All You Need to Know About Nominee Director Services in the UAE

The utilization of nominee directors is widely common in the UAE. So what exactly are nominee services, and who is the nominee director? It can be a legal entity or individual working on behalf of your company. This service is commonly used in the UAE, especially for foreign investors who wish to maintain confidentiality or avoid local residency requirements. So if you also fall into this category, then this blog is for you.

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 who takes over certain responsibilities of the company. Typically nominees just formally represent the company. However, they remain liable concerning 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 the Nominee Director?

A nominee director is a physical person or legal entity appointed by the company shareholder as the non-executive director of the company. The nominee director acts only on the instructions of the company’s beneficial owner. Appointing a nominee director is the solution for registering an international offshore company and, in some instances, an onshore company too.

A nominee director is appointed to hold shares on behalf of the company's owner. The shareholder's name appears in the corporate documents and sometimes in the jurisdiction’s business register.

Why Use Nominee Director Services?

The purpose of a nominee director for your UAE company is numerous. Here are some of the uses:

1. Privacy: Protects the identity of the beneficial owner.
2. Confidentiality: Maintains discretion and security.
3. Compliance: Ensures adherence to local regulations.
4. Convenience: Streamlines company management and operations.

When are Nominee Services Used?

Nominee services in the UAE can be used for the following purposes:

• To ensure the anonymity of the ownership for non-governmental bodies and safeguard disclosure of ownership information in case of public inquiry.
• To ensure 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 Director in UAE

Some of the benefits of appointing a nominee director for your UAE company are:

• Anonymity of the Ultimate Beneficial Owner (UBO)
• Flexibility in handling
• Local assistance is easily available
• Easy to open the bank account
• Least documentations
• Can provide Power Of Attorney (POA) to the owner

Responsibilities and Liabilities of a Nominee Director

Some of the responsibilities of a nominee director in the UAE include the following:

• Nominee directors are just a name; they do not have any responsibilities or powers in the company.
• They are responsible only for protecting the beneficial owner.
• They are not responsible for and will not make any decisions whatsoever in connection with the management of an entity.
• The Nominee person will not be identified, nor will they sign any documents or return them 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 to obtain a bank account.
• 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 mainland/offshore/freezone company in the UAE with a nominee director, then we at Business Setup Worldwide can help you with it. Contact us today to get further details.