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Andrew Henderson

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What are Bearer Shares? The Ultimate Guide

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Dateline: Tbilisi, Georgia

Have you ever heard of bearer shares? If you have been trolling around the depths of offshore forums and blogs, chances are that you’ve probably heard somebody talking about them.

Bearer shares are, in a sense, the loch ness monster of the offshore world. They exist in the abyss of the shady history of the offshore industry and people often don’t know exactly how they work.

Even though bearer shares are no longer that useful, their myth refuses to die.

That is why, today, I want to bring them out into the light so that you can see what bearer shares are, why they have been under scrutiny, and why you probably want to avoid them.

If you have been watching any of our videos or have read some of the 1,000+ articles here on the blog, you probably know that I take a bit of a different approach to this offshore stuff than a lot of people who are out there.

You see, when I started Nomad Capitalist, the offshore industry was kind of swampy and it had a pretty bad reputation. But I knew that underneath that bad reputation, there was a way to legally go offshore and still increase my tax freedom.

Since then, I have devoted more than a decade to empowering six- and seven-figure entrepreneurs who want to play by the rules, follow the law, and go where they are treated best so that they can keep more of their own money.

The offshore world of today is the result of constant evolution and increasing transparency. The offshore world of old, however, was about people hiding money in Swiss banks and using numbered and anonymous bank accounts.

Bearer shares were a part of this old world.

This is still the world you see represented on TV and most people who are not involved in the offshore industry still think that is what’s happening.

But, to a large extent, that is no longer the world we live in.

Now, when it comes to bearer shares, there is a bit of legitimacy to them, but the way most people talk about them gives you the idea that they are looking to cut a corner or pull some hack to evade taxes.

Others will argue that all they want is privacy, but the privacy that people are generally seeking with bearer shares just doesn’t exist anymore.

What we have now is a far more transparent world. A world where bearer shares no longer belong. Let me tell you why.

What are Bearer Shares and Why did They Die?

What is a Bearer Share?

For any business that opts for equity financing, there is a certain number of shares of stock issued that allow others to invest money in the company, giving them proportionate ownership. A bearer share is a normal share in such a company. It is signed by the Chairman of the Board or Sole Director of the company and comes with all the same benefits as any other share.

The difference is that the name of the owner is not recorded on the physical stock certificate nor in the public register.

Instead, the name of the owner is simply listed as “The Bearer.”

Thus, it is a “bearer” share.

This means that ownership of the share is determined entirely by the physical possession of a piece of paper. The only way of knowing who the owner is, is if they are holding the stock certificate in their hand.

This creates a situation that is basically like finders, keepers where possession is 9/10ths of the law. Ownership is transferred the moment the physical document is given to someone else.

If we were to do a brush pass in Central Station and you took the briefcase with the shares in them, you would now be the owner of the company.

Not only that, but you would also assume all the rights that come with owning shares in a company, such as dividends. When the company disperses dividends, the bearer can present the physical document to the firm and receive the corresponding payout.

No company registration agency, law firm, bank, or other public or private databank registers the name of the owner or tracks the transfer of ownership. This is what enables the bearer to maintain their privacy and anonymity.

The Advantages of Bearer Shares

There are several pros and cons to personally owning bearer shares. There are far more disadvantages, but many people argue that the limited advantages still outweigh the numerous disadvantages.


The first and most compelling advantage is the privacy factor. Because there is no public register of the company, there is no indication of who officially owns it.

Even if a name was initially recorded, the shares could have been transferred since their creation, making it impossible to identify the current owner.

Neither the company, the director, the chairman of the meeting of shareholders, nor company officials have any obligation to determine the circumstances by which the current owner obtained the certificate.

This level of privacy grants the bearer the ability to protect their assets in numerous situations, from liability suits to divorce proceedings.

But Nomad Capitalists do not need this type of privacy.

The six- and seven-figure entrepreneurs that we work with at Nomad Capitalist do not express that many concerns about privacy and secrecy because they naturally understand that they are running an active business and there is a chance that someone may find that out.

For them, being offshore is not about privacy, it is about being able to choose their own tax rate through proper planning. It also means that they can set up proper asset protection mechanisms so that someone can’t just come and take all their money the way they might do in their home country.

But they don’t necessarily need privacy to do that.

This is good news because governments around the world – through pressure from high tax countries or of their own volition – have decided to create public registries for companies and have prohibited the use of mobile bearer shares.

While we’ll discuss this more in depth in just a moment, the bottom line is that the privacy previously afforded by bearer shares is largely nullified.

There are ways you can still gain some privacy, whether that’s companies owning companies or some other hack to make it harder for someone to find you. But, eventually, we are going to have such a transparent world that if someone really wants to find you, they’ll be able to do so.

