First, let us answer the question of who a nominee director is. A Nominee Director is an individual who is an officially enrolled intermediary who functions as a company director.
Many companies use them for a variety of purposes, and it is entirely legal. In some countries and jurisdictions, the company directors’ names are placed on public records. The Nominee Director of a company serves as a proxy for the beneficiary owners. This tells us the importance of availing nominee director services.
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 with power of attorney acts on behalf of the company and can sign documents and contracts and open bank accounts.
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 fulfill 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?
Before investing in Oman, let us 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 regular affairs but merely fills the position at the most basic level. The 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 client's active management significantly reduces its confidentiality level. Furthermore, this may lead to 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, the nominee director becomes a part of the daily business at this stage.
More about this role
Business opportunities in Oman are endless. So, to start a venture, you may need the help of several service providers like secretarial services in Oman, intellectual property services in Oman, etc. One such is nominee director services. Let us look deep into it.
A Company under the owner’s management
As a beneficial company owner, you may appoint a company director. Though this appointment does not directly enter 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 company's owner may appoint any other directors, 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 is provided to the bank, and only the beneficial owner will have the authority over the account. Hence, the nominee has no control over the company's bank accounts.
What more shall you take into consideration?
Before your company registration in Oman, consider all this.
There are two advantages if the company owner acts as a director.
1. The company’s corporate structure remains uncomplicated and straightforward.
2. The company’s maintenance costs are at a minimum.
But there are some disadvantages in doing so, as well.
The owner acting as a director of his offshore company may face local tax consequences in his residence country. A foreign company may be subject to local taxation if it is managed and controlled in that country, even though it is registered abroad, in the case of many high-tax countries.
In case of further information, queries, and assistance for your Omani business, contact us. We would be glad to be of help.
