• Written by: James Carey, CA CTA
• 15/03/2026

Bearer Shares in Australia | Abolished, But Foreign Companies Must Know the Rules

Bearer shares have been abolished in Australia since 2000. But if your foreign company uses bearer instruments, here's what you need to know before registering an Australian entity.

Last updated: March 15, 2026

• Australia abolished bearer shares in 2000 via amendments to the Corporations Act 2001
• Foreign companies with bearer share structures can still register in Australia but must identify all beneficial owners
• AUSTRAC treats bearer shares as a high-risk indicator under AML/CTF rules
• Many countries have now abolished or immobilised bearer shares following FATF recommendations

What Are Bearer Shares?

Bearer shares are equity instruments where physical possession of the share certificate determines ownership. Unlike registered shares — where the owner's name appears on the company's share register — bearer shares have no recorded owner. Whoever holds the paper certificate is the legal owner.

This anonymity made bearer shares attractive for privacy and asset protection. However, it also made them a vehicle for money laundering, tax evasion, and the concealment of beneficial ownership — which is precisely why most developed nations have moved to eliminate them.

When and Why Australia Abolished Bearer Shares

Australia abolished bearer shares through the Company Law Review Act 1998, which took effect in stages with the final abolition completing by 2000. The changes amended the Corporations Act to:

• Prohibit the issue of new bearer shares by Australian companies
• Require conversion of any existing bearer shares to registered shares
• Mandate that all shares be entered on the company's share register with the name and address of the holder

The abolition was driven by three concerns:

1. Anti-money laundering: Bearer shares were identified as a money laundering risk in FATF (Financial Action Task Force) assessments
2. Tax transparency: The ATO could not track income flowing to anonymous shareholders
3. Corporate governance: ASIC had no visibility over the true ownership of companies using bearer instruments

Today, no Australian company can issue bearer shares. All shares in Australian Pty Ltd companies, public companies, and registered foreign companies must be registered shares with the holder's name recorded on the share register.

Impact on Foreign Companies Registering in Australia

While Australia has abolished bearer shares domestically, many foreign companies entering Australia may come from jurisdictions that historically permitted bearer instruments. This creates specific compliance obligations.

Registering a Branch (ARBN)

When a foreign company registers an Australian branch under Part 5B.2 of the Corporations Act 2001, ASIC requires disclosure of the company's directors and any persons authorised to act on its behalf. While the foreign company's share structure is not directly replicated in Australia, ASIC may request information about the company's ownership as part of the registration process.

If the foreign parent company has bearer shares in circulation, it must:

• Convert them to registered shares before registration, or
• Demonstrate that beneficial owners have been identified through other means
• Ensure AML/CTF obligations are met through its Australian local agent and banking relationships

Incorporating an Australian Subsidiary (Pty Ltd)

Foreign companies setting up an Australian Pty Ltd subsidiary must issue registered shares only. The subsidiary's share register must record:

• The shareholder's name (typically the foreign parent company)
• The shareholder's address
• The date the shares were issued
• The class and number of shares held

The foreign parent's own share structure does not change — but Australian banks and professional service providers will conduct due diligence on the ultimate beneficial owners. Bearer share structures in the parent company will trigger enhanced scrutiny.

AML/CTF Implications

Under Australia's Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), bearer shares are treated as a high-risk indicator. This has practical consequences for foreign companies:

Banking and Financial Services

Australian banks are required to conduct Customer Due Diligence (CDD) on all business customers. When a foreign company's ownership structure involves bearer shares — even in an overseas jurisdiction — banks will:

• Require identification of all beneficial owners holding 25% or more of the company
• Apply Enhanced Customer Due Diligence (ECDD), including more detailed identity verification
• Monitor transactions more closely for suspicious activity
• Potentially decline the banking relationship if beneficial ownership cannot be established

AUSTRAC Reporting

AUSTRAC (Australian Transaction Reports and Analysis Centre) has identified bearer share structures as a typology associated with money laundering. Companies with historic bearer share structures should expect:

• More detailed questions from Australian financial institutions
• Potential Suspicious Matter Reports (SMRs) if beneficial ownership is unclear
• Ongoing monitoring requirements even after initial due diligence is completed

Which Countries Still Allow Bearer Shares?

