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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

x    Annual Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 2002

or

¨    Transition Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Transition Period from              to             

Commission File Number 000-30889

Harbor Global Company Ltd.

(Exact Name of Registrant as Specified in its Charter)

One Faneuil Hall Marketplace

Boston, Massachusetts 02109

(617) 878-1600

(address, including Zip Code, and Telephone Number, including Area Code, of Principal Executive Offices)

Securities registered pursuant to Section 12(g) of the Act: common shares, $.0025 per share.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ¨    No x

As of June 28, 2002, the aggregate market value of the registrant’s common shares held by non-affiliates of the registrant was $34,520,374.75.

As of March 1, 2003, the registrant had 5,655,311 common shares, par value $.0025 per share, issued and outstanding.

PART I

ITEM 1.    BUSINESS.

OVERVIEW

Harbor Global Company Ltd., a Bermuda limited duration company (“Harbor Global” or the “Company”), was formed in May 2000 as a wholly owned subsidiary of The Pioneer Group, Inc., a Delaware corporation (“Pioneer”), to facilitate the merger between Pioneer and UniCredito Italiano, S.p.A., an Italian financial institution (“UniCredito”). As a condition to closing the merger and pursuant to a Distribution Agreement dated as of October 24, 2000 by and among the Company, Pioneer and Harbor Global II Ltd. (the “Distribution Agreement”), Pioneer agreed to transfer certain of its assets to Harbor Global and to distribute all of the outstanding Harbor Global common shares to its stockholders. Pioneer transferred to Harbor Global all of the assets required to be transferred pursuant to the merger agreement and the Distribution Agreement, and on October 24, 2000, Pioneer distributed all of the outstanding common shares of Harbor Global to its stockholders (the “Spin-off”). Pioneer stockholders received one Harbor Global common share for every five shares of Pioneer common stock held on that date.

Harbor Global seeks to liquidate its assets in a timely fashion on economically advantageous terms and continues to operate its assets as going concern businesses until they are liquidated. Harbor Global’s memorandum of association provides that the liquidation of its assets must be completed upon the earlier of October 24, 2005, the fifth anniversary of the date of the Spin-off, or the distribution by Harbor Global of all its assets to its shareholders. If Harbor Global has not liquidated all of its assets before October 24, 2005, the Harbor Global board of directors (“Board of Directors”), in its discretion, may authorize Harbor Global to continue to operate its assets for up to three additional one year periods.

At December 31, 2002, Harbor Global’s assets consisted primarily of the following:

On June 8, 2001, Harbor Global sold its Russian gold exploration operations through the sale of its gold exploration subsidiary Closed Joint-Stock Company “Tas-Yurjah” Mining Company (“Tas-Yurjah”), located in the Khabarovsk Territory of the Russian Far East, to a Russian gold mining and exploration company for an aggregate purchase price of approximately $8.5 million.

On April 22, 2002, Pioneer Forest entered into a definitive agreement for the sale of its Russian timber business conducted through Closed Joint-Stock Company “Forest-Starma” (“Forest-Starma”). On May 28, 2002, Pioneer Forest sold its entire interest in Pioglobal Forest, L.L.C., the sole shareholder of Forest-Starma, to a

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British Virgin Islands company for an aggregate purchase price of $7.55 million, of which $5.55 million was paid in cash at the closing and $2.0 million is payable to Pioneer Forest on May 28, 2003 pursuant to a twelve-month non-interest-bearing promissory note. The Company’s Board of Directors approved the disposition of the Russian timber operations on February 5, 2002, and accordingly, the Russian timber business was separated from the results of continuing operations and was reported as a discontinued operation in 2001.

On December 18, 2002, Pioglobal Omega, L.L.C., a wholly owned subsidiary of the Company, acquired from International Finance Corporation, a member of the World Bank Group (the “IFC”), the IFC’s 18.35% minority interest in Pioglobal First Russia, Inc. (formerly Pioneer First Russia, Inc.) (“Pioglobal First Russia”). In connection with this purchase, the Company resolved with the IFC questions previously raised by the IFC regarding the adequacy of a 1999 insurance settlement and the appropriateness of certain services charged to Pioglobal First Russia and its affiliates.

Financial information by segment and geographic area for each of the business segments can be found in Note 15 to the Company’s Consolidated Financial Statements included in this report. In addition, information regarding the revenues of each business segment can be found in Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additional information regarding each business segment and Harbor Global in general is set forth below.

Harbor Global owns and operates all of its assets through a direct majority-owned subsidiary, Harbor Global II Ltd. (“Harbor Global II”). Harbor Global owns 99% of the share capital of Harbor Global II, and HGC Ltd. (“HGC”), a wholly owned subsidiary of Harbor Global, owns the remaining 1% of the share capital of Harbor Global II. Some of Harbor Global’s assets are held directly by Harbor Global II, and some assets are held indirectly by Harbor Global II through HGCL Ltd. (“HGCL”), a wholly owned subsidiary of Harbor Global II. Harbor Global II, HGCL and HGC are Bermuda limited duration companies, and under their memorandums of association, each will liquidate concurrently with the liquidation of Harbor Global.

Stephen G. Kasnet is the President and Chief Executive Officer, and Donald H. Hunter is the Chief Operating Officer and Chief Financial Officer, of Harbor Global. Mr. Kasnet was formerly the President, and Mr. Hunter was formerly the Chief Operating Officer and Senior Vice President, of Pioneer Global Investments, a division of Pioneer. As officers of Pioneer Global Investments, Mr. Kasnet and Mr. Hunter operated substantially all of the businesses that are now owned or operated by Harbor Global. Prior to the distribution, Harbor Global entered into an administration and liquidation agreement with Calypso Management LLC (“Calypso Management”) under which Calypso Management manages the liquidation of Harbor Global and operates Harbor Global’s assets as going concern businesses pending their liquidation. Calypso Management is owned and operated by Mr. Kasnet and Mr. Hunter. Mr. Kasnet is the President and Chief Executive Officer, and Mr. Hunter is the Chief Operating Officer, Chief Financial Officer and Treasurer, of Calypso Management.

Because Harbor Global’s assets are primarily located in the Russian Federation (“Russia”), a country in which successfully operating and selling businesses requires significant experience, Harbor Global believes that its success in liquidating its assets and operating its assets pending their liquidation will depend to a significant extent upon the continued efforts of Mr. Kasnet and Mr. Hunter. In order to induce Mr. Kasnet and Mr. Hunter to become officers of Harbor Global and manage its liquidation, Harbor Global entered into an agreement under which Mr. Kasnet and Mr. Hunter would receive a portion of net proceeds distributed in connection with the liquidation. Calypso Management was created, in large part, to provide a vehicle for Mr. Kasnet and Mr. Hunter to allocate the incentive compensation they receive among themselves and other employees of Calypso Management who provide valuable assistance in connection with the administration and liquidation of Harbor Global’s assets. Harbor Global pays the operating expenses of Calypso Management, and in general, as compensation for Calypso Management’s services, Harbor Global pays Calypso Management up to 10% of the net proceeds distributed from the liquidation of Harbor Global’s assets. Harbor Global does not believe that the terms of the administrative and liquidation agreement negotiated with Calypso Management are more favorable than the terms, if any, on which Harbor Global could have negotiated a similar arrangement with an unaffiliated third party.

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Harbor Global conducts business primarily in Russia. For the year ended December 31, 2002, nearly all of Harbor Global’s revenues were derived from operations in Russia. Harbor Global’s businesses and assets are described below, together with the principal strategies that Harbor Global currently intends to employ to sell or liquidate its assets.

RUSSIAN REAL ESTATE MANAGEMENT AND INVESTMENT MANAGEMENT OPERATIONS

Harbor Global’s Russian real estate management and investment management operations are conducted through its wholly owned subsidiary, Pioglobal Omega, L.L.C. (“Pioglobal Omega”). Prior to December 18, 2002, Pioglobal Omega owned an 81.65% interest in Pioglobal First Russia, and the IFC owned an 18.35% interest in Pioglobal First Russia. On December 18, 2002, Pioglobal Omega acquired the IFC’s 18.35% minority interest in Pioglobal First Russia. In connection with this purchase, the Company resolved with the IFC questions previously raised by the IFC regarding the adequacy of a 1999 insurance settlement and the appropriateness of certain services charged to Pioglobal First Russia and its affiliates.

Pioglobal First Russia, now a wholly owned subsidiary of Pioglobal Omega, operates through two subsidiaries, Closed Joint-Stock Company “PIOGLOBAL Asset Management”, an investment management company (“PIOGLOBAL Asset Management”), and Closed Joint-Stock Company “PIOGLOBAL Services”, an information technology services company (“PIOGLOBAL Services”). Both PIOGLOBAL Asset Management and PIOGLOBAL Services are Russian joint stock companies. During 2002, both PIOGLOBAL Asset Management and PIOGLOBAL Services were wholly owned subsidiaries of Pioglobal First Russia. However, in January 2003, an aggregate of ten percent of Pioglobal First Russia’s shares in PIOGLOBAL Asset Management were awarded to two officers of PIOGLOBAL Asset Management. Accordingly, Pioglobal First Russia currently owns 90% of PIOGLOBAL Asset Management’s shares.

