FAQs

A beneficial owner is a person who ultimately owns or controls a company or other legal entity. A legal entity may have numerous beneficial owners.

A beneficial owner must be a natural person. A legal person/entity (for example a company or foundation) or a legal arrangement (for example a trust) cannot be listed as the beneficial owner of a company.

The definition of beneficial owner is broad and seeks to capture all those individuals who hold any definable interest through whatever means in the legal entity concerned or who are able to exercise control over the entity concerned. Beneficial ownership includes both direct and indirect ownership and control, including control via other means (for example, through an informal agreement).

For many legal entities, the beneficial owner, director and shareholder may be the same person. This is often the case for simpler corporate structures, for example owner-operated local businesses.

However, in other cases, the beneficial owner may have appointed a nominee shareholder to hold the shares on their behalf, or the shares may be held by another company. The Database exists to act as a record of the true ownership, behind the various layers that a company may legally utilise in a corporate structure.

Please see the Authority’s Beneficial Ownership Act 2024 Guidance for more information.

A registrable beneficial owner is any individual who owns or controls more than 25% of a legal entity. The Beneficial Ownership Act 2017 requires that the details of any registrable beneficial owner be recorded on the Database. If a beneficial owner has an ownership or control interest in a company, but that interest is 25% of the total ownership or less, the required details of the beneficial owner are not legally required to be recorded on the Database, although there is nothing preventing the required details of a non-registrable beneficial owner being voluntarily included on the Database provided the beneficial owner grants the nominated officer permission for their inclusion.

In accordance with sections 11 (the “required details”) and 20 (Compulsory submission of registrable beneficial ownership information to the Department) of the Act, the following information relating to registrable beneficial owners must be recorded on the Database:

• Name;
• Usual residential address;
• Service address (if differing from the residential address);
• Nationality;
• Date of Birth;
• The date on which the beneficial owner acquired an interest in the legal entity; and
• The nature and extent (expressed as a percentage) of the beneficial owner’s interest in the legal entity.

The above items are referred to in the Act as the ‘required details’.

Where a nominated officer (with the assistance of the legal owners of a company, for example the shareholders) has ascertained that there is no single beneficial owner owning or controlling an interest greater than 25%, and is in receipt of evidence to this effect, a declaration must be made on the Database confirming this to be the case.

Please note that the nominated officer must maintain accurate, up to date records of each beneficial owner (including the registrable beneficial owners) even if none are registrable on the Database. These records must include the required details and the information from a reliable and independent source which verifies the required details.

An annual statement of compliance must be submitted to the Department confirming that the nominated officer has complied with their obligations under the Act, the required details in respect of any registrable beneficial owner have been submitted to the Department, and all information entered on the Database is up to date and correct. This statement must be made via the Companies Registry section of the Government’s Online Service website.

The legal owner must provide the required details and information which verifies those details, to the nominated officer as soon as possible or within 21 days:

• From the date of the legal entity is incorporated;
• Of becoming aware or first having reasonable cause to believe that a relevant change to the required details of a beneficial owner has occurred; or
• Upon receipt of a notice from the nominated officer requesting the required details.

Beneficial ownership information must be submitted to the Department (Companies Registry) by the nominated officer as soon as reasonably practicable but in any event within 21 days of the information being provided to the nominated officer by the legal owner.

The date on which the beneficial owner acquired the registrable interest in the legal entity should be recorded as the Appointment Date, not the date on which the information was submitted to the Database.

Legal owners, beneficial owners and any intermediate owners or nominees should work with the nominated officer to identify and evidence beneficial ownership and control through any number of arrangements or structures.

Various documents can be presented in order to evidence the required details, and therefore the beneficial ownership, of a company. These may include, but are not limited to:

• Corporate structure charts or diagrams;
• Share certificates;
• A register of members or shareholders;
• Declarations of trust (and other relevant trust documentation);
• Nominee agreements; and
• In the case of a foundation, the foundation rules/instrument/charter and/or the Dedicator’s letter of wishes.

There may be instances whereby it is necessary to rely on a cumulative variety of non-standard evidence to identify and verify the beneficial ownership information due to the atypical nature of the specific ownership or control arrangement. The utilisation of non-standard evidence may be more likely when attempting to verify a control interest, particularly ‘control via other means’.

The Act is not prescriptive in what kind of evidence can be used to verify the beneficial ownership of a company, except in that it must originate from a reliable and independent source.

It is a legal requirement for the legal owners of an entity to provide the nominated officer with beneficial ownership information relating to each beneficial owner, and for the nominated officer to subsequently submit the details of any registrable beneficial owners to the Department; to not do so would constitute an offence under the Act. As the party responsible for overseeing compliance with the Act, the Authority possesses powers to: 1) report any offences to the Attorney General’s Chambers for criminal prosecution, or 2) to issue fixed value civil penalties in lieu of criminal proceedings. Further information on the scope of the Authority’s civil penalty powers in relation to the Act can be found in the Beneficial Ownership (Civil Penalties) Regulations 2022 (“the Regulations”). The Civil Penalties are fixed amounts of either £1000 or £5000 depending on the nature of the offence. They are levied per contravention. The Regulations were approved by Tynwald on 20 July 2022 and came into operation on 31 July 2022.

As a respected offshore financial centre, the Isle of Man is committed to meeting its obligations with respect to international standards, such as the Financial Action Task Force (“FATF”) Recommendations, particularly Recommendation 24.

