Beneficial Ownership in the British Overseas Territories in the Caribbean: A Cayman, Montserrat, and Bermuda Case Analysis
By Leon Dawson, March 10, 2025
In recent years, beneficial ownership (BO) transparency has become a global priority in fighting against money laundering (ML), tax evasion, and illicit financial flows. The British Overseas Territories (BOTs) in the Caribbean—Cayman Islands, Montserrat, and Bermuda—have all taken significant steps to enhance their BO frameworks, aligning with evolving Financial Action Task Force (FATF) standards and international best practices.
However, while technical compliance has improved across these jurisdictions, challenges remain in areas such as public access, enforcement, and verification of beneficial ownership data. This article examines the current BO regimes in the Cayman Islands, Montserrat, and Bermuda, highlighting key developments, challenges, and strategic recommendations for further strengthening transparency.
Cayman Islands: Strengthening Compliance Amid Global Pressure
The Cayman Islands has historically been scrutinized for its role in global finance, often labeled a secrecy jurisdiction due to its low-tax environment and complex corporate structures. However, the recent Beneficial Ownership Transparency Act, 2023 (BOTA), which came into force on July 31 2024, introduces significant reforms to align with international Anti-Money Laundering (AML)/Counter the Financing of Terrorism (CFT) standards.
Key Features of Cayman’s BO Regime:
- The new law applies to a broader range of entities, including companies, Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), foundation companies, and limited partnerships, ensuring greater regulatory coverage.
- Companies are now required to maintain a BO register (BOR) at their registered office. However, this data remains inaccessible to the public, with access restricted to regulatory bodies such as the Competent Authority for Beneficial Ownership.
- Alternative Routes to Compliance (ARTC) – Investment funds registered under the Mutual Funds Act, entities licensed under a Cayman Islands regulatory law, and those listed on a stock exchange can comply via alternative means.
Despite these advances, public transparency across BOTS is set to improve with the introduction of legitimate interest access to BO registers. Previously, jurisdictions such as Anguilla, Bermuda, the British Virgin Islands (BVI), the Cayman Islands, and the Turks and Caicos Islands restricted BO data access primarily to regulatory bodies, limiting the ability of journalists, civil society organizations, and financial crime investigators to scrutinize corporate ownership structures. However, following a ministerial statement in the UK House of Commons on January 8, 2025, these territories are expected to approve legislation for legitimate interest access by April 2025, with implementation scheduled by June 2025 or earlier. While full public access remains off the table, this shift represents a significant improvement in transparency, allowing vetted stakeholders to request BO data under specific conditions.
Montserrat: Progress with a Centralized BO Framework
Unlike the Cayman Islands, Montserrat has long maintained a centralized approach to BO transparency through its Persons with Significant Control (PSC) Register. This register is part of Montserrat’s broader AML/CFT strategy, aimed at preventing corporate abuse for financial crimes.
Key Features of Montserrat’s BO Regime:
- Montserrat requires legal entities to disclose beneficial ownership information to the Financial Services Commission (FSC) and the Companies and Intellectual Property Office (CIPO).
- Companies must update ownership information within 14 days of changes, ensuring timely access to accurate data.
- Law enforcement agencies have direct access to BO data, aiding in financial crime investigations and compliance monitoring.
Montserrat’s approach aligns closely with FATF guidelines, particularly in ensuring that competent authorities have real-time access to beneficial ownership data. However, full public access remains restricted, and smaller DNFBPs (real estate agents, law firms, and trust service providers) face challenges in fully implementing BO requirements.
To strengthen compliance and enforcement, Montserrat could explore:
- Automated BO data verification mechanisms to ensure accuracy and prevent fraudulent reporting.
- Broader DNFBP supervision, particularly in high-risk sectors prone to money laundering.
- Consider moving to a legitimate access model of the BO Registry
- Gradual public access expansion enables civil society and investigative journalists to play a role in financial transparency.