The global trend is firmly against bearer shares. Following FATF recommendations, most jurisdictions have either abolished them outright or introduced immobilisation requirements (where bearer shares must be held by a regulated custodian who records the owner's identity).

Abolished or Effectively Eliminated

Immobilised (Must Be Held by Custodian)

Still Permitted (Limited)

A small number of jurisdictions still permit bearer shares in some form, though the list continues to shrink. These include certain jurisdictions in the Caribbean and Pacific Islands, though even there, international pressure is driving reform.

What Foreign Companies with Bearer Shares Should Do

If your company has — or historically had — bearer shares and you are planning to register in Australia, take these steps:

1. Convert to Registered Shares

Before approaching Australian authorities or banks, convert all bearer shares to registered shares in your home jurisdiction. This is the cleanest path and eliminates the AML/CTF risk flag entirely.

2. Prepare Beneficial Ownership Documentation

If conversion is not possible or not yet complete, prepare comprehensive documentation identifying all beneficial owners. This should include:

• Certified copies of the share register or equivalent
• Statutory declarations from directors identifying beneficial owners
• Evidence of the chain of ownership from the company to natural persons
• KYC (Know Your Customer) documentation for each beneficial owner

3. Engage Australian Professional Advisers

Work with an Australian corporate services provider who understands bearer share structures and can:

• Advise on ASIC registration requirements
• Facilitate banking introductions with appropriate due diligence preparation
• Ensure your local agent and registered office arrangements meet compliance requirements
• Manage the ASIC registration process with full disclosure

4. Plan for the Beneficial Ownership Register

Australia's proposed beneficial ownership register will require disclosure of ultimate beneficial owners. Companies with bearer share histories should be prepared for this additional transparency requirement. See our guide to the beneficial ownership register for details.

Bearer Shares vs Nominee Shareholders

Some foreign companies confuse bearer shares with nominee shareholder arrangements. These are fundamentally different:

Nominee shareholders are a legitimate and widely used structure in Australia for foreign companies seeking privacy while maintaining full regulatory compliance.

Frequently Asked Questions

Are bearer shares legal in Australia?

No. Australia abolished bearer shares in 2000 through amendments to the Corporations Act. No Australian company can issue bearer shares. All shares must be registered shares with the holder's name, address, and holding details recorded on the company's share register.

Can a foreign company with bearer shares register in Australia?

Yes, but the company must identify all beneficial owners to satisfy ASIC registration requirements and AML/CTF obligations. Australian banks will apply enhanced due diligence. Converting bearer shares to registered shares before registering in Australia is strongly recommended.

Why were bearer shares abolished?

Bearer shares were abolished to combat money laundering, tax evasion, and the concealment of beneficial ownership. The FATF identified bearer shares as a significant money laundering risk, prompting Australia and most other developed nations to eliminate them.

What is the difference between bearer shares and registered shares?

Registered shares have the owner's name recorded on the company's share register, providing a clear record of ownership. Bearer shares are owned by whoever physically holds the certificate — there is no recorded owner. Australia only permits registered shares.

Do bearer shares affect my ability to open an Australian bank account?

Yes. If your foreign parent company has or had bearer shares, Australian banks will apply Enhanced Customer Due Diligence (ECDD), requiring detailed identification of all beneficial owners. Some banks may decline the relationship if beneficial ownership cannot be established.

Which countries still allow bearer shares?

Very few. Most developed nations have abolished bearer shares or required immobilisation (custody by a regulated institution). The UK abolished them in 2015, Hong Kong in 2014, and New Zealand in 2014. Some Caribbean jurisdictions still permit them in limited form.

Need Help Registering in Australia?

If your company has a bearer share structure and needs to register in Australia, our team can guide you through the process — from ASIC registration to banking setup and ongoing compliance.

Get Expert Advice on Australian Registration

Related Resources

• Beneficial Ownership Register Australia — upcoming register requirements
• ASIC Foreign Company Registration Guide — step-by-step branch registration
• Nominee Shareholder Services — legal alternative to bearer shares
• Company Formation Services — Pty Ltd vs branch structure
• Banking Support Services — Australian bank account setup for foreign companies