Corporate Service Provider Business Act 2012 (Draft Bill)

Summary

This is a draft bill (with explanatory notes) proposing a new licensing and supervision regime for corporate service provider business in Bermuda, to be administered by the Bermuda Monetary Authority. It is a consultation draft, not yet enacted law, and sets out how the Authority would license, supervise, discipline and obtain information from firms providing company/partnership formation, registered office, nominee director/secretary, resident representative and similar administrative services for profit.

• Licensing: Prohibits carrying on corporate service provider business in or from Bermuda without a licence from the Authority, subject to criminal penalties for contravention (up to $100,000 fine or five years imprisonment on indictment).
• Applications: Requires applicants to submit a business plan, management arrangements, AML/ATF policies and procedures, an application fee, and to satisfy minimum criteria set out in Schedule 1 (fit and proper controllers/officers, board composition, prudent and reputable conduct).
• Controllers: Requires notification to the Authority of new or increased shareholder control, and gives the Authority power to object to controllers.
• Ongoing compliance: Requires licensees to display and register their licence, pay an annual licence fee, have regard to codes of practice issued by the Authority, notify changes of controller or officer, obtain certificates of compliance, and file annual and prudential returns.
• Disciplinary powers: Gives the Authority power to impose civil penalties, issue public censures, make prohibition orders, restrict or revoke licences, and seek injunctions or winding up for non compliant licensees.
• Information and investigation powers: Gives the Authority powers to obtain information/reports, require production of documents, enter premises, and conduct investigations of suspected contraventions, alongside restrictions on disclosure of information obtained.
• Consequential amendments: Proposes amendments to the Bermuda Monetary Authority Act 1969, Companies Act 1981, Exchange Control Regulations 1973, Exempted Partnerships Act 1992, Limited Partnership Act 1883, Government Authorities (Fees) Act 1971, and the Proceeds of Crime and Anti-Terrorism financial legislation to align them with the new regime.
• Transitional relief: Allows persons already carrying on corporate service provider business to continue without a licence for one year after commencement, provided they apply for a licence within that 12 month period.

As a draft bill under consultation, none of these provisions are yet in force; commencement would occur on a date (or dates, for different provisions) appointed by the Minister by notice in the Gazette. Compliance officers at firms performing company formation, registered office, nominee, resident representative or corporate administrative services in Bermuda should monitor this bill's progress toward enactment.

Key obligations

• Persons must not carry on corporate service provider business in or from within Bermuda without a licence issued by the Authority once the Act is in force
• Licence applicants must submit a business plan, management arrangements, AML/ATF policies and procedures, and an application fee, and must satisfy the minimum criteria in Schedule 1
• Licensees must display and register their licence and pay an annual licence fee
• Licensees must notify the Authority of any new or increased shareholder control and of any change of controller or officer
• Licensees must file annual returns and prudential/other returns as required under Part 8
• Licensees must have regard to any code of practice issued by the Authority in conducting their business
• Persons already carrying on corporate service provider business at commencement may continue without a licence for up to one year but must apply for a licence within that 12 month transitional period
• Notices or documents required to be given to the Authority are not treated as served until actually received by the Authority

Applies to

corporate service providers, company formation agents, nominee shareholders, registered office and administrative service providers, resident representatives, licensed undertakings under the Act

Deadlines

• one year after commencement of the Act: Persons already carrying on corporate service provider business may continue without a licence during this period, but must apply for a licence within these 12 months
• such day as the Minister may appoint by notice in the Gazette: Commencement date(s) of the Act (different provisions may commence on different days)

Related documents

• This document amends Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008
• This document amends Bermuda Monetary Authority Act 1969
• This document amends Companies Act 1981