Financial Crime World

Bermuda Strengthens Beneficial Ownership Requirements

In an effort to meet international transparency standards, Bermuda has expanded its legal requirements for disclosing beneficial owners of corporate and legal entities.

Key Changes

The revised legislation requires companies and partnerships to establish and maintain a beneficial ownership register at their registered office. This register must contain “minimum required information” about any individual who is a beneficial owner of the company and all relevant legal entities that exist in relation to the company.

What Companies Must Do

  • Establish and maintain a beneficial ownership register
  • Take reasonable steps to identify and record beneficial ownership information
  • Issue notices to known beneficial owners, relevant legal entities, or persons believed to be registrable
  • Update the register whenever there are changes to registrable persons

Exemptions

Certain companies are exempt from the requirement to keep a beneficial ownership register, including:

Exempt Companies

  • Companies listed on the Bermuda stock exchange
  • Closed-ended investment vehicles managed by licensed entities
  • Permit companies
  • Financial institutions

Definition of Beneficial Owner

For the purposes of the Act, a beneficial owner is defined as any individual or individuals who own or control more than 25% of the shares, voting rights, or interests in the company through direct or indirect ownership.

Maintenance of the Register

The beneficial ownership register must be maintained at the company’s registered office and updated whenever there are changes to registrable persons. Companies have 14 days to notify the Bermuda Monetary Authority (BMA) of any changes to beneficial ownership information.

Filing with the Regulator

Companies must file minimum required information with the BMA, which will maintain a central register of beneficial owners. This includes providing initial application information for new companies and notification of changes in beneficial ownership.

Penalties for Non-Compliance

Significant penalties apply for non-compliance, including fines ranging from $5,000 to $50,000 for knowingly providing false information. Officers found guilty of non-compliance may also face personal liability.

Key Dates

  • March 23, 2018: Key legislative amendments came into effect
  • Within six months: Companies and partnerships must establish beneficial ownership registers