeding $500,000 or having annual sales revenues of less than $1,000,000.

The BEDC defines a medium-sized business as a Bermudian-owned & owner-operated business enterprise with at least three of the following attributes:

  • Gross annual revenues between $1 million and $5 million
  • Annual payroll between $500K and $2.5 million
  • A minimum of 11 and a maximum of 50 employees
  • In operation for a minimum of 10 years
  • Net Assets of less than $2.5 million

Although open to all businesses who meet the criteria, the BEDC desires to expose Bermuda’s small business.

Please ensure that you have reviewed the checklist below and have all the necessary information needed to apply.Complete and compile all information below, BEFORE filling out the application.

Personal Financial Statement
Personal financial details of each owner of the business. Please fill out and submit the templates below for each owner of the business.
Personal Financial Statement Template
Business Plan or at minimum Business Profile
Clients must provide information about the history and future of the business on a prepared template. Clients are also asked to provide any signed contracts and/or agreements to support the loan amount. Please fill out the template below.
BEDC Business Profile Template
List of Goods
Submit detailed listing of retail goods to be purchased for business and imported through the programme outlining the duty rate for the items and the amount of duty to be deferred.
Location of Business
Submit documentation to attest to the location of your business (i.e. lease, etc.) and where any permissions or licenses are required, please submit copies. If you are a vendor please provide some confirmation of where you will be vending and a copy of your current pedlar’s license.
Identification
Clients are required to demonstrate that the applicant is Bermudian. Applicants must submit a copy/image of their ID for confirmation. If non-Bermudian is a partner, the Bermudian must hold the controlling interest and a copy of the partnership agreement must be submitted.
2
Submit Business Profile
Submit your Business Profile. Once you hit submit, one of our officers will vet your information and add it to our register. You will then be given your BEDC Member #, Business Register #, Vending License # (if applicable). This can take up to 2 business days.
4
Submit Application
Navigate to Customs Letter of Credit Application Form in the BEDC Member Portal. Fill out the application form, supplying us with all information and documents required. Before beginning your application, please take note of the product checklist that outlines all information needed in order to process your application.
6
Application Approval
After your application has been processed, it will be submitted for approval. If your application is approved you will be notified, the product will be issued to your account and funds will be disbursed (if applicable). *Applications will be processed within 15 business days of BEDC receiving of ALL necessary information and requirements.