In addition, Pioglobal Omega, through its two wholly owned Delaware subsidiaries, Luscinia, L.L.C. and Theta Enterprises, L.L.C., holds an approximately 52% interest in Open Joint-Stock Company “PIOGLOBAL Investment Fund” (“PIOGLOBAL Investment Fund”), a Russian joint-stock company managed by Pioglobal Asset Management. Currently, approximately two million Russian stockholders hold the remaining approximately 48% interest in PIOGLOBAL Investment Fund.

PIOGLOBAL Investment Fund.    PIOGLOBAL Investment Fund is Harbor Global’s principal asset. PIOGLOBAL Investment Fund invests directly in real estate and to a lesser extent, securities of Russian companies. A significant portion of the assets of PIOGLOBAL Investment Fund consists of its ownership of the Meridian Commercial Tower, an 18-story, 22,600 square meter office building in Moscow, Russia. The Meridian Commercial Tower, primarily occupied by U.S. and European corporate tenants, is managed by PREA, L.L.C. (“PREA”), Harbor Global’s real estate management subsidiary. PIOGLOBAL Investment Fund has agreed to pay PREA a property management fee of 5% of gross revenues less any value-added taxes or similar taxes.

PREA leases the Meridian Commercial Tower from PIOGLOBAL Investment Fund under a master lease agreement and in turn, subleases the premises to tenants. PREA pays PIOGLOBAL Investment Fund an amount equal to gross revenues less building operating expenses, the PREA property management fee described above and any value added taxes or similar taxes. The master lease agreement between PIOGLOBAL Investment Fund and PREA expires in 2011.

The remaining assets of PIOGLOBAL Investment Fund primarily consist of real estate related securities, including a 25% interest in the Cosmos Hotel, located in Moscow, Russia, and securities in Russian companies, some of which are illiquid.

PIOGLOBAL Asset Management.    Under a management agreement between PIOGLOBAL Asset Management and PIOGLOBAL Investment Fund, PIOGLOBAL Asset Management provides management

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services to PIOGLOBAL Investment Fund for an annual fee of 5% of gross assets less any value added taxes or similar taxes.

PIOGLOBAL Asset Management also serves as an investment manager to three Russian open-end unit investment funds. As compensation for its investment management services, PIOGLOBAL Asset Management receives annual management fees ranging between one percent and three and six-tenths of a percent of the net asset value of the unit funds. In addition, PIOGLOBAL Asset Management provides trust management services to institutional and high net worth clients for which it receives an annual average management fee of approximately 2% of the net asset value of trust assets under management.

PIOGLOBAL Services.    PIOGLOBAL Services provides information technology services to PIOGLOBAL Investment Fund and the three unit funds managed by PIOGLOBAL Asset Management for an annual fee of approximately $333,000. In 2002, PIOGLOBAL Services’ operations were supported solely by this fee.

In 2002, 2001, and 2000, Harbor Global’s Russian real estate management and investment management operations reported revenues and net (loss) income from continuing operations as shown in the table below:

In 2002, revenues from the PIOGLOBAL Investment Fund comprised approximately 73% of Harbor Global’s total revenue. Furthermore, Meridian Commercial Tower lease revenues accounted for approximately 83% of the revenues of PIOGLOBAL Investment Fund and approximately 76% of the total revenue generated by Harbor Global’s Russian real estate management and investment management operations. Harbor Global believes that a loss of one or a few tenants of the Meridian Commercial Tower would not have a material adverse effect on this segment. The Company maintains comprehensive property insurance covering the full replacement cost of the building, value added taxes incurred during any reconstruction and up to three years of lost rental revenue during any reconstruction period. Harbor Global does not maintain political risk insurance for the PIOGLOBAL Investment Fund or any of its businesses.

Minority Interest in Pioglobal First Russia.    In connection with the minority investment of the IFC in Pioglobal First Russia, the IFC, Pioglobal Omega and Pioglobal First Russia entered into a stockholders agreement and a put and call agreement. All rights and obligations of the IFC, Pioglobal Omega and Pioglobal First Russia under the stockholders agreement and put and call agreement terminated as of December 18, 2002 simultaneously with the purchase by Pioglobal Omega of the IFC’s minority investment in Pioglobal First Russia.

Asset Realization Strategy.    PIOGLOBAL Asset Management is seeking to increase the value of the PIOGLOBAL Investment Fund through a process of restructuring the PIOGLOBAL Investment Fund portfolio by:

In addition, PIOGLOBAL Asset Management is seeking to increase assets under management for the three Russian unit investment funds it manages, its institutional trust management business, and new products expected

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to be offered in 2003. PIOGLOBAL Asset Management is also actively seeking to jointly market and distribute its products by establishing relationships with a number of independent commercial banks in Russia. In this connection, PIOGLOBAL Asset Management has established three sales offices in Moscow, leasing prime retail space from two independent commercial banks in Russia. Additionally, PIOGLOBAL Asset Management maintains several other points of sale within branches of independent commercial banks, located primarily in Moscow, and at its corporate office, also located in Moscow. PIOGLOBAL Asset Management has also upgraded and expanded the scope of its institutional sales force.

Competition.    PIOGLOBAL Asset Management occupies a leading position in Russia with respect to assets under management for its open-end unit funds and trust management services. As of January 10, 2003, PIOGLOBAL Asset Management’s approximately $17.9 million in net assets under management comprised approximately 20% of total unit fund and trust fund assets under management in Russia. PIOGLOBAL Asset Management has seven significant competitors, with aggregate net assets under management comprising 67% of the remainder of the market. PIOGLOBAL Asset Management is seeking to increase its assets under management by competing for retail, institutional and high net worth investors. However, some of its competitors have substantially greater resources to attract such investors. Several factors affect competitive conditions in the Russian unit fund business, including the outlook for the Russian economy, levels of personal disposable income and consumer confidence in the Russian financial services system.

Employees.    At December 31, 2002, Pioglobal First Russia and its subsidiaries, together with PIOGLOBAL Investment Fund, employed 65 persons.

REAL ESTATE MANAGEMENT OPERATIONS

Harbor Global’s real estate management operations are conducted by PREA. PREA is based in Boston and conducts its operations in Russia through a representative office in Moscow. In 2002, virtually all of PREA’s revenues were derived from managing the Meridian Commercial Tower for PIOGLOBAL Investment Fund. PREA also provides advisory services to third parties. The scope of its advisory services includes property management, facilities management, development management, feasibility and valuation analysis, fund management and corporate advisory services.

Prior to April 2001, PREA also provided real estate investment opportunities in Poland to institutional investors through a pooled investment fund, the Pioneer Polish Real Estate Fund, S.A. (the “Polish Real Estate Fund”). In April 2001, Harbor Global announced its intention to liquidate the Polish Real Estate Fund. In connection with the liquidation, PREA purchased all of the shares of the Polish Real Estate Fund held by the Polish Real Estate Fund’s unaffiliated investors for an aggregate purchase price of $1.59 million. The purchase, which closed during April 2001, relieved Harbor Global of its obligation to make capital contributions to the Polish Real Estate Fund in the amount of approximately $5.4 million pursuant to the Subscription and Shareholders’ Agreement dated as of October 20, 1999 by and among the Polish Real Estate Fund and the investors. Harbor Global wrote-off its investment in the Polish Real Estate Fund, which is included in other income (expense), in the second quarter of 2001. During 2002, the Company liquidated the Polish Real Estate Fund and PREA Poland Sp. z o.o., the subsidiary through which it previously conducted its real estate management business in Poland, and received a distribution of approximately $0.3 million in 2002 in connection with the liquidations.

Asset Realization Strategy.    The asset realization strategy for PREA’s Moscow operation will continue to be inextricably linked to that of the Meridian Commercial Tower unless PREA is successful in attracting a significant core of third-party customers.

Employees.    At December 31, 2002, PREA and its subsidiaries had 30 employees, including one expatriate employee provided by PIOGlobal Corporation, a Delaware corporation and indirect wholly owned subsidiary of Harbor Global.

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OTHER

Cash and Marketable Securities

Cash, cash equivalents and marketable securities held directly by Harbor Global at December 31, 2002 totaled approximately $16.2 million, including long-term restricted cash of $5.0 million to satisfy the note payable associated with Pioneer’s former gold mining operations.

Ashanti Proceeds

In May 2000, Pioglobal Goldfields II Limited sold its gold mining operations in Ghana to Ashanti Goldfields Teberebie Limited for an $18.8 million base purchase price plus additional payments of up to $5 million, contingent upon the market price of gold and productivity of the Ghanaian gold mine. On June 19, 2000, $5 million of the base purchase price was paid to Pioglobal Goldfields II in cash and $13.8 million of the base purchase price was paid in the form of a non-interest-bearing promissory note. Under the promissory note, Ashanti is obligated to pay the purchase price over five years, with principal amounts of between $2.5 million and $3.75 million due annually, as specified in the purchase agreement. At December 31, 2002 the Company had received $5.0 million of the $13.8 million promissory note from Ashanti.