If you are just running a business selling stuff online, though, is it really the end of the world? For most people, the answer is no.

Bearer shares briefcase exchange
The Central Station brush pass is the stuff of movie scenes, but in the days of mobile bearer shares, you could literally transfer ownership of a company just by handing over your share certificates.

Ease of Transfer

The second advantage to having bearer shares that you’ll hear people touting online is how easy it is to transfer them.

You simply hand them over.

When bearer shares are sold, there is no requirement to transfer inscriptions on the share certificate. You can transfer all the relevant rights to a company by physically transferring the certificate from the seller to the buyer.

That’s it.

While the main reason for doing this was originally to maintain ownership privacy, it has also made it stupidly easy to transfer ownership. This decreases the administrative burden of companies who no longer need to track every transaction in share ownership. It also allows for increased liquidity in capital markets.

However, this ease of transfer also means that your shares can be easily stolen, lost, broken, burned, or fall into the wrong hands, making the company vulnerable to a hostile takeover. All of which leads to the disadvantages…

The Disadvantages of Bearer Shares


Because the shares belong to whoever physically possesses the stock certificate, robbery is an incredibly high risk with bearer shares. In some cases, losing the shares could equal losing the company.

The total lack of record-keeping makes it nearly impossible to prove loss or theft, which can be difficult for those who may have lost their shares as well as anyone who wants to buy shares and has no way of ensuring that they have not been stolen.

Communication Issues

The lack of a registry and the fact that the current owner is never fully known can lead to communication issues. For instance, a company may have difficulty notifying shareholders about an annual meeting.

Proof of Ownership

There can also be problems when a company wants to open an office in another country and needs to verify that the company belongs to the shareholder. Because the owner’s name is not stated on the certificate, some countries will not accept the document as proof of ownership.

Banks Don’t Like Them

Banks do not like companies that use bearer shares because they have no way of knowing when the ownership of a company may change, leaving the bank exposed to unknown risks.

This means that many banks will refuse to open an account for a company that has issued bearer shares. As bearer shares become less common, more and more banks are refusing to open accounts for the companies that are left who still use them.

There are certainly some banks who will still accept the risk, but the choices are fewer and farther between. And there is no guarantee how much longer the remaining banks will continue to accept these companies either.

Tax Problems

While many people who adopted bearer shares in the past cared little about following the law, here at Nomad Capitalist we focus on doing things 100% by the books.

So, while the folks of the past may have preferred bearer shares so that they could hide their shady business practices and evade taxes, Nomad Capitalists may actually want to avoid bearer shares to prevent potential tax issues.

Here’s why: If all you need to transfer ownership of a company to another person is to hand them your certificate, then passing a certificate for a multi-million-dollar company to someone else becomes a highly taxable event. And if they hand that paper back to you, more taxes are due.

Automatic Target

People have used bearer shares to do some pretty shady things over the years. Some folks have used them to avoid transfer taxes, others cleverly handed ownership over to a friend on a temporary basis so that they could deny that ethey owned the asset in court.

Other people have used bearer shares to do some downright awful things, like cover up money laundering and fund terrorist activity.

While issuing bearer shares for your company doesn’t mean that you will do any of these things, tax authorities across the globe really don’t care. The moment you use bearer shares, most governments will automatically suspect that you are evading taxes.

Why Did Bearer Shares Die?

Why did bearer shares die?
No good bank will accept a bearer shares company these days.

With all these disadvantages, it is easy to understand why governments around the world came after bearer shares and have slowly killed the practice.

Bearer shares have been a significant challenge for tax authorities for decades, but what finally motivated them to take them down was 9/11.

Because bearer shares had been used to cover up money laundering, terrorism financing, and other criminal activity, the US government sought to cut off terrorists’ funding sources and went after offshore banking and bearer share companies via the Patriot Act in 2003.

Many jurisdictions followed suit, either restricting the use of bearer shares or abolishing them altogether. By 2015, virtually all offshore banks had caved to the pressure and it is now nearly impossible to get a bank account for a company with mobile bearer shares.

I am for as little regulation as possible, but people were using bearer share companies to do such terrible things that it is not surprising that they have been phased out or, in the places where they do still exist, “immobilized.”

Mobile vs. Immobilized Bearer Shares

Unlike mobile bearer shares that are totally unregistered, immobilized bearer shares are placed in the custodianship of a licensed fiduciary or are held by a bank who registers the business and keeps records of who owns what and any transfers that are made.

Under these conditions, the bank serves as a trustee and the bearer shares are literally immobilized because the bank that opened the company not only manages the shares but also holds the physical copies of the shares in a safe.

