Have More Confidentiality With Company Nominee Services
Have you thought about adding any corporate nominee service for your corporate governance? If you’re looking to add another layer of confidentiality, there are multiple facets in this management tool that can help you address those privacy concerns and meet your needs. We’ll examine what this service entails, the benefits a nominee service provides (especially to offshore companies), and the legal nominee options available to you.
The definition of nominee services
Nominee services are a management tool that allows you to protect your identity by keeping your name out of public records. In essence, you appoint someone to a role on your board of directors in paper only to represent your entity on your behalf. As privacy is one of the critical advantages of forming an offshore enterprise, the practice of appointing nominees in hopes of preserving confidentiality is quite common.
What type of nominees can you appoint?
Company nominee services encompass a plethora of officer roles in a corporate structure. In the case of Europe Emirates Group, our nominee services offer our clients the option of appointing a nominee director, secretary, nominee shareholder and manager. While there are these options, the nominee services you most typically see are nominee shareholders and nominee directors. Nominee shareholders can be either a person or a corporation in the United Kingdom, but this could change depending on the jurisdiction you are looking to appoint nominees.
Why use a nominee shareholder or nominee director?
What are the reasons people prefer to opt for a nominee as a way of preserving their confidential details? As we’ve previously mentioned, if you go ahead with your business setup with a nominee, you can ensure you do not have to reveal that you are the real owner of the enterprise should you decline to identify yourself as the owner publicly. Along with protecting confidentiality, a nominee director will not suppose a conflict of interest because they are nominees on paper and are required to act on your behest. However, you as the beneficial owner will still be in charge of day-to-day operations.
Nominee company rules
We should note that there is a significant caveat to this confidentiality when using a nominee in your corporate identity. The right to anonymity only extends to non-governmental institutions. That means you can find yourself a means of protection against competitors, private investigators, or family members. Still, since governments and financial institutions around the world are compounding their efforts to fight tax evasion, you must report your identity and other relevant information to government authorities. Not doing so will be against the law either in the UK or the jurisdiction you do business.
If you are appointing a nominee director, you will prepare a Power of Attorney document that ensures the rights to your corporation will transfer to you as the beneficial owner after the director carries out the required tasks in the nominee director agreement. In the case of a nominee shareholder, the nominee shareholder and beneficial owner will prepare a Declaration of Trust document in which the shareholder relinquishes any right they have to make decisions over the shares and will instead agree to act on the beneficial owner’s behalf. The beneficial owner will receive a Share Transfer document along with the Declaration of Trust to signify they have complete control. As such, they will instruct their nominee shareholder on how they would like them to act.
When you have nominee shareholders, there is always the question of whether there are tax implications. While the shareholder serves as a representative, in the United Kingdom, the person who would receive dividend payments on shares would be the beneficial owners. Beneficial owners are also the ones who would earn any investment income, and as such, be required to pay tax. In the United States, according to the United States Revenue Service (IRS), if a nominee receives nominee interest, they would have to fill out a 1099 form to pass the interest onto the rightful owner to decrease their tax burden. While the term nominee interest is more often associated with accounts that have more than one beneficiary, the crucial component is that the beneficial owner is the person receiving the financial benefits and will be responsible for tax payments. In sum, this means that using a nominee does not offer any benefits for tax purposes as a beneficial owner.
Are you interested in nominee services?
If you’re looking to create an enterprise with a nominee, Europe Emirates Group has a full suite of corporate nominee services. We have a group of fully-vetted UAE residents ready to become a nominee manager, director or shareholder for your local or foreign enterprise. Since you do not have to be a UAE-registered company to register with a nominee, whether it be a person or firm, that is based in the United Arab Emirates; you can have this layer of confidentiality without having to travel to the United Arab Emirates. Are you ready to learn more? Contact our team to get started.
CEO, Europe Emirates Group