With respect to the additional contingent payments referenced above, Ashanti is required to pay Pioneer Goldfields II $250,000 each calendar quarter commencing on April 1, 2001 and ending March 31, 2006 during which:

The conditions described above were not met during any calendar quarter ending on or before December 31, 2002. Accordingly, assuming each of the conditions described above are met during each calendar quarter after December 31, 2002 through March 31, 2006, the maximum supplemental payment Pioglobal Goldfields II could receive from Ashanti is $3.25 million.

In addition, under the Distribution Agreement, Harbor Global agreed that, promptly after the fifth anniversary of the closing of the purchase agreement, it will pay to Pioneer the lesser of $5 million or the actual proceeds received by Pioglobal Goldfields II from Ashanti under the purchase agreement less any indemnification claims paid under the purchase agreement. If any indemnification claim under the purchase agreement is pending on June 19, 2005, Harbor Global will pay the appropriate amount described above promptly upon resolution of the pending claim or claims.

In connection with the sale to Ashanti, each of Pioglobal Goldfields II and Pioneer agreed to indemnify Ashanti for the breach of any representation or warranty of Pioglobal Goldfields II contained in the purchase agreement for an amount not to exceed the total purchase price actually paid by Ashanti to Pioglobal Goldfields II under the purchase agreement. The representations and warranties contained in the purchase agreement, other than those relating to tax and environmental issues, survived until June 19, 2002. The tax and environmental representations and warranties survive until June 19, 2005. Under the Distribution Agreement, Harbor Global has agreed to reimburse Pioneer for any liability it incurs in connection with any claim brought by Ashanti for indemnification under the purchase agreement.

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Polish Venture Capital Investment

Harbor Global holds minority interests in two venture capital partnerships, Prospect Poland U.S., L.P. (formerly “Pioneer Poland U.S., L.P.”) and Prospect Poland UK, L.P. (formerly “Pioneer Poland UK, L.P.”) Together, the venture capital partnerships constitute the Prospect Poland Fund (formerly the “Pioneer Poland Fund”). Until November 1, 2001, Pioglobal Poland U.S. (Jersey) Ltd., previously a wholly owned subsidiary of Harbor Global, held a 7.2% interest in Prospect Poland U.S., L.P., an approximately 9.2% interest in Prospect Poland UK, L.P. and a 59.5% interest in the general partner of the Prospect Poland Fund. In addition, until that time, Pioglobal Management (Jersey) Limited, formerly a wholly owned subsidiary of the Company, managed the Prospect Poland Fund together with European Convergence Partners, Sp. z o.o., another formerly wholly owned subsidiary of the Company and subadvisor of the Prospect Poland Fund. On November 1, 2001, Harbor Global sold the manager and subadvisor of the Prospect Poland Fund and its general partner interest in the Prospect Poland Fund to AIB WBK Fund Management, Sp. z o.o. for nominal consideration through the sale of Pioglobal Poland U.S. (Jersey) Ltd., Pioneer Management (Jersey) Limited and European Convergence Partners Sp. z o.o. Harbor Global retained its 7.2% and 9.2% interests in Prospect Poland U.S., L.P. and Prospect Poland UK L.P., respectively.

At December 31, 2002, the Prospect Poland Fund had received approximately $60.6 million in committed capital of which approximately $51.9 million had been invested in 10 privately held Polish companies engaged in:

In recent years, the Company has significantly written-down the carrying values of the underlying portfolio investments. Accordingly, the estimated market value of the portfolio at December 31, 2002 was approximately $12 million, and Harbor Global’s minority interest in the portfolio was approximately $0.8 million.

DISCONTINUED OPERATIONS

Russian Timber Operations

On May 28, 2002, Pioneer Forest sold its entire interest in Pioglobal Forest, L.L.C., the sole shareholder of Forest-Starma, to a British Virgin Islands company for an aggregate purchase price of $7.55 million, of which $5.55 million was paid in cash at the closing and $2.0 million is payable to Pioneer Forest on May 28, 2003 pursuant to a twelve-month non-interest-bearing promissory note. At closing, the cash received by Pioneer Forest, net of cash retained in Forest-Starma, amounted to approximately $5.0 million. The promissory note is recorded in current assets as a note receivable in the accompanying consolidated balance sheets.

Pioneer Forest has agreed to indemnify the purchaser for breach of any representations and warranties made by Pioneer Forest. This indemnification obligation terminates on May 28, 2003, except with respect to any claim

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that is: (a) properly asserted in writing prior May 28, 2003 and identified as a claim for indemnification in accordance with the terms of the purchase agreement, or (b) the result of fraud on the part of Pioneer Forest, which such claims, if any, shall survive until they are resolved and satisfied in full. The maximum aggregate liability of Pioneer Forest under the indemnification provisions of the purchase agreement is $1.5 million, except that claims relating to the business and activities of Pioglobal Forest and Forest-Starma following the closing are not subject to any cap on liability.

The Company’s Board of Directors approved the disposition of the Russian timber operations on February 5, 2002, and accordingly, the Russian timber business was separated from the results of continuing operations and was reported as a discontinued operation starting in 2001. Prior to 2001, the Company reported its Russian timber operations as a separate segment.

A three-year financial summary for the timber business is shown below:

EMPLOYEES

At December 31, 2002, Harbor Global and its subsidiaries employed a total of 95 employees worldwide. None of the employees of Harbor Global or its subsidiaries are unionized or parties to any collective bargaining agreement.

ITEM 2.    DESCRIPTION OF PROPERTY.

Harbor Global’s principal properties consist of its leased principal executive offices in Boston, Massachusetts, and its leased offices in Moscow, Russia.

The Company and its subsidiaries conduct their principal operations from leased premises with approximately 3,497 square feet at One Faneuil Hall Marketplace, Boston, Massachusetts. The lease commenced on November 15, 2000 at a rate of $160,862 per annum and will expire on October 24, 2005.

PIOGLOBAL Asset Management and PIOGLOBAL Services lease, in the aggregate, approximately 8,748 square feet of office space in Moscow, Russia. The aggregate annual rent and related fees for these premises is approximately $459,938. A lease for approximately 1,260 square feet expires on September 30, 2003, leases totaling approximately 6,744 square feet expire on February 28, 2007 and a lease for approximately 744 square feet expires on January 31, 2008.

ITEM 3.    LEGAL PROCEEDINGS.

On December 18, 2002, Pioglobal Omega acquired the IFC’s 18.35% minority interest in Pioglobal First Russia. In connection with this purchase, the Company resolved with the IFC questions raised previously by the IFC regarding the adequacy of a 1999 insurance settlement and the appropriateness of certain services charged to Pioglobal First Russia and its subsidiaries by Harbor Global, its predecessor, Pioneer, and certain of their affiliates. Harbor Global believes that these services were properly charged to Pioglobal First Russia and its subsidiaries and that the 1999 insurance settlement was appropriate.

On October 25, 2002, a former employee of a Pioneer affiliate filed a complaint against PIOGlobal Corporation, Pioneer and Pioneer Investment Management USA, Inc., in the Massachusetts Superior Court,

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Suffolk County. An amended complaint was served on PIOGlobal Corporation on October 25, 2002. The amended complaint alleges that the former employee was terminated as President and Chief Investment Officer of an investment fund managed by Pioneer. The former employee brings claims for breach of contract, violation of the Massachusetts Wage Act and Quantum Meruit and seeks unspecified monetary damages. The Company believes the former employee’s claims against it are without merit. The Company has commenced an arbitration process to resolve the matter.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The 2002 annual general meeting of the Company’s shareholders (the “Annual Meeting”) was held on October 22, 2002. At the Annual Meeting, proxies representing 4,354,192 shares, or 77.07% of the Company’s outstanding shares, were voted as follows:

To appoint Deloitte & Touche LLP as independent auditor for the Company and to delegate to the Company’s Audit Committee the authority to fix the independent auditor’s fee for the fiscal year ending December 31, 2002.

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company’s common shares commenced trading on the OTC Bulletin Board in October 2000 under the symbol HRBG. The following table sets forth the high and low bid quotations for the periods indicated as reported by the National Association of Securities Dealers Automated Quotation System (NASDAQ) between dealers and does not include retail markups, markdowns, or commissions and may not necessarily represent actual transactions.

On December 31, 2002, the Company had approximately 2,100 holders of record of its common stock.

On November 22, 2002, the Company made a distribution of $0.90 per share to shareholders of record as of November 8, 2002. In the course of liquidating its assets, the Company anticipates paying additional cash dividends to its shareholders.

Recent Sales of Unregistered Securities.    In reliance on Section 4(2) of the Securities Act of 1933 (transactions by an issuer not involving any public offering), and in connection with the Spin-off, Harbor Global

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issued 1,200,000 common shares, par value $.01 per share, to Pioneer on June 20, 2000 at a per share purchase price of par value for aggregate cash consideration of $12,000. Harbor Global subsequently effected a four-to-one stock split on August 15, 2000.

