Bermuda Clarity: The Beneficial Ownership Framework

Bermuda Clarity: The Beneficial Ownership Framework

In late September 2025, on cue with the changing of the seasons, The Beneficial Ownership Act 2025 (the “Act”) was passed into law.  The Act provides the legislative framework for the establishment of an electronic central register of beneficial ownership information of legal persons (the “Central Register”) and will come into operation on the date appointed for such by the Minister of Finance by notice published in the Official Gazette.

The Act (a) consolidates Bermuda’s beneficial ownership regime under the framework of a single Act, (b) extends access to the Central Register to law enforcement, certain government departments and regulatory bodies as well as to obliged entities to facilitate compliance with customer due diligence obligations and (c) facilitates the transfer of the Central Register from the Bermuda Monetary Authority to the Bermuda Registrar of Companies (the “Registrar”). 

For legal persons and their advisors, understanding the scope and requirements of this Act is paramount. This article provides a high-level overview of the key provisions and obligations introduced.

Scope and Application

The Act applies broadly to every “legal person,” a term encompassing all companies to which the Companies Act 1981 applies, limited liability companies, exempted partnerships, limited partnerships, and overseas partnerships.  A critical exemption exists for entities listed on the Bermuda Stock Exchange or an appointed stock exchange and their subsidiaries (defined as those in which the listed entity (i) holds 75% or more of shares or voting rights, (ii) otherwise exercises ultimate effective control over or (iii) controls by other means).

Foundational to the Act is the definition of a beneficial owner. A beneficial owner is any individual or individuals who:

• Ultimately own or control 25% or more of the shares, interest, or voting rights in the legal person (directly or indirectly);
  
• Otherwise exercises ultimate effective control over the management of the legal person; or
  
• Exercise control of a legal person by other means.

Where no individual meets these conditions, the individual holding the position of senior manager must be identified.  Where no individual meets the above conditions, trustees of a trust are the beneficial owners of the legal person if they exercise ultimate effective control over the activities of the trust.

Obligations on Legal Persons

The Act imposes several proactive duties on legal persons:

1. Identification: They must take “reasonable steps” to identify all beneficial owners and any relevant legal entities (together, “registrable persons”) in their ownership chain.
   
2. Notice: They are required to send notice in writing to anyone they believe is a registrable person, compelling such person to confirm its status and supply the required information within 30 days.
3. Verification: Crucially, legal persons must verify the identity of beneficial owners using information from a reliable and independent source before entering details in their beneficial ownership register.  Legal persons must maintain records of these verification measures.
   
4. Keeping an internal register: Each legal person must establish an internal beneficial ownership register that contains the statutory minimum required information that must be “accurate,” “adequate,” and “current”.  This includes full names, addresses, nationalities, dates of birth, and official identification details for individuals, and corporate details for relevant legal entities such as dates and jurisdictions of registration, addresses of registered or principal offices and where any relevant legal entity is a nominee, its status as such.  The internal beneficial ownership register should also contain the effective date on which each registrable person was entered into the register, a statement of the nature and extent of the interest held by such person, where a class of beneficial owners is so large as for it not to be reasonably practicable to identify each of them, details sufficient to identify and describe such class of persons and the date on which a registrable person ceased to be an owner of the legal person.  This register should be kept at the registered office of the legal person or such other place in Bermuda convenient for inspection by the Registrar, as notified in writing to the Registrar.
   
5. Maintaining the internal register:  Each legal person is obliged by law to maintain its internal beneficial ownership register.  Any change which impacts an entry therein shall be recorded in the register not later than 14 days after the legal person is notified of such change.  The legal person, when it becomes aware of or has reason to believe the occurrence of a relevant change to the minimum required information in the register relating to a registrable person, must send written notice to such registrable person requesting confirmation of the same within 30 days of receipt of the notice.  The register is not to be updated until such confirmation is obtained. 
   
6. Retaining records:  Where a beneficial owner or relevant legal entity ceases to be a registrable person in relation to any legal person, records with respect to such beneficial owner or relevant legal entity should be retained for a period of not less than five years from the date such beneficial ownership ceased.

Imposition of Restrictions

Where a beneficial owner fails, without reasonable excuse, to give the information for the establishment or maintenance of the internal beneficial ownership register required by any written notice sent to it within the time specified in such notice, the legal person may, if its relevant constitutional document provides, issue a warning notice to the beneficial owner advising of its intention to impose restrictions on that person’s shares or interests and a decision notice of its imposition of the same.  Alternatively, the legal owner can apply to the Supreme Court of Bermuda for an order directing that the person’s shares or interests be subject to restrictions, including on transfer, voting and payment of sums due thereon.  In all cases, the beneficial owner must be given the opportunity to make representations and the legal person is required by law to have regard to the effect of the decision notice or the court order on third parties, persons holding a security interest over the relevant shares or interests, shareholders or partners and other beneficial owners.

Beneficial Owners to be approved by the Registrar

After the coming into operation of the Act, no person shall become a beneficial owner of a legal person carrying on business in Bermuda or a legal person seeking authorisation to do so, without the approval of the Registrar.  The application for such approval should be in the form, and accompanied by the information, required by the Registrar pursuant to Regulations made by the Minister of Finance. 

The Central Register and Access

The Central Register is an electronic database to hold information on the beneficial ownership of each legal person and is to be established and maintained by the Registrar, who acts as the designate of the Minister of Finance (the Competent Authority).  Legal persons must file their beneficial ownership information with the Registrar.

Access to information within the Central Register is strictly governed. The Act permits disclosure of information to (i) law enforcement, government departments and regulatory bodies for the purpose of enabling or assisting them in their statutory functions and to (ii) Bermuda-regulated financial institutions and designated non-financial business persons, collectively referred to as obliged entities, to assist them in the conduct of customer due diligence for AML/ATF purposes.  Importantly, the Act imposes restrictions on the further disclosure of any information obtained from the Registrar, safeguarding confidentiality. 

The Act provides that the Registrar may restrict or prohibit disclosure of the information on the Central Register as considered appropriate and confirms that a person is not required to provide or produce information or answer questions on the grounds of legal professional privilege.

Key Considerations and Next Steps

This is indeed a new season.  The landscape of corporate transparency and compliance in Bermuda is set for a significant update with the coming into force of this new legislation which ensures Bermuda continues to meet international standards, while providing regulatory clarity.  Legal persons and their corporate service providers should now begin reviewing their internal processes to ensure they are prepared to meet these new obligations for the approval of beneficial owners and the identification, verification and maintenance of beneficial ownership information once the Act commences.

Please reach out to Brian Holdipp or any other member of our Corporate team should assistance or further information be required in relation to obligations imposed under the Beneficial Ownership Act 2025.