Bermuda: Balancing Transparency and Privacy Rights
Bermuda has positioned itself as a leader in BO transparency, maintaining a highly effective BO framework. However, in light of the European Court of Justice (ECJ) ruling on public BO registers, Bermuda has opted to transition to a legitimate interest access model rather than a fully public register.
Key Features of Bermuda’s BO Regime:
- Bermuda has consolidated its BO framework under a single Act, transferring oversight from the Bermuda Monetary Authority (BMA) to the Registrar of Companies (RoC).
- Phased Access Model:
- Phase 1 (Q2 2025): Financial institutions and DNFBPs gain direct access for customer due diligence (CDD) and risk assessment.
- Phase 2 (Q3 2026): Persons with a legitimate interest (e.g., journalists, NGOs, and law enforcement) will be allowed to access certain BO data.
- Enhanced Verification & Compliance Measures:
- Legal entities must verify beneficial owners using independent sources.
- Companies failing to comply face fines up to BD$250,000.
- New criminal penalties (up to BD$50,000 fine or two years’ imprisonment) for unauthorized disclosure of BO data.
Bermuda’s transition to a legitimate interest model mirrors recent EU policy shifts, balancing data protection rights with financial transparency. However, as public access to BO registers gains traction globally, Bermuda may face pressure to expand transparency measures further.
Comparing BO Transparency in Cayman, Montserrat, and Bermuda
| Jurisdiction | Public Access to Data | Regulatory Oversight | BO Registry Compliance | Enforcement Challenges |
| Cayman Islands | Limited access | Competent Authority | Entities must maintain a BO Register, but compliance varies | Delayed enforcement until 2025 |
| Montserrat | Limited access | FSC & CIPO | PSC Register requires timely updates | DNFBPs face implementation challenges |
| Bermuda | Legitimate interest model (from Q3 2026) | RoC (formerly BMA) | Phased access model with stricter penalties | Balancing transparency with privacy rights |
Three Strategic Recommendations for BOTs
To further enhance BO transparency, the British Overseas Territories in the Caribbean should consider the following:
- Expand Public Access While Safeguarding Privacy
- Adopt a legitimate interest access that grants civil society and investigative journalists restricted access to BO data.
- Introduce tiered access levels, allowing different stakeholders to access relevant BO data without compromising sensitive information.
- Strengthen Cross-Border BO Data Sharing
- Establish a formal data-sharing agreement between BOTs and the UK’s fully open BO Registry, allowing regulatory bodies, law enforcement, and vetted financial crime investigators to access BO data seamlessly. This could involve real-time data exchange platforms, automated verification systems, and memorandums of understanding with FATF-compliant jurisdictions to enhance AML/CFT cooperation. Additionally, BOTs should harmonize BO disclosure requirements with the UK, ensuring consistency and reducing loopholes for illicit financial flows
- Enhance BO Data Verification & Compliance Monitoring
- BOTs can strengthen BO data accuracy by integrating national registries to flag discrepancies, such as deceased persons listed as beneficial owners, and partnering with chambers of commerce to verify legal representatives. Agreements with the Attorney General’s Office and regulatory bodies can further cross-check BO declarations against legal ownership records and conduct targeted audits of high-risk entities to detect fraudulent filings.
- Increase random audits of high-risk sectors (e.g., real estate, trust services) to prevent corporate misuse.
The Cayman Islands, Montserrat, and Bermuda have made notable progress in beneficial ownership transparency, but global expectations are evolving. Global expectations for beneficial ownership transparency have intensified, with over 100 jurisdictions adopting laws mandating the disclosure of ultimate company owners since 2015. Initiatives like the Open Government Partnership and the Extractive Industries Transparency Initiative advocate for publicly accessible BO registers to combat illicit financial activities. Additionally, FATF has strengthened its standards, urging countries to ensure that accurate and up-to-date BO information is available to competent authorities. Through expanding access, enhancing compliance mechanisms, and strengthening cross-border cooperation, the British Overseas Territories can reinforce their commitment to financial integrity while maintaining their competitive business environments.
Photo: United Kingdom Parliament