The utilization of offshore companies is widespread in the UAE due to the advantage of tax flexibility and anonymity. And even though the knowledge of anonymity happens to be a changing value, the usage of nominee services remains relatively unchanged and still very popular. But, when you want to start an offshore company in the UAE, the businessman are often asked by clients to provide their newly registered offshore company with nominee directors or shareholders services. So what exactly are Nominee Services?
What are Nominee Director Services?
A nominee service is a legal method of protecting the identification and anonymity of the company owner. The nominee director or shareholder could be an actual person or a legal entity working out fiduciary responsibilities over the company. Typically nominees just formally represent the company, however, remain liable with respect of any functions or omissions. It is important to remember, that the law does not recognize the concept of “nominee director” or “nominee shareholder”. As such, if a person or company is appointed as a director, all the duties and liabilities will be imposed on the nominee officer.
Who is a Nominee Director?
A Nominee Director is the term referred to the physical person or a legal entity who is appointed by the company shareholder as the non-executive director of the company and who acts only on the instructions of the company’s beneficial owner. Appointing a nominee director is the solution used within registration of the international offshore company, and, in some instances, for onshore company in the United Arab Emirates. A nominee director is basically appointed in order to detain shares on behalf of the owner of the company. The name of the shareholder will appear in the corporate documents, and sometimes in the jurisdiction’s business register. Here the term jurisdiction mostly refers to an offshore company in Dubai, UAE.
When are Nominee Services Used?
Nominee services in Dubai can be used for the following purpose;
- To ensure the anonymity of the ownership for non-governmental bodies and safeguard disclosure of ownership information in case of public inquiry.
- To ensure the anonymity for making business deals and signing agreements.
- When the personal presence of the company director is required to conduct business in another country and the beneficial owner does not have an opportunity to travel.
- In order to prevent lawful restrictions on deals between affiliate bodies. This option is useful for the transfer of assets within a holding company.
- When it is necessary to extend the statutory bodies by the right amount of members
Benefits of a Nominee Shareholder in Dubai
- Anonymity of the UBO
- Flexibility of handling
- Local assistance is easily available
- Easy to open the bank account
- Least documentations
- Can provide POA to owner
Responsibilities and Liabilities of a Nominee Director
- Nominee directors are just a name only, they do not have any responsibilities as well as powers in the company
- They are responsible only to protect the beneficial owner
- They are not responsible for and will not make any decisions whatsoever in connection with the management of an entity
- Nominee person will not be identified and or sign any documents and or return on behalf of the entity
- The beneficial owner is fully responsible financially, legally, and in all other respects for the operation of the entity
- The nominee will not have any liabilities as such as he will neither be signing any contract on behalf of the company nor signing up for obtaining a Bank Accounts
- Once the Nominee resigns, the owner of the company can take complete charge of the company.
In short we can say that even if a company hires a nominee director, he/she is not entitled to manage it at their own discretion, and the actual control is entirely vested in its beneficial owner. If you need to register your onshore/offshore company in the UAE with a nominee director, then, we at Business Setup Worldwide can help you with it. Contact us today.