Bermuda Strengthens Beneficial Ownership Transparency Requirements
As part of its efforts to meet international standards for transparency and combat financial crime, Bermuda has introduced new legislation requiring companies registered in the jurisdiction to obtain and maintain information regarding their beneficial owners. This move aims to enhance the integrity of the country’s corporate registry and ensure compliance with global best practices.
New Legislation: Key Highlights
As of March 23, 2018, all non-exempted Bermuda companies are required to establish and maintain a beneficial ownership register at their registered office or at such other place convenient for inspection by the Registrar of Companies. Information regarding beneficial owners must also be filed with the Bermuda Monetary Authority (BMA).
Exemptions from the Legislation
The following types of companies and entities are exempt from the new legislation:
- A Bermuda company whose shares are listed on the Bermuda Stock Exchange or an overseas stock exchange designated by the Minister of Finance.
- A closed-ended investment vehicle managed or administered by a person licensed under the Investment Business Act, 2003 or the Investment Funds Act, 2006 or registered, authorised or licensed by a foreign regulator recognised by the BMA.
- An overseas company.
- An open-ended investment fund, investment provider, fund administrator, trust company and corporate service provider.
- Any other type of company or entity that is exempted by the Minister by order made by him.
Identification and Notification of Beneficial Owners
Unless exempt, each non-exempted company must take reasonable steps to identify any individual who is a beneficial owner of the company and all relevant legal entities in relation to the company. This includes issuing a written notice to any person that the company knows or has reasonable cause to believe is a registrable person.
The notice must require the person to whom it is addressed, within 30 days of receipt, to state whether or not he or she should be included in the beneficial ownership register of the company and, if so, to confirm or correct any information that is included in the notice and supply any required information that is missing.
Significant Penalties for Non-Compliance
Significant penalties apply for non-compliance with the beneficial ownership legislation. Where a company is guilty of an offence, and it is proved that the offence was committed with consent or connivance of an officer of the company, the officer as well as the company is guilty of the same offence and liable to the same penalty as the company. Both criminal and civil penalties are applicable, and potential fines to be imposed range from BMD$5,000 for failing to comply with the requirements of the legislation up to BMD$50,000 for knowingly providing false information.
Defence against Non-Compliance
It is a defence for the company and/or officer to show that they took reasonable steps to identify beneficial owners for the purposes of the legislation.