Financial Crime World

Beneficial Owners and Registrable Legal Entities: What You Need to Know

The British Virgin Islands (BVI) has introduced new regulations requiring companies to disclose their beneficial owners and registrable legal entities. These changes aim to combat money laundering and terrorist financing by providing greater transparency over company ownership.

Who is a Beneficial Owner?

A beneficial owner is defined as the natural person who ultimately owns or controls an entity. This includes individuals who own or control 25% or more of the shares or voting rights in a legal person, or those who exercise control over the management of that legal person.

  • Partnerships: The beneficial owner is typically the partner or partners who control the partnership.
  • Trusts: The beneficial owner is usually the trustee or controller of the trust, or the settlor of the arrangement.
  • Other types of legal arrangements: The definition also applies to other types of legal arrangements, where the beneficial owner is typically the person with ultimate control.

A registrable legal entity (RLE) is an entity that is considered to have no further beneficial owners. This includes:

  • Entities listed on a public securities exchange
  • Banks
  • Insurance companies

RLEs do not need to disclose their beneficial owners, but must still provide information about their structure and ownership.

How Do These Regulations Affect You?

If you are a company incorporated in the BVI or a foreign company with operations in the territory, these regulations apply to you. You will need to:

  • Identify your beneficial owners
  • Identify any RLEs within your organization
  • Disclose this information to your registered agent (RA) within 15 days of being notified of any changes

Failure to comply with these regulations can result in significant penalties, including fines up to US$250,000 and imprisonment for up to five years.

How is Your Information Stored?

Your company’s beneficial ownership information will be stored on a secure encrypted system maintained by your RA. This information will be kept for five years after your company dissolves or ceases to exist as a corporate entity.

  • The system has robust procedural safeguards to ensure the security and integrity of your data.
  • Only designated persons with access to the system can search for information, and this can only be done in compliance with applicable law or in response to a valid request from a government agency.

If you have any questions about these regulations or need guidance on how to comply, please contact [Your Firm’s Name] for advice.