In reliance on Section 4(2) of the Securities Act of 1933 (transactions by an issuer not involving any public offering), and in connection with the Spin-off, Harbor Global issued 843,311 common shares, par value $.0025 per share, to Pioneer on October 24, 2000 at a per share purchase price of par value for aggregate cash consideration of $2,108.28.

In reliance on Section 4(2) of the Securities Act of 1933 (transactions by an issuer not involving any public offering), and in accordance with the Company’s shareholder approved Non-Employee Director Share Plan, the Company issued 1,500 shares of its common stock to each of its four directors on October 24, 2002 and October 24, 2001. According to the plan, on each anniversary of October 24, 2000, the Spin-off date, each director of the Company who is not an employee will be granted 1,500 common shares in consideration of his or her future services as a director.

ITEM 6.    SELECTED FINANCIAL DATA.

The following table presents summary consolidated historical financial data for Harbor Global for the five fiscal years ended December 31, which has been derived from the audited Consolidated Financial Statements of Harbor Global for these periods. The following selected consolidated financial data should be read in conjunction with Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Consolidated Financial Statements of Harbor Global, including the notes thereto, referred to in Item 8. The consolidated financials included herein may not necessarily reflect the consolidated results of operations, financial position, changes in shareholders’ equity and cash flows of Harbor Global if it had been a separate stand-alone entity during the years presented, other than 2001 and 2002.

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of the Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, and income. On an on-going basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the Company’s assets, liabilities, and income that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The company considers its critical accounting policies to include those related to the fair value of Russian investments classified as available-for-sale pursuant to SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”), valuations of its Polish venture capital holdings, accrued management fees and deferred taxes.

Russian investments consist of equity and fixed income securities held in the portfolio of the PIOGLOBAL Investment Fund. Equity securities are classified as either available-for-sale and recorded at fair value pursuant to SFAS 115 or as long-term investments. Fixed income securities are characterized as either available-for-sale and recorded at fair value pursuant to SFAS 115 or as trading securities. In determining fair value, individual equity securities must first satisfy certain trading volume and bid-ask spread criteria established by management, to demonstrate that there is sufficient breadth and scope in the market for that security. Equity securities that satisfy these criteria are recorded in long-term marketable securities based on the quoted price in the Russian Trading System. Unrealized gains and losses are recorded in stockholders equity as other comprehensive income. Realized gains or losses and any other than temporary declines in value are reported in other income (expense). For Russian investments that do not meet these criteria, the Company continues to classify these equity securities as long-term investments and carry such investments at cost with adjustments made for other than temporary impairment.

The Company retains an approximately 8% limited partnership interest in the Prospect Poland Fund. Polish venture capital investments within the Prospect Poland Fund are recorded at fair value as determined by the management of the Prospect Poland Fund. Unrealized and realized gains or losses are recorded in the Consolidated Statement of Earnings. The Company analyzes the assumptions supporting changes in the fair value of these investments for appropriateness on a quarterly basis.

On August 7, 2000, Harbor Global entered into an administration and liquidation agreement with Calypso Management pursuant to which Calypso Management manages the liquidation of Harbor Global and operates Harbor Global’s assets pending their liquidation. As compensation for its provision of services to Harbor Global, Calypso Management receives a portion of the net proceeds distributed from the liquidation of Harbor Global’s assets, based upon a predetermined schedule, which varies depending upon the source of the distribution and the cumulative amount of distributions since the Spin-off. Harbor Global accrues such management fees at the earlier of (1) the formal declaration by the Board of Directors of a distribution and (2) the time when a distributable amount is estimable following the sale or liquidation of an asset.

The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities. The Company regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences.

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OVERVIEW

The Consolidated Financial Statements of Harbor Global’s principal operations include its Russian real estate management and investment management operations, real estate management operations and other operations. Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented in three sections: Results of Operations for the years ended December 31, 2002, 2001 and 2000, Liquidity and Capital Resources, and Future Operating Results.

Results of Operations for the years ended December 31, 2002, 2001, and 2000

Consolidated Operations.    For fiscal year 2002, Harbor Global reported net income of $1.1 million as compared to net losses of $8.9 million and $10.0 million for fiscal years 2001 and 2000, respectively.

Net income from continuing operations was $0.7 million in 2002 compared to $2.4 million in 2001. The $1.7 million decrease in net income from continuing operations is attributable principally to:

For fiscal year 2001, Harbor Global reported net income from continuing operations of $2.4 million as compared to net losses from continuing operations of $3.9 million for fiscal year 2000, reflecting a $6.3 million increase in income. The increase in income was attributable principally to the $7.3 million gain on the sale of Tas-Yurjah, a $3.3 million increase in interest and dividend income, a $2.0 million reduction in corporate overhead expenses, and a $1.4 million reduction in salary and benefit expenses due to manpower reductions followed by the sale or closure of the Company’s operations in Poland. Offsetting these reductions was a $4.7 million decrease in realized portfolio gains from the Russian real estate management and investment management operations, a $1.9 million write-off of the Company’s investment in the Fund, and a $0.7 million loss on the sale of the Company’s general partnership interest in the Prospect Poland Fund.

Income of $0.4 million from discontinued operations in 2002 represents an increase in the final selling price of the Russian timber operations over the 2001 estimate. Losses from discontinued Russian timber operations totaled $11.3 million in 2001, which reflects an $8.2 million estimated loss on the disposition of the Russian timber segment and a $3.1 million loss from operations. Losses from discontinued Russian timber operations and Russian brokerage operations (conducted by Harbor Global’s former parent, Pioneer) were approximately $6.1 million in 2000. The loss in 2000 was attributable primarily to the operations of the former Russian timber segment.

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The revenues and net income by on-going business segment for 2002, 2001 and 2000 are set forth on the following table:

Russian Real Estate Management and Investment Management Operations.    The Russian real estate management and investment management operations reported a net loss of $0.1 million in 2002 compared to net income of $0.9 million in 2001. The $1.0 million decrease in income represents an additional $2.0 million of corporate overhead expenses reflecting the reallocation of such expenses as segments and other operations are discontinued and $1.2 million of additional advertising and employee related expenses associated with the marketing and sales initiative of PIOGLOBAL Asset Management to raise assets and develop the Russian unit investment fund business. These expenses were offset by approximately $1.5 million of additional realized gains from portfolio sales and an increase in income from Meridian Commercial Tower of approximately $0.7 million due to an additional $1.1 million in revenue as a result of increased occupancy.

Net income from continuing operations was $0.9 million in 2001 as compared to net income from continuing operations of $3.9 million in 2000, reflecting a decrease in income of $3.0 million. The decrease was attributable to approximately $4.7 million of lower realized gains from portfolio sales and lower rental income of $0.6 million from Meridian Commercial Tower due to a higher vacancy rate. These decreases were offset partially by a $1.1 million reduction in corporate overhead costs and a $1.0 million increase in interest and dividend income.

Real Estate Management Operations.    For the year ended December 31, 2002, Harbor Global’s real estate management operations reported losses of $0.7 million, a decrease of $3.3 million compared to losses of $4.0 million in 2001. During 2001, the Company wrote off its $1.9 million investment in the Polish Real Estate Fund and closed its operations in Poland after incurring operating losses of $0.2 million. Legal expenses associated with the closure were $0.3 million. During 2002, corporate overhead expenses allocated to the real estate management operations decreased by $0.5 million and the Company reported income of approximately $0.3 million for a liquidating distribution from Poland. In addition, property management and technical service income in Moscow increased by $0.1 million in 2002 due to increased occupancy at Meridian Commercial Tower.

The real estate management operations reported losses of $4.0 million in 2001 compared to losses of $3.6 million in 2000. The $0.4 million increase in losses reflects the $1.9 million write off of the Company’s investment in the Polish Real Estate Fund offset by a $0.9 million reduction in corporate overhead costs and a $0.7 million reduction in salary, benefit and facility expenses due to lower headcount and the closure of the office in Poland at the end of the second quarter of 2001.

Other.    Harbor Global’s other segment reported net income of $1.5 million in 2002 compared to $5.5 million in 2001. The $4.0 million decrease in income reflects the $7.3 million gain on the sale of Tas-Yurjah recorded in 2001. Offsetting the gain were the following expenses recorded in 2001: $1.5 million of corporate overhead costs allocated to venture capital operations, $0.8 million in management fees associated with the sale of Tas-Yurjah, which were recorded in 2001 upon declaring a distribution to Harbor Global’s shareholders,

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$0.7 million loss on the sale of the Company’s general partnership interest in the Prospect Poland Fund and $0.3 million of operating expenses incurred by Tas-Yurjah prior to its sale.

Net income was $5.5 million in 2001 compared to a net loss of $4.2 million in 2000, reflecting an increase in income of $9.7 million. In 2001, Harbor Global’s other segment reported the $7.3 million gain on the sale of Tas-Yurjah and an additional $2.3 million of interest income. Offsetting the income in 2001 was a loss of $0.7 million recorded from the sale of the venture capital segment and a $0.5 million increase in corporate overhead expenses allocated to the venture capital segment. In 2000, the other segment had an additional $1.0 million of operating expenses from Tas-Yurjah and additional venture capital write-downs net of minority interest of $0.3 million.

