Key Takeaways
- Bermuda no longer permits bearer shares, having moved to abolish and prohibit them under the Companies Act 1981 and later amendments.
- Legacy bearer shares had to be converted to registered form, with custody and immobilisation rules now reinforcing identified ownership.
- Registered ownership requirements support beneficial ownership transparency, aligning Bermuda with broader offshore trends away from bearer instruments.
- Non-resident owners and advisers should confirm shares are held in registered form, as the no-bearer-share regime looks set to remain stable.
Bearer Shares in Bermuda: The Current Position at a Glance
Bearer shares are not available in Bermuda and have not been for decades. The issuance and transfer of these unregistered instruments are prohibited outright under the Companies Act 1981, the principal corporate statute administered by the Registrar of Companies. No foreign owner can hold, issue, or transfer ownership of a company there through a bearer certificate.
This matters to non-resident investors, corporate planners, and their advisers weighing whether the jurisdiction suits their structure. The article explains how the prohibition operates, how legacy instruments were handled, what replaced the privacy that bearer shares once offered, and how the position compares with other offshore centres. It is most relevant to anyone considering an exempted company, LLC, or partnership and assessing transparency exposure.
What Bearer Shares Are and Why They Mattered Historically
A bearer share is a stock certificate that names no owner. Whoever physically holds the document is treated as its legal owner.
The appeal was simple: ownership could change hands the moment the certificate did, with no filing, registration update, or paper trail. For high-net-worth individuals and corporate planners, that meant discretion and speed in moving value.
FATF's glossary describes bearer shares as "negotiable instruments that accord ownership in a legal person to the person who possesses the bearer share certificate." That same anonymity made them a recognised vehicle for money laundering and tax evasion.
A global crackdown followed. Most major economies have restricted, immobilised, or abolished the instrument since the turn of the century, the United Kingdom in 2015 and Switzerland in 2019 among them, with effective bans across the United States and the European Union.
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The Legal Framework: The Companies Act 1981 and Subsequent Amendments
The governing statute is the Companies Act 1981 (1981:59). Part IV carries a standalone provision headed "Issue and transfer of bearer shares prohibited," leaving no room for interpretation on the point.
The prohibition is old. The CFATF 2020 Mutual Evaluation Report records that issuance had been barred "for over thirty years," placing the original ban in the late 1980s or early 1990s.
The most recent change is the Companies (Prohibition of Bearer Shares and Nominee Directors) Amendment Act 2025, which received Royal Assent on 10 December 2025. It amends both the Companies Act 1981 and the Limited Liability Company Act 2016, and reaches beyond bearer shares to cover nominee directors, alternate directors, and beneficial ownership record-keeping for entities discontinuing to another jurisdiction.
Enforcement sits with the Registrar of Companies, acting under the Registrar of Companies (Compliance Measures) Act 2017 in line with FATF, OECD, and EU standards. The wider ownership-disclosure rules, once spread across several statutes, are now consolidated under the Beneficial Ownership Act 2025.
How Bermuda Moved to Abolish and Prohibit Bearer Shares
The prohibition predates the modern transparency era. By the time of the 2020 CFATF review, issuance had already been illegal for over three decades.
One gap remained at that point: there were no rules immobilising bearer share warrants. The 2025 reforms responded directly to recommended actions arising from the CFATF Fourth Round Mutual Evaluation.
The 2025 Act passed the House of Assembly on 21 November 2025 and came into operation on 10 December 2025. It reaffirms that legal persons cannot issue new bearer shares or bearer share warrants, forming part of a suite of amendments aligning the jurisdiction with the revised FATF Recommendations ahead of its fifth-round evaluation.
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Treatment of Legacy Bearer Shares and the Conversion Process
Although issuance had long been barred, the 2025 Act dealt definitively with any instruments still in circulation. All existing bearer shares had to be converted into registered shares within 90 days of commencement.
That window ran to 10 March 2026. The company holding such shares had to notify the beneficial owners of the conversion duty, and each owner had to supply a name in which the registered shares would be recorded.
