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Bearer Shares

Bearer shares are purchased to provide maximum confidentiality and anonymity to company's shareholders. Share registers are only available for inspection by the British Virgin Island Court or by registered shareholders of the British Virgin Island Corporation.

Note: some changes have been implemented in the legislation in regard of the purchase and use of the bearer shares. In a few words, it means that from 1 January 2006 all BVI companies are required to be incorporated under the BVI Business Companies Act. Under it, all bearer share certificates are required to be deposited with Authorised or Recognised Custodian. IBCs incorporated before January 2005 have been given an additional time until 31 December 2010 to comply with the new bearer shares regime and deposit their bearer share certificates with a custodian. IBCs incorporated on or after January 2005 must immediately comply with the new regime and place the bearer shares with a licenced custodian.

Also, it is stated in the Business Companies Act that annual government fees for companies with bearer shares are to increase to US$1,100 per year. Also, an IBC which has the power to issue bearer shares will have to pay government incorporation fee. All these fees will increase from 1 January 2008 and will apply to all IBCs/BVI Business Companies with bearer share provisions in their Memorandum and Articles of Association, regardless of whether or not bearer shares are really issued.

There is a number of alternatives for the shareholders owning bearer shares. They may be as follows:

  1. Incorporating new company in one of the jurisdictions allowing the issue of bearer shares without custodianship.
  2. Re-domiciling the existing company in one of the jurisdictions that do not have custodianship issues and no increases in government fees for the issue (or ability to issue) bearer shares. In this case good choice may be Anguilla or Seychelles.
  3. Appointing a nominee shareholder to keep Share Certificates, thus providing you a higher level of confidentiality.
  4. Establishing a trust to hold the shares on your behalf.

If you want to learn more about changes in legislation concerning Bearer Shares and about alternative solutions, you can get the information in the chapter “Legislation Changes”.