Discontinued Operations.    On May 28, 2002, Pioneer Forest sold its entire interest in Pioglobal Forest, L.L.C., the sole shareholder of Forest-Starma, to a British Virgin Islands company for an aggregate purchase price of $7.55 million, of which $5.5 million was paid in cash at the closing and $2.0 million is payable to Pioneer Forest on may 28, 2003 pursuant to a twelve-month non-interest-bearing promissory note. At closing, the cash received by Pioneer Forest, net of cash retained by Forest-Starma, amounted to approximately $5.0 million. The promissory note is recorded in current assets as a note receivable in the accompanying consolidated balance sheets.

Pioneer Forest has agreed to indemnify the purchaser for breach of any representations and warranties made by Pioneer Forest. This indemnification obligation terminates on May 28, 2003, except with respect to any claim that is: (a) properly asserted in writing prior May 28, 2003 and identified as a claim for indemnification in accordance with the terms of the purchase agreement, or (b) the result of fraud on the part of Pioneer Forest, which such claims, if any, shall survive until they are resolved and satisfied in full. The maximum aggregate liability of Pioneer Forest under the indemnification provisions of the purchase agreement is $1.5 million, except that claims relating to the business and activities of Pioglobal Forest and Forest-Starma following the closing are not subject to any cap on liability.

The Company’s Board of Directors approved the disposition of the Russian timber operations on February 5, 2002, and accordingly, the Russian timber business was separated from the results of continuing operations and was reported as a discontinued operation starting in 2001. Prior to 2001, the Company reported its Russian timber operations as a separate segment.

The following table summarizes income (loss) from discontinued operations for the three years ended December 31:

Russian Timber

Income from discontinued Russian timber operations of $0.4 million in 2002 represents an increase in the selling price of the operations over the amount anticipated at year end 2001. Losses from discontinued Russian timber operations during 2001 were $11.3 million, comprised of $3.1 million from operations and $8.2 million from the estimated loss on the disposition of the Russian timber operations segment. The loss of $5.2 million for 2000 represents losses from operations.

Russian Brokerage Operations

The Russian brokerage operations consisted of two of Pioglobal Asset Management’s wholly owned subsidiaries, Closed Joint-Stock Company “Pioneer Securities” and UKS Securities Limited (“UKS Securities”).

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The liquidation of UKS Securities was completed in August 2000. Accordingly, losses of $0.9 million were recorded for the year ended December 31, 2000.

Liquidity and Capital Resources

Liquid assets held directly by Harbor Global consisting of cash and cash equivalents and marketable securities maintained for general corporate purposes were $16.2 million as of December 31, 2002, of which $5.0 million is restricted. This represents a $3.8 million decrease from the 2001 fiscal year end and is attributable principally to the 2002 distribution to shareholders, the funding of operations, the $1.8 million escrow payment to an officer and management fees paid to Calypso Management in accordance with the administration and liquidation agreement (refer to Item 13 in this report). These decreases were offset partially by $5.5 million of proceeds from the sale of the Company’s Russian timber operations, the receipt of $2.5 million from Ashanti and dividend income from PIOGLOBAL Investment Fund of approximately $1.3 million. Management believes that the cash available for general corporate purposes is sufficient to fund operations over the next two years.

The assets of the Company’s majority-owned Russian subsidiary, PIOGLOBAL Investment Fund, consist of cash and cash equivalents, equity securities (both liquid and illiquid), marketable securities, real estate holdings, and other miscellaneous assets.

Future Operating Results

From time to time, management may make forward-looking statements in this Form 10-K, in other documents that the Company files with the Securities and Exchange Commission (including exhibits and those documents incorporated by reference into the Form 10-K), in press releases or in other public discussions. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for these statements. For this purpose, a forward-looking statement is any statement that is not a statement of historical fact. Forward-looking statements include, but are not limited to, those about asset realization plans and strategies, anticipated expenses, liquidity and capital resources and expectations about market conditions. Forward-looking statements can be identified by the words “may,” “believes,” “anticipates,” “plans,” “expects,” “estimates” and similar expressions. Forward-looking statements are based on currently available information and management’s expectations of future results but involve certain assumptions. Management cautions readers that assumptions involve substantial risks and uncertainties. Consequently, any forward-looking statement could turn out to be wrong. Many factors could cause actual results to differ materially from expectations. Management assumes no obligation to update any such forward-looking statements. Described below are some of the important factors that could affect revenues or results of operations.

HARBOR GLOBAL HAS A LIMITED OPERATING HISTORY AS AN INDEPENDENT COMPANY.

Harbor Global has operated as an independent public company since October 24, 2000 and therefore has a limited operating history as an independent company. The financial statements included in this Form 10-K may not necessarily reflect the results of operations, financial condition and cash flows that would have been achieved had Harbor Global and its subsidiaries operated as an independent company prior to the Spin-Off, particularly in light of Harbor Global’s intent to liquidate its assets within a limited period of time.

THERE CAN BE NO ASSURANCE THAT SHAREHOLDERS WILL BE ABLE TO SELL THEIR HARBOR GLOBAL COMMON SHARES.

Harbor Global common shares are not listed on any securities exchange or on The Nasdaq Stock Market^®.

Furthermore, Harbor Global does not intend to:

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Harbor Global cannot provide assurances as to the prices at which Harbor Global common shares may trade or provide assurances that shareholders will be able to sell their Harbor Global common shares.

THE POTENTIAL VALUES TO BE REALIZED UPON THE SALE OR LIQUIDATION OF MOST OF HARBOR GLOBAL’S ASSETS, IF ANY, ARE SPECULATIVE.

The potential values to be realized upon the sale of Harbor Global’s Russian real estate management and investment management operations, if any, are speculative.

A significant portion of Harbor Global’s Russian real estate management and investment management operations consists of its approximately 52% interest in PIOGLOBAL Investment Fund, a company that invests in Russian real estate, and to a lesser extent, securities of Russian companies. Generally, the Russian real estate and securities markets are significantly smaller and less liquid than the markets in the United States, and as a result, a portion of the assets held by PIOGLOBAL Investment Fund are illiquid. There is also limited liquidity in some of the publicly traded securities of PIOGLOBAL Investment Fund. Consequently, Harbor Global may have difficulty selling some of its investment in PIOGLOBAL Investment Fund or causing PIOGLOBAL Investment Fund to liquidate some of its underlying assets, and may only be able to do so at prices, which may not reflect the long-term value of its investments.

HARBOR GLOBAL’S BUSINESSES, PARTICULARLY THOSE CONDUCTED IN EMERGING MARKETS, ARE SUSCEPTIBLE TO NUMEROUS RISKS AND UNCERTAINTIES ASSOCIATED WITH INTERNATIONAL OPERATIONS.

Harbor Global conducts business in countries outside of the United States, primarily in Russia. Harbor Global will continue to operate its international businesses until those businesses are liquidated and will continue to be subject to the risks of doing business internationally, including:

For example, in recent years Russia has undergone substantial political, economic and social change. As is typical of an emerging market, Russia does not possess a well-developed business, legal and regulatory infrastructure that would generally exist in the United States or in a more mature free market economy. Accordingly, Harbor Global’s Russian real estate management and investment management operations involve significant risks, such as those listed above, which are not typically associated with developed markets. The liquidation of these businesses, as well as the successful operation of these businesses pending their liquidation, will depend on the stability of, and economic conditions in, these emerging markets.

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THE LOSS OF KEY OFFICERS AND MANAGERS COULD IMPAIR THE ABILITY OF HARBOR GLOBAL TO SUCCESSFULLY OPERATE AND MANAGE ITS ASSETS PRIOR TO THEIR LIQUIDATION.

Mr. Kasnet is the President and Chief Executive Officer, and Mr. Hunter is the Chief Operating Officer and Chief Financial Officer of Harbor Global. Mr. Kasnet previously served as the President, and Mr. Hunter previously served as the Chief Operating Officer and Senior Vice President of Pioneer Global Investments, a division of Pioneer. As executive officers of Pioneer Global Investments, Mr. Kasnet and Mr. Hunter operated substantially all the businesses that Harbor Global now owns. In addition, Harbor Global has entered into an administration and liquidation agreement with Calypso Management, an entity owned and operated by Mr. Kasnet and Mr. Hunter, under which Calypso Management manages the liquidation of Harbor Global and operates its assets as going concern businesses until they are liquidated.

Because Harbor Global’s assets are a diverse range of businesses and are generally located in countries in which successfully conducting and selling businesses requires significant experience, Harbor Global believes that its success in liquidating its assets and operating its assets pending their liquidation will depend to a significant extent upon the continued efforts of Mr. Kasnet and Mr. Hunter. The loss of the services of either Mr. Kasnet or Mr. Hunter could have a material adverse effect upon Harbor Global’s results of operations and financial condition. The services of Mr. Kasnet and Mr. Hunter may also be critical to Harbor Global’s ability to liquidate its assets at prices that will enable Harbor Global to make meaningful distributions to its shareholders.

