beneficial ownership

Who is caught

Beneficial ownership obligations in Bermuda arise under several distinct instruments rather than a single code, and the population caught depends on which instrument applies. The core company-law duty sits in Part VIA of the Companies Act 1981, while parallel duties attach through the exchange control regime, the corporate service provider (CSP) framework, the AML/ATF regime, and insurance controller rules.

• Bermuda companies: Under Part VIA of the Companies Act 1981, local, exempted, overseas (permit), mutual and mutual fund companies must identify and maintain information on their beneficial owners.
• Permit companies: Under the Exchange Control Regulations 1973 and the Corporate Service Provider Business Amendment Act 2014, permit companies are subject to beneficial ownership duties keyed to a 10% ownership threshold.
• Corporate service providers: CSPs licensed under the Corporate Service Provider Business Act 2012 act as gatekeepers and, as AML/ATF regulated financial institutions, must identify and verify beneficial owners of clients.
• AML/ATF regulated persons: Financial institutions, independent professionals, trust businesses, the securities sector and other regulated persons must identify beneficial owners as part of customer due diligence under the Proceeds of Crime (AML/ATF) Regulations 2008 and sector guidance.
• Insurers and their controllers: Registered insurers and their shareholder controllers and beneficial owners are subject to notification and personal declaration requirements under the Insurance Act 1978.
• Individual beneficial owners: Natural persons proposing to act as a beneficial owner or shareholder controller of a Bermuda entity must complete a Personal Declaration Form, and beneficial owners themselves carry notification duties under certain instruments.

Sources: Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 · Corporate Service Provider Business Amendment Act 2014 · Companies Act 1981 · Exchange Control Regulations 1973 · Annex I - Sector-Specific Guidance Notes for Trust Business (2022 Guidance Notes for AML/ATF Regulated Financial Institutions) · Annex III - Sector-Specific Guidance Notes for the Securities Sector (2022) · Guidance Notes - Assessment of Shareholder Controllers and Controllers (September 2014) · Personal Declaration Form for Beneficial Owners or Shareholder Controllers (2025 Version) · Notice - Corporate Service Provider (Beneficial Owner) Regulations 2012 (2012-12-21)

Key duties

Company register and filing

• Part VIA duties: Companies must identify their beneficial owners, obtain and keep that information current, maintain a beneficial ownership register, and file beneficial ownership information with the Bermuda Monetary Authority, complying with any compliance measures or restriction notices issued.

Exchange control and permit companies

• Continuing 10% duty: Permit companies have a continuing duty under the Exchange Control Regulations 1973 to keep beneficial ownership information current for individuals who ultimately own 10% or more of shares, voting rights or interests.
• 14-day notification: Under the Corporate Service Provider Business Amendment Act 2014, a permit company must inform the Controller within 14 days of a transfer of beneficial ownership that causes a beneficial owner to reach a 10% or greater threshold. This notification amendment is stated to be deemed in force from 31 December 2013.
• Controller permission: Under the Exchange Control Regulations 1973, permission of the Controller of Foreign Exchange is generally required before transferring beneficial ownership in permit companies.

CSP gatekeeping and vetting

• Registration gatekeeping: Under the Corporate Service Provider Business (Beneficial Ownership) Regulations 2017, a CSP maintaining a register must not register share or coupon transfers, general partner appointments or LLC member admissions unless the underlying notification required under the Exchange Control Regulations 1973, the Limited Partnership Act 1883, the Exempted Partnerships Act 1992 or the Limited Liability Company Act 2016 has been made.
• Beneficial owner vetting: Under the 2017 gatekeeper guidance, CSPs must maintain detailed vetting procedures for beneficial owners holding 10% or more in a Bermuda entity, including a personal declaration, and assess fitness and propriety with an escalation process for adverse findings.
• Nominee agreements: Where a CSP acts as or arranges a nominee shareholder, it must obtain and retain a written nominee agreement identifying the beneficial owner (CSP Codes of Practice and Guidance Notes).
• Draft 2012 BO regulations: The Corporate Service Provider (Beneficial Owner) Regulations 2012, circulated in draft, would require CSPs to ascertain and record beneficial owners of clients and would require a beneficial owner to notify the CSP within 28 days of any change; as summarised these were in draft form with commencement unspecified.

AML/ATF customer due diligence

• Identify and verify: Under the Proceeds of Crime (AML/ATF) Regulations 2008, relevant persons must identify and verify beneficial owners and understand ownership and control structures as part of customer due diligence, generally using a 25% ownership or control threshold, reduced to 10% for corporate service providers.
• Sector application: Sector guidance for CSPs, trust business and the securities sector applies these beneficial ownership identification and verification duties to their particular structures, including settlors, protectors and beneficiaries in the trust context.

Insurance and personal declarations

• Controller notifications: Under the Insurance Act 1978, shareholder controllers must notify the Authority on reaching 10%, 20%, 33% or 50% thresholds (before, for private insurers, or within 45 days, for public insurers), and registered insurers must notify controller changes under Section 30J.
• Personal Declaration Form: Each individual proposing to act as a beneficial owner or shareholder controller must complete and sign a Personal Declaration Form; a completed declaration is valid for three years, and the current INTEGRA version bearing the BMA logo must be used.