This immobilization has eliminated the risks involved with bearer shares to a large degree. No more brush passes in Central Station! Plus, banks don’t have to wonder what is going to happen with their assets.

But, of course, this nullifies the privacy benefits afforded by mobile bearer shares because banks must now provide any information that tax authorities request according to the automatic exchange of information agreements that have become so common in a post-9/11 world.

There’s not much in the way of mobile bearer shares anymore, but it’s not something I lament. I know I am the goody two-shoes of this industry, but I just don’t see the purpose of mobile bearer shares for the average active business owner who just wants to reduce their tax rate.

I absolutely share the frustration of watching high tax countries take a hatchet to offshore centers. I think it’s totally unfair how countries like the US and the UK go to tiny little islands that have very few other ways to raise revenue and make their life difficult by trying to cut down their offshore financial centers.

It is very unfortunate and heavy handed.

But the reality of the world that we live in – for you as the pragmatic entrepreneur – is that governments want to know what is going on and who owns companies. This means that there are more disclosure forms than ever. They may not all be necessary, but they are not all draconian either.

Immobilized bearer shares
Immobilized bearer shares are held under lock and key at the bank and recorded in a register.

Where Can You Still Get Bearer Shares?

There are still several countries that allow for immobilized bearer shares, but the number of jurisdictions has been declining consistently over the years. Bearer shares were prohibited in Great Britain in 2015 and Switzerland just abolished them this year. You can still use immobilized bearer shares in Bulgaria, but they are largely spurned in the EU.

Some offshore jurisdictions have also banned bearer shares, including Jersey, the Bahamas, Isle of Man, and Mauritius. You can, however, deposit immobilized shares in a local bank in St. Vincent and the Grenadines.

Other countries, such as Belize and BVI, have adopted an in-between solution to comply with international organizations and still offer customers the ability to register and use companies.

In some places, this hybrid version comes at a cost. For example, you can still use immobile bearer shares in Panama, but the government will impose a punitive 20% withholding tax on the distribution of dividends.

In recent years, the only country in the world that still allowed mobile bearer shares was the island nation of the Marshall Islands. You could quickly set up an IBC there for a few thousand dollars and enjoy zero tax, simple business administration, and total anonymity via bearer shares.

However, the OECD stepped in back in 2015 and, with the support of other tax watchdogs, applied just enough pressure to convince the Marshallese government to amend the Marshall Islands Associations Law to prohibit the use of mobile bearer shares.

Introduced in 2017, the amendment required that holders and beneficial owners of bearer certificates in the Marshall Islands disclose to the Marshall Islands Registrar of Corporations the names of the shareholders, the number of bearer certificates they hold, and the number of shares represented by each certificate.

This information had to be disclosed by November 9, 2018 and any certificates that had not been disclosed by May 8, 2019 would be canceled.

With this change, you could say that mobile bearer shares died as of May 8 of this year.

However, there are still people out there who will try and sell you on mobile bearer shares in some far-off jurisdiction or convince you that immobilized bearer shares are still the way to go. Because there are still so many of these people out there, let’s do a little thought experiment to see how things would play out with your totally anonymous bearer share company:

The Hypothetical Private Offshore Company

Marshall Islands
The Marshall Islands was one of the last countries in the world to get rid of mobile bearer shares.

Let’s say you have found a jurisdiction where mobile bearer shares still exist and do not have to be registered under any circumstances.

Now, as we always talk about here at Nomad Capitalist, even with this hypothetical (and now highly improbable) situation, you would still need to do proper tax planning to make such a business structure work in your favor. You would need to consider where you are personally located, where your business is located, where the shareholders are located, and more.

The country where you are paying taxes right now will never recognize your bearer shares as a legitimate way to evade their taxes. The only way to do that without hiding the way people did back in the 80s is to do a lot of international tax planning.

Now, let’s say that you have put your personal tax affairs in order so that everything is legal and you are reporting everything that needs to be reported. Then, you form your IBC in your hypothetical jurisdiction that allows mobile bearer shares.

The idea is that you could then open an anonymous bank account because the business that owns the account has no named owner and, even if it did, it could easily be passed from one owner to the next without ever being recorded.

Unfortunately, this does not work in real life (even in our hypothetical situation where mobile bearer shares still exist) because no reputable bank and certainly no bank in a high-quality jurisdiction like Singapore is going to take your bearer shares.

Heck, they won’t even touch you with a 50-foot pole!

Banks in Singapore, Hong Kong and Europe have a hard-enough time keeping accounts open for tax haven companies that are two or three rungs up the ladder. Bearer share companies are now at the bottom of the food chain, if they aren’t already extinct.

