So, before we explore all the details about the topic, let us understand who a Nominee Director is and his tasks in a company. A Nominee Director is an individual who is officially enrolled intermediary who functions as a company director.
Many companies use them for a variety of purposes, and it is entirely legal. In the jurisdictions of some countries, the company directors’ names are placed on the public records. The Nominee Director of a company serves as a proxy for the beneficiary owners.
The issue of a power of attorney under the Nominee Director’s name after the appointment (beneficial owner) happens. Based on the documents, the person who has a power of attorney acts on behalf of the company and can sign documents, contracts, and open bank accounts.
A Power of Attorney is a service signed for one year at a time, renewed each year and stopped at any requested time.
Who is a Nominee Shareholder?
A Nominee Shareholder is an individual legally appointed to shield the real owner of the company for being publicly associated with the ownership of the company meaning that when one selects a Nominee Shareholder, their benefits are protected without making their details public. The shares are held under trust, backed by a legal ‘Declaration of Trust’, signed by the nominee.
The Declaration sets out that the shareholder is bound to fulfil all the instructions of the beneficiary related to the allocation of dividends, share transfer, and shareholders’ resignation, etc.,
The Declaration of Trust is a service signed for a one-year duration at a time, renewed every year, and stopped at any requested time.
What does a Nominee Director do in a company?
So, now we know who a Nominee Director is, let us now explore the tasks he carries out in a company.
The most and primary function a Nominee Director carries out is to shield the actual owner of the Omani Offshore Company from any publicly apparent relationship with the business. This is achieved at different levels, depending on the circumstances and wishes of the customer.
The appointed external director does not actively participate in the regular affairs but merely fills the position, at the most basic level. Nominee Director’s participation in the case of the customer (owner of the company) signing the documents is a relatively small and fixed ‘responsibility fee’ that is chargeable.
In particular business situations, such a procedure can be acceptable, even though the active management by the client significantly reduces its level of confidentiality. Furthermore, this may lead to the issues relating to the control and management of the company being transferred to the representative (the owner) but not to the director, following the adverse personal tax consequences for him. This leads to a need for greater participation of the nominee director.
Hence, at this stage, the nominee director becomes a part of the daily business.
More about this role
A Company under the owner’s management
As a beneficial owner of the company, you may appoint a Director of the company. Though this appointment does not directly enter in the public file in the commercial register. The registered and licensed agent shall hold this information at the company’s registered office. Also, the company directors’ details will reflect in some of the company’s primary documents.
A Company under the appointed Nominee Director’s management
In the case of this situation, the company’s management is entirely taken over by a professional third-party managing director. The owner of the company may appoint any other directors of the company, may it be any person of the owner’s trust.
What about the bank account?
As the Offshore banks are aware of the Nominee services, a power of attorney provided to the bank, and only the beneficial owner will have the authority over the account. Hence, the nominee has no control over the bank accounts of the company.
What more shall you take into consideration?
There are two advantages if the company owner acts as a director as well.
1. The company’s corporate structure remains uncomplicated and straightforward.
2. The company’s maintenance costs are at the minimum.
But there are some disadvantages in doing so, as well.
The owner that acts as a director of his offshore company may face local tax consequences in his actual residence country. A foreign company may be subject to local taxation, if the company is managed and controlled in that country, even though the company itself is registered abroad, in the case of many high-tax countries.
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