Mr. Kasnet and Mr. Hunter both entered into employment agreements with Calypso Management. Mr. Kasnet’s employment agreement provides for a minimum term of two years and may be terminated by Mr. Kasnet upon 120 days prior written notice after October 24, 2002. Mr. Hunter’s employment agreement provides that Mr. Hunter’s employment with Calypso Management is at will, subject to termination by either Calypso Management or Mr. Hunter upon 60 days prior written notice. If either Mr. Kasnet’s or Mr. Hunter’s employment with Calypso Management is terminated, he will cease to be an officer of Harbor Global. In addition, Harbor Global has obtained key officer life insurance policies with benefits payable to Harbor Global for Mr. Kasnet and Mr. Hunter.

HARBOR GLOBAL WILL INDEMNIFY PIONEER FOR SOME LIABILITIES ACCRUING AFTER THE SPIN-OFF.

Under the Distribution Agreement, Harbor Global agreed to indemnify Pioneer for liabilities, other than tax liabilities, incurred by Pioneer relating to the businesses or operations of the Harbor Global assets. For example, in connection with the sale of its gold mining operations in Ghana to Ashanti, Pioneer has agreed to indemnify Ashanti for claims arising under the purchase agreement before June 19, 2005 relating to its Ghanaian gold mining operations. Under the Distribution Agreement, Pioneer transferred Pioglobal Goldfields II, the Pioneer subsidiary through which Pioneer’s gold mining operations in Ghana were conducted, to Harbor Global. As a result of the transfer, Harbor Global is obligated to reimburse Pioneer in the event that Ashanti seeks indemnification for any claim. Harbor Global’s indemnification obligations to Pioneer in connection with the Ashanti purchase agreement are capped at the amount of the total purchase price paid by Ashanti to Pioglobal Goldfields II under the purchase agreement.

Additionally, under a tax separation agreement between Harbor Global and Pioneer, generally, Harbor Global has agreed to indemnify Pioneer for tax liabilities relating to the Harbor Global businesses. Currently, there are no suits pending that would require payment by Harbor Global to Pioneer under the indemnification provisions of the Distribution Agreement or tax separation agreement. However, Harbor Global cannot provide assurances that no legal proceeding or other claim will occur that would require Harbor Global to indemnify Pioneer. Furthermore, Harbor Global and its subsidiaries may be subject to legal proceedings or other claims arising in the ordinary course of business, including employment related claims, environmental claims and regulatory fees or fines associated with its international operations.

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AS A RESULT OF HOLDING HARBOR GLOBAL COMMON SHARES, HARBOR GLOBAL’S SHAREHOLDERS MAY RECOGNIZE TAXABLE INCOME AND BE REQUIRED TO PAY TAX WITHOUT A CORRESPONDING DISTRIBUTION OF CASH FROM HARBOR GLOBAL TO ITS SHAREHOLDERS.

For United States federal income tax purposes, Harbor Global is treated as a partnership. For United States federal income tax purposes, Harbor Global’s shareholders will be treated as partners in a Bermuda partnership and their Harbor Global common shares will represent partnership interests. Because of its classification as a partnership for United States federal income tax purposes, Harbor Global is not itself subject to United States federal income tax. Instead, items of income, gain, loss, deduction and expense will flow through to Harbor Global’s shareholders, and they will be required to include their allocable share of these items in computing their own United States federal income tax for each taxable year of Harbor Global. Cash distributions made by Harbor Global to its shareholders generally will not be taxable, except to the extent that those distributions exceed a shareholder’s adjusted tax basis in the Harbor Global common shares.

Harbor Global believes that one or more of its foreign subsidiaries of Harbor Global may be classified as a foreign personal holding company or passive foreign investment company for United States federal income tax purposes. If any such subsidiary is classified as a foreign personal holding company or passive foreign investment company, Harbor Global’s shareholders may be required to recognize taxable income and pay tax with respect to a portion of the subsidiary’s income, even in the absence of the receipt of any payment of cash or other property from the subsidiary. The tax rules regarding foreign partnerships, foreign personal holding companies and passive foreign investment companies are complicated. Harbor Global’s shareholders should consult their tax advisors to determine the tax consequences to them of holding Harbor Global common shares.

HARBOR GLOBAL WILL BE SUBJECT TO SIGNIFICANT RESTRICTIONS IF IT BECOMES AN INVESTMENT COMPANY.

Harbor Global intends to conduct its businesses and operations so as to avoid being required to register as an investment company. If, nevertheless, Harbor Global were to be required to register as an investment company, because Harbor Global is a foreign company, the Investment Company Act of 1940 would prohibit Harbor Global and any person deemed to be an underwriter of Harbor Global’s securities from offering for sale, selling or delivering after sale, in connection with a public offering, any security issued by Harbor Global in the United States.

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RECENT PRONOUNCEMENTS OF THE FINANCIAL ACCOUNTING STANDARDS BOARD

The Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets” effective January 1, 2002. SFAS No. 142 requires that goodwill not be amortized but rather be tested for impairment at least annually at the reporting unit level. For the years ended December 31, 2001 and 2000, the Company recorded approximately $286,000 and $285,000, respectively, of goodwill expense. The Company no longer amortizes goodwill. There was no transitional adjustment resulting from the intangible asset impairment test. The following table reflects the adoption of SFAS No. 142 for the years ended December 31, 2002, 2001 and 2000.

The Company adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which is effective January 1, 2002. SFAS No. 144 supersedes Statement No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accounting and reporting provisions relating to the disposal of a segment of a business of Accounting Principles Board Opinion No. 30. The adoption of SFAS No. 144 did not have a material impact on the Company’s financial statements.

The Company adopted Emerging Issues Task Force (“EITF”) Issue 01-14, “Income Statement Characterization of Reimbursements Received for “Out-of-Pocket” Expenses Incurred,” which states that reimbursements received for out-of-pocket expenses incurred should be reported as revenue in the Statement of Earnings. The adoption of EITF Issue 01-14 did not have an impact on the Company’s financial statements.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Harbor Global monitors its exposure to adverse changes in interest rates, foreign currency exchange rates and market fluctuations.

The Company’s interest rate risk involves the short-term investment of excess cash. This risk impacts fair values, earnings and cash flows. Excess cash is primarily invested in foreign government bonds and United States treasury bills. These short-term investments are reported either as cash and cash equivalents or marketable securities. The balance of such securities at December 31, 2002 and 2001 was approximately $4.6 million and $2.0 million, respectively, of cash and cash equivalents and $10.1 million and $26.3 million, respectively, of marketable securities. Earnings from excess cash invested were approximately $0.6 million and $2.4 million for the year ended December 31, 2002 and 2001, respectively. Based on excess cash invested at December 31, 2002, a one percent increase or decrease in current market interest rates would have the effect of causing an approximately $0.1 million additional pre-tax credit or charge to the Statement of Earnings.

Harbor Global is exposed to certain changes in foreign currency exchange rates, primarily as a result of its operations in Russia. Due to the hyperinflationary economy in Russia, the United States dollar (the Company’s reporting currency) has been designated as the Company’s functional currency. Translation gains and losses that result from remeasuring into the United States dollar are included in the statements of operations. To mitigate

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against currency translation risk, the Company primarily transacts in United States dollars by contracting for most of its costs and revenues in United States dollars. This acts as a natural hedge to protect against currency fluctuations from the Company’s operations.

The Russian ruble is not a fully convertible currency outside of the territory of Russia. The translation of ruble denominated assets and liabilities into United States dollars for the purpose of these financial statements does not indicate that the Company could realize or settle in United States dollars the reported values of these assets and liabilities. The Company reports all of its non monetary assets and liabilities held in Russia at historical exchange rates, and any fluctuation in foreign exchange rates would not have any impact on reported non monetary assets and liabilities.

The table below sets forth in the Company’s reporting currency a summary of the monetary assets and liabilities held in rubles at December 31, 2002 and 2001.

The Company indirectly invests in equity instruments of privately-held companies through its approximately 52% interest in the PIOGLOBAL Investment Fund and its approximately 8% interest in the Prospect Poland Fund. Investments in privately held companies by the PIOGLOBAL Investment Fund are recorded at cost in long-term investments. With respect to the Company’s limited partnership interest in the Prospect Poland Fund, such interests are recorded in Polish Venture Capital Investment using the equity method of accounting. The Company is exposed to market risk as it relates to the market value of its indirect investments in privately held companies. In this connection, the carrying value of the Company’s interest in the Prospect Poland Fund has been written-down by approximately $0.4 million to approximately $0.8 million in 2002 and by approximately $1.3 million to approximately $1.2 million in 2001.

