Directors, Shareholders and Nominee Services

The majority of jurisdictions require that the companies will be managed by at least one Director and that they will be owned by at least one Shareholder.

Some jurisdictions make it possible that the statutory representative (director) can be a natural person or legal entity, whether the domicile of such a person or entity is in the country in question or not.

Shareholder may also be, depending on the type of jurisdiction where the company is formed, a natural person or a legal entity.

The nominee director and shareholder service is used to ensure the highest degree of privacy and confidentiality.

The offshore locations in Caribbean Islands, Central America and in the Pacific region have special laws which place emphasis on the keeping of anonymity and confidentiality. Even though the lists of directors and shareholders must be available at the registered office of the registration agent in a majority of jurisdictions, these data are not available to third parties, to the public and often they are not available to governments of foreign countries either (and thus to tax inspection authorities). Any disclosure of these data concerning the owners of the company to third parties is generally subject to significant financial penalties as well as to imprisonment for several years without suspension.

There are also locations which are advantaged from the tax point of view, under certain circumstances, but their companies registers are publicly available, and founders, directors or shareholders cannot stay in anonymity. In these cases (and also in other cases) it is possible to use services known as Nominee Services. For an annual lump-sum amount our company will provide you with the appropriate number of directors and shareholders who will be involved in the establishment of the company, although the real founder and user are only you or your company.

The essence of a nominee service is that it is the names of the nominee directors and/or shareholders that are indicated in the corporate documentation, according to their designation. Thus the names of the company's beneficial owners are not disclosed to the Companies Registry, and clients receive the highest level of confidentiality.

At the same time the appointed nominees are not actually entitled to manage the company. They can provide the beneficial owner with a Power of Attorney empowering him to run the business, manage the company's activities and open and operate the company's bank accounts.

At first sight it could seem that it is not necessary to make use of Nominee Services for locations which offer maximum anonymity and confidentiality and where there is no threat of disclosure of confidential information about the founders or users of the companies because the companies register is not open to the public.

There are, however, a number of circumstances which require that somebody can act on behalf of the company. This may concern the signing of contracts, invoices, consignment notes, orders, issuance of Power of Attorneys, decrees and regulations, or a wide range of other circumstances to which it is not just the optimum thing to add your name and signature on the documents of the company which is used by you for tax planning purposes.

The statutory representative appointed formally this way acts on behalf of the company only in accordance with the client's (beneficiary's) instructions, or in accordance with instructions issued by the persons who were authorised to do so by the client at our company.

A formally appointed statutory representative within the framework of Nominee Services has no access to bank accounts and no any signing right to bank accounts of the offshore company either, and cannot handle the assets of the company.

When you set up your offshore company you may name a Director of your choice or you may wish to appoint a professional "nominee" or "third party" Director. The "nominee" or "third party" Director is usually a company specifically set up by us for this purpose, while you still maintain control of the company.

The entire contractual relation for the providing of the Nominee Services is legally treated through a contract concluded by and between our company, director (shareholder) and client, including the letter of resignation from the posts, pre-signed by the director (this contract is known as Deed of Trust).

Under the law of some countries information on directors and/or shareholders must be registered in the public files of the Companies Registry. Therefore only by using nominee directors and/or shareholders can the client's anonymity and confidentiality be ensured.

Third party directors with residential status in a fiscally neutral country are used so that the offshore company cannot be considered resident for tax purposes and liable to tax at local rates on world-wide income in countries with on-shore legislation.

Also it should be noted that anonymity and confidentiality could be compromised if the client signs business documents as the director.

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30/09/2006
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