In the past couple of years, The Philippines has become the go-to destination for a lot of companies. But if you are setting up an offshore company in the Philippines, there is a mandate that the company should have a stake of 49% under a local guardian. That’s where a nominee director comes into play. Without a nominee director, your company is ineligible to set up an offshore location office in the Philippines. If you are in search of a nominee directorship service in the Philippines, then this article is for you
Who is a Nominee Director?
A nominee director is a person, usually appointed by the shareholder/Investor to express the interests of the Shareholder to the board of directors. The person would generally be from the country in which the offshore company is set up.
Why does a Company Require a Nominee Directorship Service?
A company requires a nominee director because the Philippine Government mandates that there should be a minimum of 3 to 5 resident directors, with each person holding at least one company share. If there is any reason the stakeholders are not willing to present yourself to the public and take part in the proceedings, you can also appoint an executive who can be the face of your organisation. This will make your executive the person who has complete control over your business.
Role of a Nominee Director in the Philippines
A nominee director is mainly responsible for whatever is happening in the business. Here are some of the responsibilities of a Nominee Director in the Philippines
Supervising the company
Just for the fact that he is kind of like a caretaker of the business doesn’t make him immune to anything that happens within the company. The Nominee director is solely responsible for most of the actions done by the company, be it making any changes to the assigned tasks, or making profits or losses. His/her decisions do matter a lot for the company
Setting a vision and objective of the company
As Nominee directors are always present at the offshore location company, the Director has an important task to do, that is to set a vision, a goal for the company. Sometimes, he/she is also required to provide his inputs about future businesses and ventures. Moreover, the nominee director decides about the arrangements, company work ethics, cultures audit factors and much more.
Keeping track of the accounts and taking financial decisions
The trustee appoints a nominee director because they trust the person of not misconducting the finances of the company. The Director's main job is to be answerable to stakeholders about the financial statement of the company, where have the expenditures occurred, what they have done the investment for and much more.
Informing the Shareholder about the company’s proceedings
The Nominee Director is appointed by the Shareholder to duly notify them about the company's operations, company's financial data and many more.
Benefits of hiring a nominee director in the Philippines
Hiring a nominee director has proved to be beneficial for the company and the Shareholder. Here are some benefits of availing a nominee director in the Philippines
- One of the main reasons to appoint a nominee director is confidentiality. Any tax inspector can have your details within minutes, by checking the records of the registrar of the company, as the registry is open to investigation by any government official. Appointing a Nominee director keeps your details safe, as the data provided to the registrar will be the nominee director’s only.
- Another reason why you should appoint a nominee director is to save taxes. The tax laws in the Philippines state that the Director must be a resident of the country to pay taxes in the Philippines. Appointing a nominee director can help the company save taxes by proving the government that the Director resides outside the country.
- The third reason is the ease of banking. Appointing a nominee director saves the shareholder time and money, as the nominee director can establish the company on your behalf and have a bank account set up for you.
- The fourth and final reason is that the nominee director will be loyal to the shareholder/ investor. All we need to do is to sign a legal agreement with them, and that's it. The nominee can be taken off board anytime if he fails to work as per the stakeholder's instructions
Thus, here are some benefits and responsibilities of a nominee director in the Philippines. We at Business Setup Worldwide do provide nominee directorship services to our customers. Our experienced consultants help you in finding the best-suited nominee director for your company, as well as help you with setting up a company in the Philippines, necessary visa requirements, corporate secretarial services and much more. Contact us for more. We are there to help you find the best of your needs.