And even if you found a bank that would take your bearer shares, bank account reporting requirements for US and other western citizens mean that you still have an obligation to report whatever is in that account.

These days, there is really no way to be anonymous, not to the public and certainly not to the government.

Not if you’re being honest.

So, even if they still existed, I just don’t see a whole lot of benefit to owning mobile bearer shares in this day and age.

If you are running an active business – which is the world I come from – all this hassle is never going to pay off. The amount of privacy and secrecy that you are going to get out of the deal is minimal, especially compared to the limitations you will place on your business for banking and credibility.

In my opinion, the juice isn’t worth the squeeze.

The World We Live In

Here at Nomad Capitalist, we have been doing more trust work these days. I recently got a list of jurisdictions where you can set up a trust and I couldn’t help but get excited about some of them.

“Oh, Mauritius, interesting!”

But just because something is interesting doesn’t mean you should go after it. I find that many people who play around with the offshore industry are attracted by its sex appeal. They want to be a badass like James Bond and plant a flag here and get a bank there and exchange bearer shares in a suitcase at the airport.

Let me tell you something, I have been doing this stuff for a long time and the James Bond sex appeal has worn off.

What has not worn off, however, is the sex appeal of getting to keep more of my money and use it to live where I want, when I want. I don’t feel like a badass. I just feel like a normal person.

If you came to this site looking for a way to hide from the government or get a little James Bond excitement in your life, I have to tell you that it is not going to work and you are going to end up with a big problem, legally and tax wise for sure.

This stuff that worked in the 70s and 80s was illegal then and it is illegal now. The only difference is that governments have figured out a way to circumvent the illegal activity. There are so many rules and laws and ways to catch you. It is just a dumb thing to do.

Not only is it no longer the 1980s but thinking that bearer shares will solve all your problems is just a symptom of a bigger mental attitude problem that I have witnessed in the people who have come to us and don’t succeed.

The one thing they have in common is that they have unrealistic expectations. They think that they can change almost nothing in their life and still get massive tax savings.

They think they can live in Europe for ten months a year and then get a mobile bearer shares company in the Marshall Islands and everything will work out and they won’t have to pay tax.

It doesn’t work that way, not if you want to be in compliance.

And, sure, there are plenty people who just don’t care about compliance and think that no one will ever find them.

Good luck with that approach!

It is becoming easier to find people. The European Union and the UK are all cracking down on tax havens to disclose more and more information, apply more economic substance tests, and shut down questionable practices like bearer shares.

The World We Live In - Transparency
For the world we live in, successfully going offshore will require transparency.

The Marshall Islands is the perfect example of how organizations like the OECD and big governments are pushing their agenda on the rest of the world and forcing them to change their laws and institutions.

There are still people who believe what they watch on TV and in the movies and think that they can just get a bearer shares company and live tax free. But if it were that easy, there would be no Big Four and there would be no Nomad Capitalist. Everybody would be setting up companies with bearer shares and living in France and paying no tax.

But it doesn’t work that way.

If you are staying in a high tax country and you’re paying 40-50% in taxes, there are still plenty of benefits to moving your company offshore. But the hacks of the 1980s – of nobody knowing who owns what and flying under the radar and being able to do whatever you want – have largely come to an end.

And this isn’t just because things like bearer shares have been phased out under the heavy hand of big government’s like the US but because, operationally speaking, it is hard to run a company when no bank wants to take on the high risk of a company with no known owner.

For the average person who is simply running a business, you are going to get all the tax benefits and asset protection benefits that you want by simply going offshore.

For all the ancillary things of privacy… I can understand the desire for them, but in this day and age, they have been ruled out. That is why you don’t hear me talking about bearer shares. I don’t see how they really fit into the conversation if your goal is to legitimately reduce your tax rate.

For the everyday entrepreneur who wants to keep things legal and have a clean operating structure, my recommendation is to set up in a legitimate jurisdiction with a straightforward approach that is going to give you access to better banks that will easily interface with services like Stripe and PayPal where your customers want to pay you.

Everywhere I look these days, the push is to make things more transparent. And, from a business standpoint, that really is for the best.

The bottom line is that going offshore is going to require some form of transparency.

In the world we live in with all these different crackdowns on tax evasion, anonymity for hiding from the government does not really work anymore.

I know there are still folks who want to pull some trick or cut corners. I know I am the goody two-shoes of the offshore business and I say dot all the I’s and cross all the T’s. But I really believe that, when I look at the way the world is going, not only should you just do it regardless but you should figure out a way to work within the law so that you are always going to be protected.

We have helped hundreds of people successfully plan and implement holistic offshore strategies here at Nomad Capitalist, never once have I used bearer shares. In the world we live in, there are better ways to live a life of freedom and prosperity.


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