Sources: Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 · Corporate Service Provider Business (Beneficial Ownership) Regulations 2017 · Corporate Service Provider Business Amendment Act 2014 · Companies Act 1981 · Exchange Control Regulations 1973 · Annex I - Sector-Specific Guidance Notes for Trust Business (2022 Guidance Notes for AML/ATF Regulated Financial Institutions) · Annex III - Sector-Specific Guidance Notes for the Securities Sector (2022) · Further Guidance - CSP Gatekeeper Role (2017-06-14) · Guidance Notes - Assessment of Shareholder Controllers and Controllers (September 2014) · Personal Declaration Form for Beneficial Owners or Shareholder Controllers (2025 Version) · Notice - INTEGRA Updated Personal Declaration Form (2025-02-19) · Notice - Corporate Service Provider (Beneficial Owner) Regulations 2012 (2012-12-21)

Exemptions and carve-outs

The instruments provide several carve-outs, mostly concerning exchange control permission and the CSP licensing structure rather than the beneficial ownership identification duty itself.

• CSP-maintained registers: The Authority indicated that companies using a licensed CSP that maintains the register of members would be exempted from seeking Controller of Foreign Exchange permission on share issuances and transfers.
• Unlimited licence condition: Under the Corporate Service Provider Business Amendment Act 2014, certain exemptions from Controller permission under the Exchange Control Regulations 1973, and references in the Exempted Partnerships Act 1992 and Limited Partnership Act 1883, apply only where the relevant CSP holds an unlimited licence.
• Intra-group CSP activity: The Authority signalled that intra-group-only CSP activity may be exempted from licensing, while each CSP serving third parties outside its group needs its own licence.
• Exempted private trust companies: The trust business sector guidance does not apply to exempted private trust companies that use a licensed Corporate Service Provider or licensed trust business in their structure.
• Mutual funds: Under the Companies Act 1981, overseas companies must obtain a permit to carry on business unless exempted as a mutual fund.

Sources: Corporate Service Provider Business Amendment Act 2014 · Companies Act 1981 · Annex I - Sector-Specific Guidance Notes for Trust Business (2022 Guidance Notes for AML/ATF Regulated Financial Institutions) · Response to Industry on the Corporate Service Provider Business Act 2012 (2012-03-02)

Enforcement and penalties

Enforcement powers and penalties are set out in the instrument creating each duty; they are not consolidated, and the amounts stated vary by instrument.

Exchange control

• Exchange Control Act 1972: Breach of regulations made under the Act can attract criminal penalties (fines up to $5,000 or two years imprisonment on indictment, or larger multiples of the value involved) or civil penalties up to $25,000, plus forfeiture. Obstruction of search or evidence-detention powers is a summary offence punishable by a fine of $1,000 or three months imprisonment, or both.
• Exchange Control Regulations 1973: The Regulations create civil penalty and offence provisions, including offences by bodies corporate, with a defined appeals process.

CSP regime

• Draft 2012 BO regulations: Under the draft Corporate Service Provider (Beneficial Owner) Regulations 2012, a beneficial owner failing to notify a change within 28 days would commit an offence carrying a fine of up to $10,000, and failing to comply with a disclosure notice, or providing false information, would also be an offence; a CSP could restrict or cancel a non-disclosing person's interest.
• Certificate of compliance default: Appendix V to the 2014 consultation notes that under section 46(2) of the Corporate Service Provider Business Act 2012 a civil penalty of up to $5,000 per week of default applies for failure to deliver the certificate of compliance.
• False licence information: On the CSP licence application form, knowingly or recklessly providing false or misleading information is an offence carrying fines up to $50,000 and/or imprisonment up to four years.

AML/ATF regime

• Criminal offences: Breach of specified AML/ATF requirements is a criminal offence; sector guidance states fines up to $50,000 on summary conviction, or up to $750,000 and/or two years imprisonment on indictment.
• Civil penalties: The securities and CSP sector guidance notes that the BMA may impose civil penalties of up to $10,000,000 per breach under Section 20 of the POCA SEA; one CSP annex instead states civil penalties up to $500,000 per contravention under the SEA Act 2008.

Insurance enforcement

• Controller powers: Under the Insurance Act 1978, the Authority can object to a person becoming or remaining a controller, restrict share transfers and voting or payment rights, direct removal of a controller, impose fines for failure to notify under Section 32D, and seek injunctions.
• Enforcement example: In the Swift Intermediaries ruling, the Tribunal upheld cancellation of the broker's registration and a three-year prohibition order against its director, based in part on failure to file accurate and timely beneficial ownership changes under Companies Act sections 98H and 98I and to notify controller and officer changes under Insurance Act section 30J.

Sources: Exchange Control Regulations 1973 · Exchange Control Act 1972 · Annex III - Sector-Specific Guidance Notes for the Securities Sector (2022) · Guidance Notes for AML/ATF Regulated Financial Institutions 2022 - Annex VI: Sector-Specific Guidance Notes (SSGN) for Corporate Service Provider (CSP) Business · Guidance Notes - Assessment of Shareholder Controllers and Controllers (September 2014) · Annex VI - Sector-Specific Guidance Notes for Corporate Service Provider Business · Notice - Code of Practice Consultation Paper (2014-09-15) · Corporate Service Providers Business Licence Application Form (CSP Form 1) · Notice - Corporate Service Provider (Beneficial Owner) Regulations 2012 (2012-12-21) · AML/ATF Sectoral Guidance Notes for CSPs (2021) - Annex VI · AML/ATF Sector-Specific Guidance Notes for the Securities Sector (Annex III) 2021 · Insurance Appeal Tribunal Ruling - Cancellation of Registration & Prohibition Order - Swift Intermediaries Limited & David King (2025-02-25)