The PIOGLOBAL Investment Fund is also invested in equity instruments of public companies, which are classified as available-for-sale pursuant to SFAS 115. Those publicly traded equity investments that have evinced a sufficient breadth and scope of market activity are valued based on the quoted price for such securities according to the Russian Trading System and are recorded in long-term marketable securities. Otherwise, the investments are recorded in long-term investments at a fair value equivalent to its original cost basis. These available-for-sale equity investments, primarily in oil and gas, energy companies and the telecommunications industry, are subject to significant fluctuations in fair value due to the volatility of the stock market and the industries in which these companies participate. As of December 31, 2002 and 2001, the fair value of equity investments contained in long-term marketable securities aggregated $19.0 million and $18.8 million, respectively. As a result, the Company recorded unrealized gains after deferred taxes and after minority interest

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of $3.9 million and $3.3 million at December 31 2002 and 2001, respectively, as a separate component of stockholder’s equity. Although the breadth of industries represented on the Russian Trading System is severely limited, the Company attempts to manage its exposure to stock market fluctuations and minimize the impact of stock market declines to the Company’s earnings and cash flow by increased diversification of the portfolio.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Company’s financial statements required by Item 8 are submitted as a separate section beginning on page F-1 at the end of this Annual Report on Form 10-K.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

DIRECTORS

Mr. Cogan was elected for a four-year term commencing in October 2001 and expiring at the Company’s annual general meeting immediately following the fifth anniversary of the Spin-off. All other directors were elected for a five year term commencing in June 2000 and expiring at the annual general meeting immediately following the fifth anniversary of the Spin-off.

JOHN F. COGAN, JR. has been a Director of Harbor Global since October 2001. Mr. Cogan is Deputy Chairman and Director of Pioneer Global Asset Management S.p.A. He is also Chairman of the Board and a Director of Pioneer Investment Management USA Inc. and a Director of Pioneer Investment Management, Inc., Chairman and President of the Pioneer Group of Mutual Funds, a Director of Pioneer Alternative Investments Limited, Chairman and Director of Momentum Asset Management Limited and its affiliates and Chairman of the Supervisory Board of Pioneer Czech Investment Company. Mr. Cogan has been a Director of PIOGLOBAL Investment Fund since 1995. From 1963 to October 24, 2000, he was President, Chief Executive Officer and a Director of Pioneer. From 1978 to 1980, he was Chairman of the Investment Company Institute (“ICI”) and is currently a member of the Board of Governors of the ICI. From 1983 to 1986, Mr. Cogan was a member of the Board of Governors of the National Association of Securities Dealers, Inc. and its Legal Advisory board from 1988 through 1994. From 1987 to 1994, he was Chairman of ICI Mutual Insurance Company and currently is a Director. Mr. Cogan is Of Counsel at Hale and Dorr LLP, Boston, Massachusetts.

JOHN D. CURTIN, JR. has been a Director of Harbor Global since June 2000. Mr. Curtin served as a Director of Pioneer from February 2000 to October 2000. From 1995 to 1998, Mr. Curtin was the Chairman, President and Chief Executive Officer of Aearo Corporation, a provider of personal safety equipment. Prior to 1995, Mr. Curtin was the Executive Vice President and Chief Financial Officer of Cabot Corporation, a global specialty chemicals and materials company. Mr. Curtin serves as a Director of Aearo Corporation, Hamilton Thorne Bio Sciences Inc. and Nano-C, LLC.

W. REID SANDERS has been a Director of Harbor Global since June 2000. Mr. Sanders served as a Director of Pioneer from February 2000 to October 2000. Prior to retiring in 1999, Mr. Sanders was a Director

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and Executive Vice President of Southeastern Asset Management, Inc., an investment management firm that he co-founded in 1975. He also served as President of the Longleaf Partners Mutual Funds. In addition, Mr. Sanders serves as a Trustee of The Hugo Dixon Foundation and Rhodes College, Trustee and member of the Executive Committee of the Dixon Gallery and Gardens and Vice Chairman and member of the Board of Trustees of the Hutchinson School.

JOHN H. VALENTINE has been a Director of Harbor Global since June 2000. Mr. Valentine served as a Director of Pioneer from 1985 to October 2000. Mr. Valentine is a Trustee of Boston Medical Center and formerly served as Vice Chairman of the Board of Directors and Treasurer of that institution. He is also Director of Entrepreneurial Management at Boston University Health Policy Institute. From 1980 to 1990, Mr. Valentine was a consultant to T.A. Associates, a manager of venture capital. From 1972 to 1975, Mr. Valentine was a partner of Tucker Anthony & R.L. Day, a member of the New York Stock Exchange. Mr. Valentine is a member of the Advisory Committees of the Thompson Island Outward Bound Education Center and was a Trustee of that institution. In addition, Mr. Valentine is a member of the Advisory Committee of Phontonics Laboratory at Boston University.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company does not have a Compensation Committee or other board committee performing similar functions. All decisions regarding compensation were made by the Company’s Board of Directors.

EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table sets forth information concerning the individuals who are executive officers of Harbor Global. Each individual has been elected to the office indicated and serves at the discretion of the Harbor Global Board of Directors.

* Effective as of December 31, 2002, Catherine V. Mannick is no longer an officer of the Company or an employee of Calypso Management.

STEPHEN G. KASNET has been the President and Chief Executive Officer of Harbor Global since June 2000 and has been President of PREA, L.L.C. since 1996. From 1998 to 2000, Mr. Kasnet was Executive Vice President of Pioneer and the President of Pioneer Global Investments, a division of Pioneer. From 1995 to 1998, Mr. Kasnet was a Vice President of Pioneer. Mr. Kasnet served as a Managing Director of First Winthrop Corporation and Winthrop Financial Associates. Mr. Kasnet serves as a Director of Pioglobal Asset Management and PIOGLOBAL Investment Fund. He is also President of Pioglobal Omega, PIOGlobal Corporation and Pioneer First Russia, Inc. In addition, Mr. Kasnet serves as a Director of Rubicon Limited and FTD, Inc. Mr. Kasnet served as Chairman of the Board of Directors of Warren Bancorp and Warren Five Cents Savings Bank from 1986 to 2002. Mr. Kasnet has served as President and Chief Executive Officer for Calypso Management since June 2000.

DONALD H. HUNTER has been Chief Operating Officer and Chief Financial Officer of Harbor Global since June 2000. From 1998 to 2000, Mr. Hunter was the Senior Vice President and Chief Operating Officer of Pioneer Global Investments, a division of Pioneer. From 1992 to 1998, Mr. Hunter was the Manager of International Finance at Pioneer. Prior to 1992, Mr. Hunter served in various finance roles at Pioneer and General Electric Company. Mr. Hunter serves as a Director of PIOGLOBAL Investment Fund. He is Vice President and Treasurer of Pioglobal Omega, PIOGlobal Corporation, Pioneer First Russia, Inc. and PREA L.L.C. Mr. Hunter has served as Chief Operating Officer, Chief Financial Officer and Treasurer for Calypso Management since June 2000.

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CATHERINE V. MANNICK was Senior Vice President and General Counsel of Harbor Global from July 2000 to December 31, 2002. From 1996 to 2000, Ms. Mannick served as Assistant General Counsel of Pioneer, during which time she oversaw Pioneer’s Russian legal matters. From 1998 to 2000 she was a Vice President of Pioneer. From 1991 to 1996, Ms. Mannick was Of Counsel at Hale and Dorr LLP in the firm’s corporate department. Ms. Mannick was Secretary of Pioglobal Omega, PIOGlobal Corporation and Pioneer First Russia, Inc. Ms. Mannick served as Secretary for Calypso Management from June 2000 to December 31, 2002 and as Executive Vice President of Calypso Management from October 2000 to December 31, 2002.

ITEM 11.    EXECUTIVE COMPENSATION.

Compensation of Directors

Each Harbor Global director is entitled to receive $20,000 annually as compensation for serving on the Harbor Global Board of Directors. This annual compensation assumes the Board of Directors will meet four times annually and may be increased in the event of more frequent meetings. In addition, directors of Harbor Global are entitled to be reimbursed for out of pocket expenses incurred in connection with attendance at any meeting of the Board of Directors or any committee meeting of the Board of Directors. All directors were paid $20,000 in director’s fees in 2002.

On November 2, 2000, the Board of Directors of Harbor Global approved the adoption of the Harbor Global Company Ltd. Non-employee Director Share Plan in accordance with the approval obtained from Pioneer, the Company’s sole shareholder, on October 23, 2000. Pursuant to the plan, on each anniversary of October 24, 2000, the Spin-off date, each director of the Company who is not an employee will be granted 1,500 common shares in consideration of each non-employee director’s future services as a director. The plan became effective upon adoption by the board and will terminate upon the earlier of (i) October 24, 2005, (ii) the grant of all of the common shares reserved for issuance under the plan or (iii) the termination of the plan by the board in accordance with the terms of the plan. During fiscal year 2002, each director received 1,500 common shares pursuant to the plan.

Compensation of Executive Officers

Although Mr. Kasnet, Mr. Hunter and Ms. Mannick are executive officers of Harbor Global, Harbor Global does not directly pay compensation to these individuals. Instead, the administration and liquidation agreement between Harbor Global and Calypso Management provides that Harbor Global will pay the operating expenses of Calypso Management, including compensation of Mr. Kasnet, Mr. Hunter and Ms. Mannick.

