Questions about nominal service

Nominee services

Since the concept of nominee service is, in principle, not typical for domestic law, many questions arise regarding it when registering a company in an offshore zone, where this is an established practice. The nominal director and shareholder are only listed as such in the official documents of the company, but in fact the owner and manager of the company is its real owner (the beneficiary «beneficiary» - the very concept in our legislation appeared for the first time only in the new TCU). By virtue of the agreement (indemnity letter) signed between him and the nominee director, the latter is released from any claims against him and is not responsible for the company's debts. It is also issued in his name and a refusal letter – an undated voluntary resignation letter that allows the business owner to resign at any moment if he signs any major contract that threatens the company.

Nominee Services

It is important that a nominee director can be either a resident of the country of registration or not. The nominal shareholder is the formal owner of the shares registered in his name, but in favor of the beneficiary, and a trust agreement is signed between them (an agreement on trust).

As for the nominee shareholder, according to the Declaration of trust (trust agreement), he confirms in this document that he is only a shareholder in favor of the beneficiary and has no right to take any action with them. This question always worries the actual owner to a special extent, so it is worthwhile to dwell on the fact that a register of shareholders or a share certificate is sufficient proof of the rights to shares. Even if the register is maintained and kept by the registered agent, as is the case in most cases, one copy or extract may be provided to the owner. But in any case, you can always confirm your rights to shares with a certificate.

Nominee director services

Recently, in connection with increased control over the "transparency" FEA and a decrease in the general level of confidentiality, the practice of issuing bearer shares began to decrease. Indeed, in this case, only a share certificate acts as a confirmation of rights, and it is almost impossible to protect yourself from falling into the hands of an outsider. The legality of the acquisition of shares is not verified. However, often the legislation of the offshore jurisdiction in which the company is registered requires the storage of bearer share certificates with an authorized depository, and then you can confirm the rights to them using the extract or certificate provided to them. Thus, you can protect yourself from possible troubles.

Do not forget about the image of the company - to give it a "foreign look"; by assigning denominations to citizens of another country, especially British subjects, it will definitely not be superfluous.

When is it necessary to do without a nominal service?

• You want to protect the privacy of – in most full-tax / offshore countries (Austria, Great Britain, Hong Kong, etc.), as in Ukraine, the state register contains and provides by law information about shareholders, directors, secretaries of the company.
• Residency requirements for a director or secretary are subject to local law (China, Panama, Singapore). In addition, it may be necessary for the purpose of tax optimization - after all, when a company is recognized as a tax resident of the country of registration, it will be possible to apply double taxation avoidance agreements, as well as special ones, incl. and zero, tax rates.
• It is necessary to prevent access to information about affiliated (related) persons so that several companies of the same group do not have the same directors – often such a need arises when building holding structures and, in general, when conducting international business.
• Thus, with the proper execution of all documents and advice from experienced lawyers, you can prevent the risks that sometimes accompany the use of nominee services in international business.