- Any bearer shares or warrants left unconverted after 10 March 2026 were deemed null and void.
Conversion also became a precondition for company revival. A struck-off company or LLC cannot be reinstated while bearer shares remain in issue.
No specific public figure is published for conversion fees or processing times. As a general principle, any conversion filing falls under the standard Registrar of Companies fee schedules in the Government Fees Regulations 1976.
Custody, Immobilisation and Registered Ownership Requirements Today
There is no halfway house. Because the instrument was prohibited rather than merely regulated, no custodian or immobilisation regime was ever created.
The single gap the 2020 evaluators flagged, untreated bearer share warrants, is now closed; the 2025 Act covers warrants alongside shares. What governs ownership today is registration, not custody.
Under the Beneficial Ownership Act 2025, every in-scope legal person must take reasonable measures to verify the required information about its beneficial owners and must engage a licensed corporate service provider to file that information with the central register. Responsibility for the register has moved from the Bermuda Monetary Authority to the Registrar of Companies, giving a single authoritative body for ownership data.
Entities re-domiciling face an added step. A discontinuing exempted company or LLC must appoint a Bermuda-based agent to retain the beneficial ownership register and accounting records for at least five years, under an irrevocable deed poll filed with the Registrar.
Listed groups are treated differently. Companies whose shares or interests trade on the Bermuda Stock Exchange or an appointed exchange, and their subsidiaries, are exempt from the beneficial ownership regime.
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What the Abolition Means for Beneficial Ownership Transparency
Removing the instrument closed one route to anonymity; the Beneficial Ownership Act 2025 builds the system that replaces it. Disclosure functions once split between the BMA and the Registrar now sit under one framework.
The definition of a beneficial owner has tightened. It now reaches any individual who directly or indirectly ultimately owns or controls 25% or more of the shares, voting rights, or partnership interests, or who exercises ultimate effective control over management, or controls by other means.
| Feature | Position |
|---|---|
| Public access | Not available |
| Competent authorities (including the BMA) | Access granted |
| Obliged entities (financial institutions, DNFBPs) | Access for customer due diligence |
| Unauthorised disclosure (summary) | Up to $100,000 and two years' imprisonment |
| Unauthorised disclosure (on indictment) | Up to $250,000 and five years' imprisonment |
The register is closed, not public. A 2025 Transparency International UK analysis points to a residual weakness: trust structures need only name trustees, not settlors or beneficiaries, leaving room to obscure the underlying individual. The package as a whole is built to prepare the jurisdiction for its CFATF fifth-round evaluation, scheduled to begin in October 2026.
Practical Implications for Non-Resident Owners and Advisers
For most foreign owners, the headline is straightforward: bearer shares are off the table and have been for decades, so no part of an ownership chain can run through a bearer instrument. The 2025 clarification changes little in practice but signals the direction of regulatory travel.
What does apply is the filing duty. A non-resident beneficial owner of an in-scope company, LLC, or partnership must have their identity verified and filed with the central register through a licensed corporate service provider, since self-filing is not permitted.
The deadline has passed and enforcement has begun. Registers had to be filed before 1 June 2026, after which the Registrar started enforcing penalties.
Two further points reshape older structuring habits. The appointment of nominee directors is now prohibited in any circumstances, and advisers planning a future re-domiciliation must put the irrevocable deed poll appointing a Bermuda-based records agent in place and filed before discontinuance.
Tax certainty remains separately available. Owners of an exempted undertaking may apply to the Minister of Finance for a Tax Assurance Certificate, which can run until 31 March 2035 and certifies that new profits, capital, or estate taxes will not be applied; that subject belongs to its own dedicated treatment.
Comparing Bermuda with Other Offshore Jurisdictions on Bearer Shares
Few offshore centres still entertain the instrument. The Marshall Islands and Panama remain the main holdouts, and both require immobilisation with a licensed custodian, which strips away most of the original privacy.