FATF Recommendation 24 relates to transparency and beneficial ownership of legal persons:

“Countries should ensure that there is adequate, accurate and up-to-date information on the beneficial ownership and control of legal persons that can be obtained or accessed rapidly and efficiently by competent authorities, through either a register of beneficial ownership or an alternative mechanism.”

The Isle of Man prides itself on being responsive to international needs whilst maintaining a business-centric approach. The Act and its obligations are there to help make it more difficult for criminals or their enablers to hide their identity or involvement in criminal activity and to prevent the use of Isle of Man legal persons in the movement or concealment of illicit funds or criminal assets. The legislation was developed in line with the Isle of Man Government’s commitment, made to the United Kingdom, to enhance agreements for the sharing of information about the beneficial ownership of corporate and legal entities.

Access to the Database is limited to certain persons or bodies (defined as competent authorities in the Act), and the use by such is limited to permitted purposes. The competent authorities who may access the Database are:

• The Financial Services Authority
• The Government Technology Services Division of the Cabinet Office
• The Financial Intelligence Unit
• The Attorney General
• The Assessor of Income Tax
• The Chief Constable
• The Collector of Customs and Excise

The following additional bodies may also access the Database for a permitted purpose:

• The Department for Enterprise
• The Gambling Supervision Commission
• Employees of the Cabinet Office
• Any other person authorised in writing for that purpose by the Minister for the Cabinet Office

From the 01 January 2025, ‘obliged entities’ may also access the Database for the purposes of conducting due diligence. ‘Obliged entities’ has the meaning of a person or body, carrying out either a business or activity to which the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 or the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 applies.

The Companies Registry (within the Department for Enterprise) has ownership of the Database. Nominated officers can submit beneficial ownership through the Isle of Man Government’s Online Services Website.

Access to the Database is restricted to the legal entity’s appointed nominated officer. The nominated officer (if not already enrolled) would need to request an enrolment code from the Department (Companies Registry) to link a company/legal entity for whom they act as nominated officer to their Isle of Man Government Online Services account. The Department can be contacted at BOAEnquiries.DFE@gov.im.

In accordance with section 5(1) of the Act, the following types of legal entity have beneficial ownership obligations, and thus must submit details of any registrable beneficial owners to the Database:

A company to which the Companies Acts 1931 to 2004 apply, including:

• A company within the meaning of the Companies Act 1931
• A protected cell company within the meaning of the Protected Cell Companies Act 2004
• An incorporated cell company within the meaning of the Incorporated Cell Companies Act 2010 to which the Companies Act 1931 to 2004 apply
• An incorporated cell within the meaning of the Incorporated Cell Companies Act 2010 to which the Companies Act 1931 to 2004 apply
• A company continued in the Island under Part 1 of the Companies (Transfer of Domicile) Act 1998

A company to which the Companies Act 2006 applies, including:

• A company within the meaning of the Companies Act 2006
• A protected cell company within the meaning of the Companies Act 2006
• An incorporated cell company within the meaning of the Incorporated Cell Companies Act 2010 to which the Companies Act 2006 applies
• An incorporated cell within the meaning of the Incorporated Cell Companies Act 2010 to which the Companies Act 2006 applies
• A company continued in the Island under section 162 of the Companies Act 2006 (application for consent to be continued in the Isle of Man)
• A company re-registered under Part IX of the Companies Act 2006

Other legal persons, include:

• A limited liability company to which the Limited Liability Companies Act 1996 applies
• A limited partnership to which section 48B of the Partnership Act 1909 (legal personality) applies (“limited partnership with legal personality”)
• A foundation within the meaning of the Foundations Act 2011

It may be the case that the percentages of interest of the registrable beneficial owners exceeds 100% in certain circumstances for example if a legal entity has issued 5 shares and those 5 shares are held jointly by two beneficial owners (with the share certificate naming both persons jointly) then the Database record should display both persons as holding an 100% interest.

Where a beneficial owner possesses a different percentage of ownership compared to their controlling interest, but where both interests exceed the registrable threshold, the beneficial owner should be recorded on the Database twice, reflecting the different percentage/nature of interests that they hold. This may result in their total interest exceeding 100%. An example of this could be due to the different share types they hold; some shares may confer voting privileges whilst others provide an entitlement to income or dividends only. If the percentages of ownership and control can be calculated as distinct registrable values then they should be recorded separately on the Database, as two different Database entries, for example Person A 26.37% ownership and Person A 100% control.

The nominated officer should not record a mean average between a beneficial owner’s separate ownership and control interests, as this will not result in an accurate portrayal of the beneficial ownership. In these circumstances, a person’s total interest may appear to exceed 100%; however, it will be split into separate ownership and control entries. This may give rise to a situation whereby a person’s ‘Ownership’ may fall below the reportable threshold, whilst their ‘Control’ is registrable (or vice versa).

Please bear in mind that, where calculable, interests should be recorded to two decimal places. Figures should be precise and not rounded up or down to whole numbers.

There are currently 7 available natures of interest to select from.

They are:

• Ownership and control;
• Ownership;
• Control;
• Control as Corporate Trustee;
• Control as Liquidator;
• Control as Council Member; and
• Control via other means.

The Department reserves the right to create or amend the available options should there be need to.