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The following table sets forth information regarding compensation earned by the Chief Executive Officer and other executive officers of the Company during fiscal years 2002, 2001 and 2000. Although Mr. Kasnet, Mr. Hunter and Ms. Mannick became executive officers of Harbor Global beginning in June 2000, June 2000 and July 2000, respectively, they were also employees of Pioneer through October 24, 2000 and thus were compensated by Pioneer through October 24, 2000. Therefore, the information set forth below includes compensation earned by the listed individuals as employees of Pioneer from January 1, 2000 through October 24, 2000 and as employees of Calypso Management from October 25, 2000 through December 31, 2002. The information set forth below includes compensation earned by the listed individuals as employees of Pioneer from January 1, 2000 through October 24, 2000 and as employees of Calypso Management from October 25, 2000 through December 31, 2002.

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During fiscal year 2000, Mr. Kasnet exercised options to purchase 142,500 shares of Pioneer common stock for an aggregate realized value of $6,228,832.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table presents the number of shares of Harbor Global common stock beneficially owned as of March 1, 2003, unless otherwise indicated, by:

—each person or entity known by Harbor Global to own more than five percent of its issued and outstanding common shares;

—each director of Harbor Global;

—each of the executive officers of Harbor Global; and

—all directors and officers of Harbor Global as a group.

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Unless otherwise indicated, each person or entity has sole voting and investment power with respect to the shares listed opposite such person’s or entity’s name. Unless otherwise indicated, the percentages set forth below are based upon a total of 5,655,311 common shares outstanding as of March 1, 2003.

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Securities Authorized for Issuance Under Equity Compensation Plans.    The following table sets forth information as of December 31, 2002 with respect to compensation plans under which equity securities of the Company are authorized for issuance.

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ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On August 7, 2000, Harbor Global entered into an administration and liquidation agreement with Calypso Management pursuant to which Calypso Management manages the liquidation of Harbor Global and operates Harbor Global’s assets pending their liquidation. Calypso Management is owned and operated by Mr. Kasnet and Mr. Hunter. Mr. Kasnet is the President and Chief Executive Officer and Mr. Hunter is the Chief Operating Officer and Chief Financial Officer of Calypso Management. Calypso Management performs its services pursuant to operating plans and budgets approved by the Harbor Global Board of Directors in accordance with the administration and liquidation agreement. In addition, key employees of Calypso Management perform their services as officers of Harbor Global under the supervision of the Harbor Global Board of Directors.

The administration and liquidation agreement provides that Harbor Global pays the operating expenses of Calypso Management incurred in connection with the provision of services to Harbor Global. These operating expenses include annual salaries for Mr. Kasnet and Mr. Hunter of $325,000 and $250,000, respectively, plus annual bonuses of up to 100% of such base salary, depending upon the achievement of performance goals established by the Harbor Global Board of Directors. The operating expenses include the annual salaries of Ms. Mannick and other employees of Calypso Management. Calypso Management provides the services of Mr. Kasnet, Mr. Hunter and Ms. Mannick and other employees to act as officers and employees of Harbor Global. The provision of services to Harbor Global by Calypso Management, Mr. Kasnet and Mr. Hunter is exclusive, and Calypso Management, Mr. Kasnet and Mr. Hunter do not render services to other persons or entities without the prior written consent of the Harbor Global Board of Directors.

As compensation for its provision of services to Harbor Global, Calypso Management receives a portion of the net proceeds distributed from the liquidation of Harbor Global’s assets, generally according to the following schedule:

—with respect to the first $36 million in net proceeds to be distributed, Calypso Management shall receive a payment equal to 10% of such net proceeds;

—with respect to the next $72 million in net proceeds to be distributed, Calypso Management shall receive a payment equal to 7.5% of such net proceeds; and

—with respect to any additional net proceeds to be distributed, Calypso Management shall receive a payment equal to 10% of such net proceeds.

Net proceeds do not include any unexpended portion of the $19.1 million contributed by Pioneer to Harbor Global. However, pursuant to Amendment 2 dated as of February 1, 2001 to the administration and liquidation agreement, if Harbor Global entered into a transaction in which it was released or otherwise relieved of its indirect obligation to fulfill its existing capital commitment of approximately $5.4 million to the Pioneer Polish Real Estate Fund, the amount that otherwise would have been expended by Harbor Global to satisfy such capital commitment is included in the calculation of net proceeds. In addition, the proceeds received by Pioneer Goldfields II in connection with the sale of its Ghanaian gold mine to Ashanti are not subject to the preceding schedule. Instead, Calypso Management will receive only 5% of the Ashanti proceeds that are distributed, if any.

The administration and liquidation agreement has a term ending upon the liquidation of Harbor Global, but may be terminated by Calypso Management upon 120 days prior written notice to Harbor Global after October 24, 2002 or by Harbor Global upon 120 days prior written notice to Calypso Management after April 24, 2004. In addition, Harbor Global may terminate the agreement in the event of:

—Mr. Kasnet’s death or disability or other termination of his employment with Calypso Management;

—an uncured failure by Calypso Management to follow a reasonable direction of the Harbor Global Board of Directors;

—a material breach by Mr. Kasnet of his employment agreement with Calypso Management; or

—an act by Calypso Management in connection with its services to Harbor Global constituting bad faith, fraud or willful misconduct.

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Calypso Management is not entitled to the payments described above following a termination of the agreement. As part of the administration and liquidation agreement, Calypso Management has agreed to customary confidentiality and non-competition covenants with respect to Harbor Global.

In addition, in accordance with the administration and liquidation agreement Harbor Global paid a $1.8 million signing and retention bonus to Mr. Kasnet on October 24, 2002.

Mr. Kasnet and Mr. Hunter each entered into employment agreements with Calypso Management as of August 8, 2000. The employment agreements provide for salaries and bonuses as described above in connection with the administration and liquidation agreement. Mr. Kasnet’s employment may be terminated by Mr. Kasnet upon 120 days prior written notice to Calypso Management and Harbor Global after October 24, 2002. The employment agreement provides that Mr. Kasnet will be entitled to receive 50% of the amounts paid by Harbor Global to Calypso Management from the liquidation of Harbor Global’s assets. However, Mr. Kasnet’s allocation percentage is reduced to 33 ¹/3% of amounts paid by Harbor Global to Calypso Management with respect to distributions of more than $36 million in the aggregate and up to $108 million in the aggregate. Calypso Management, at the direction of the Harbor Global Board of Directors, may terminate Mr. Kasnet in the event he:

—materially breaches the employment agreement or the administration and liquidation agreement;

—is convicted of a felony;

—fails to follow a reasonable direction of the Harbor Global board of directors; or

—becomes disabled.

Mr. Hunter’s employment agreement provides that Mr. Hunter’s employment with Calypso Management is at will, subject to termination by either Calypso Management or Mr. Hunter upon 60 days prior written notice. The employment agreement provides that Mr. Hunter is entitled to receive 30% of the amounts paid by Harbor Global to Calypso Management from the liquidation of Harbor Global’s assets.

PART IV

ITEM 14.    CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.    The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of a date within 90 days prior to the filing date of this Form 10-K (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s reports filed or submitted under the Securities Exchange Act of 1934.

Changes in Internal Controls.    There have not been any significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

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ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) The following documents are included as part of this Form 10-K.

1.    FINANCIAL STATEMENTS:

Reference is made to the Report of Independent Public Accountants, the Consolidated Financial Statements, the Notes to Consolidated Financial Statements included in this Form 10-K at pages F-1 through F-23.

2.    FINANCIAL STATEMENT SCHEDULES:

Financial statement schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or the Notes to Consolidate Financial Statements thereto.

3.    EXHIBITS:

The exhibits filed with or incorporated into this Form 10-K are listed on the “Index to Exhibits” below.

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INDEX TO EXHIBITS

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(b) Reports on Form 8-K

On December 30, 2002 Harbor Global filed a Current Report on Form 8-K reporting the purchase by Pioglobal Omega of the IFC’s minority interest in Pioneer First Russia under Item 5, Other Events.

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SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

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CERTIFICATIONS

I, Stephen G. Kasnet, Chief Executive Officer of the Company, certify that:

1.    I have reviewed this annual report on Form 10-K of Harbor Global Company Ltd.;

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.    The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)    evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c)    presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.    The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:    March 11, 2003

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CERTIFICATIONS

I, Donald H. Hunter, Chief Financial Officer of the Company, certify that:

1.    I have reviewed this annual report on Form 10-K of Harbor Global Company Ltd.;

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.    The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)    evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c)    presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.    The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:    March 11, 2003

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HARBOR GLOBAL COMPANY LTD.

INDEX TO FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Stockholders of

Harbor Global Company Limited

Boston, MA

We have audited the accompanying consolidated balance sheets of Harbor Global Company Limited (a Bermuda limited duration company) (the “Company”) and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of earnings, stockholders’ equity, and cash flows for the three years ended December 31, 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2002 and 2001, and the results of its operations and its cash flows for the three years ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1, in 2002 the Company adopted the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets”.

/s/    DELOITTE & TOUCHE LLP

January 24, 2003

F-1

HARBOR GLOBAL COMPANY LTD.

CONSOLIDATED STATEMENTS OF EARNINGS

For The Years Ended December 31, 2002, 2001 and 2000