Under new legislation being proposed, local companies will be required to file changes to their beneficial ownership. Companies are now being urged to review the proposals contained in a consultation paper on the subject.
This is a first for local companies in Bermuda, where the current requirement is for such companies to file beneficial ownership information at the time of formation, with no obligation to provide an update. The proposed amendments to the law will ensure that information about ownership of local entities is updated and accessible.
The consultation paper – titled Proposed Revisions to Beneficial Ownership Disclosures – is a step in the process towards amending the legislation and offers the business community a chance to comment. It was prepared jointly by Bermuda Monetary Authority (Authority), Ministry of Finance (MoF) and Ministry of Economic Development (MoED).
Deputy Premier and Minister of Finance the Hon. E.T. Richards JP MP said, “Bermuda has been collecting information on beneficial ownership of corporate and legal entities for more than 70 years. In fact, we have been a world leader in this regard and our registry is considered effective and compliant with international standards. In response to growing demands for transparency from the global community, these 2017 amendments are to ensure Bermuda’s regime remains in good international standing for future generations.”
Jeremy Cox, Chief Executive Officer at the Authority, said, “The partnership between Bermuda and the UK to upgrade the beneficial ownership register is expected to result in further improvements to the detection and deterrence of serious financial crimes. It is also in line with the Authority’s decades-long commitment to creating and retaining a regulatory environment that enables Bermuda to remain world-class in international compliance, and be an appealing centre for highly-regarded businesses.”
Additional proposed amendments to the legislation include:
- Impose an obligation on all companies formed in Bermuda or operating in Bermuda to maintain a beneficial ownership registry; and
- To expand the definition of beneficial ownership to reflect the international definition now applicable for anti-money laundering and anti-terrorist funding purposes. This will mean the registry for beneficial ownership will include not only the individual who ultimately owns equity voting shares, but also owners of capital shares without voting rights, and to include persons who have significant control often referred to internationally as “controllers”.
The legal term beneficial ownership refers to the actual owners of equity in a business, even though title ownership may be in another name. It also covers individuals who directly or indirectly have the power to influence decisions, such as appointment of directors.
Similar amendments will be proposed to the filing of beneficial ownership information related to exempted partnerships and limited partnerships.
A copy of the 5th May consultation paper is available at bma.bm by accessing the ‘Notices’ section under ‘Document Centre’ (or by clicking here). All comments should be sent to policy@bma.bm and mbinns@gov.bm.
A joint industry outreach session will be announced later this month.