The jurisdiction here sits at the strict end of the spectrum, having banned issuance roughly 25 years before several of its peers and never offering a custodian alternative or grandfathering.
| Jurisdiction | Position | Definitive measure |
|---|---|---|
| Bermuda | Prohibited, unconditional and total | Long-standing ban; reaffirmed by the 2025 Act |
| Cayman Islands | Abolished | Companies Act amendment May 2016; conversion by 13 July 2016 |
| BVI | Abolished | BVI Business Companies (Amendment) Act 2015 |
| United Kingdom | Abolished | Small Business, Enterprise and Employment Act 2015 |
| Panama | Permitted with custody | Mandatory custodial compliance and record-keeping |
| Marshall Islands | Permitted with immobilisation | Custodian required |
The Conyers comparative review of Bermuda, Cayman, and BVI states the point plainly: bearer shares are not permitted. Where Cayman and BVI reached that result through conversion deadlines in the 2010s, the ban here was already settled law a generation earlier.
Outlook: Stability of the No-Bearer-Share Regime
A reversal would require an Act of Parliament amending both the Companies Act 1981 and the LLC Act 2016. Given the treaty obligations and CFATF evaluation exposure at stake, no such move is credibly anticipated.
The political ground is firm. The opposition One Bermuda Alliance backed the 2025 Act, with its Shadow Minister of Justice noting it "accords with international best practice," which points to cross-party consensus.
Institutional pressure runs one way. The Registrar began enforcing the broader ownership regime through fines and criminal penalties from 1 June 2026, and FATF's revised Recommendation 24 will keep pushing toward more disclosure, not less.
Conclusion
For a foreign owner or adviser, the practical message is simple and durable: there is no bearer share option here, and structuring should assume registered ownership and verified beneficial ownership filed through a licensed corporate service provider. The 2025 reforms reaffirm a decades-old prohibition rather than introduce a new one, while tightening the surrounding transparency rules. With enforcement live and a CFATF evaluation approaching, the regime is settled and the direction is toward greater disclosure. Plan accordingly, and treat any structure relying on anonymity of ownership as a non-starter.
How Expanship Can Help Your Business in Bermuda
Expanship guides foreign owners through what the bearer share prohibition means in practice, confirming that your intended structure relies on registered shares and arranging the beneficial ownership verification and central register filing that a licensed corporate service provider must handle. That work sits within a wider set of services for a foreign-owned entity in the jurisdiction.
- Company and LLC incorporation, including exempted undertakings
- Registered agent and registered office services
- Tax registration and filing support
- Ongoing compliance management, including beneficial ownership obligations
- Accounting and bookkeeping
- Banking introductions
To discuss your structure or compliance position, contact Expanship Bermuda.
Frequently Asked Questions
No. The Companies Act 1981 expressly prohibits the issuance and transfer of bearer shares and bearer share warrants, and the prohibition has stood for over thirty years. The 2025 amendment reaffirmed it for both companies and LLCs.
They had to be converted into registered shares within 90 days of the 2025 Act's commencement, a window that closed on 10 March 2026. Any certificate left unconverted after that date was deemed null and void, and a company cannot be reinstated while bearer shares remain in issue.
No. Because the instrument was banned outright rather than regulated, no custodian or immobilisation regime was ever established, which places the jurisdiction among the strictest offshore centres on this point. Ownership is recorded through registration, not custody.
Your identity is filed with a central register held by the Registrar of Companies through a licensed corporate service provider, but that register is not public. Access is limited to competent authorities and to obliged entities for customer due diligence, and unauthorised disclosure carries fines up to $250,000 and imprisonment up to five years on indictment.
Cayman abolished bearer shares in 2016 and BVI in 2015, while Bermuda's ban predates both by around 25 years. Panama and the Marshall Islands still permit the instrument but require custodial immobilisation, which removes most of the original privacy advantage.
A reversal would require Parliament to amend both the Companies Act 1981 and the LLC Act 2016, and it is not credibly anticipated. Treaty obligations, the upcoming CFATF fifth-round evaluation beginning in October 2026, and cross-party political support all point toward maintaining and enforcing the ban.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
