One of the most notable innovations in the Beneficial Ownership Act 2025, which was passed last month in the House of Assembly, is the introduction of an enforcement process that allows companies to act against uncooperative beneficial owners.

Traditionally, enforcement of ownership disclosure has rested with regulators. The new framework changes that dynamic by giving legal persons the power to restrict rights or take other measures if a beneficial owner refuses to provide accurate information.

This approach is intended as a last-resort tool to strengthen compliance, but it also carries practical challenges.

Requiring companies to enforce directly against their owners risks creating conflict within corporate structures and may prove difficult to administer, particularly where ownership is dispersed or contested.

For corporate service providers, who already bear the responsibility of maintaining registers and making filings on behalf of many unregulated companies, these new powers are likely to translate into additional work, more complex procedures, and higher costs of service.

Overlaying this is a strengthened sanctions regime. Companies that fail to maintain accurate registers, or that mishandle the new enforcement responsibilities, face penalties of up to $250,000 and, in serious cases, imprisonment for individuals involved.

These sanctions are in line with international expectations that penalties be dissuasive, but they also raise the stakes for businesses that may already be struggling to interpret how their obligations will apply in practice.

The effect is to place corporate service providers and company directors at the very front line of enforcement. They must not only gather and verify ownership information but also act if those who control the company are unwilling to co-operate.

It is a significant shift in responsibility, and one that makes the details of the regulations still to come more important.

Many of the key features of the framework set out by the Act remain to be defined in those regulations and in guidance notes.

Terms such as “legitimate interest”, which will govern access to the register by journalists, civil society and counterparties in 2026, have yet to be explained.

Similarly, the details of how long institutions may retain beneficial ownership data, how information may be shared within international groups, and what audit trails must be maintained are still to be clarified.

This reliance on future regulations is not unusual in Bermuda’s legislative process, but it does create a transitional period of uncertainty. Companies and corporate service providers know that stronger obligations are coming, yet they cannot be sure exactly how those obligations will be tested in practice.

The effectiveness of the new regime will therefore depend less on the words of the Act itself and more on the quality of the regulations that follow. If they are practical, proportionate and clearly communicated, Bermuda will be able to demonstrate both compliance with international standards and fairness to the businesses that must implement them.

For now, the message is one of readiness, and the practical implications for directors, service providers and financial institutions are already becoming clear.

For directors, boards and service providers, the Act signals a shift in expectations rather than a change in principle.

Ownership registers have long been part of Bermuda’s framework, but the new law emphasises accuracy, verification and accessibility to a much greater degree.

Companies that have treated the register as an administrative formality will now need to approach it as a core compliance obligation.

Corporate service providers will find their role even more central. Many unregulated companies rely entirely on service providers to maintain statutory records and filings. With new verification requirements and enforcement provisions, these responsibilities will expand, and costs are likely to reflect the added complexity.

Service providers should be reviewing their procedures now to ensure that they can meet the higher evidential standards the Act requires.

For regulated financial institutions, the significance lies in access. Banks, insurers and other anti-money laundering/antiterrorist financing regulated entities will be able to query the central register directly. This will support due diligence processes but will also require institutions to put in place clear protocols for handling, securing and limiting the use of the information they obtain.

Ultimately, the Act is part of Bermuda’s strategy to preserve its access to international markets by demonstrating compliance with global standards.

For local businesses, that means taking beneficial ownership obligations seriously, embedding them into governance processes, and recognising that transparency is no longer just a regulatory requirement but part of Bermuda’s licence to operate internationally — a point underscored by the Act’s broader significance.

The legislation marks an important step in Bermuda’s ongoing commitment to international regulatory standards. The real test, however, will come in how regulations are drafted, implemented, and assessed during Bermuda’s Caribbean Financial Action Task Force review.

The legislation also highlights the careful balance Bermuda must strike.

On one side lies the demand from international partners for transparency and immediate access to accurate ownership information. On the other lies the constitutional and statutory duty to respect privacy and ensure that obligations remain proportionate for businesses that operate here.

For companies, service providers and financial institutions, the message is clear: beneficial ownership transparency has become a central pillar of Bermuda’s regulatory framework. Preparing registers, strengthening procedures, and treating ownership data as a core compliance responsibility will be essential.

Ultimately, Bermuda’s success will depend not just on having a register, but on proving that ownership transparency can coexist with privacy rights — a balance international assessors will watch closely.

• Jarion Richardson is the head of regulatory and compliance services, Brad Adderley is the managing partner and head of the corporate practice, and John Wasty is head of the dispute resolution practice and head of regulatory disputes in Appleby’s Bermuda office. A copy of this column can be obtained on the Appleby website at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult a lawyer