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What is a Nominee Shareholder?

One of the main reasons that provoke the business investors to proceed ahead with the incorporation of a business entity in the offshore jurisdiction is the high-end confidentiality and privacy that the location provides.

One of the easiest ways of proceeding ahead is the involvement of a nominee shareholder. This involvement also includes the participation of a complete nominee framework that needs to be arranged accordingly.

This treatise focuses on providing the complete information that one needs to deal with while setting up an offshore company and dealing with the nominee shareholder.

Here’s a guide on Why Setup an Offshore Company, which will help you to understand the core context of establishing one.

Who is a Nominee Shareholder?

In legal terms, a nominee shareholder can be defined as an unrelated third party that gets officially registered as a lawful holder of shares in an offshore business entity.

One of the core purposes of appointing a nominee shareholder is to maintain the secrecy of the original shareholders of the company, as they act as a shield to protect the confidential information.

Upon appointing a nominee shareholder, a specified document such as a declaration of trust or a deed of transfer or even a nominee service agreement gets issued that is signed by the nominee director as well as the company’s beneficial owner.

Note: A nominee shareholder can be a person or even a legal business entity, and must make a nominee declaration.

Tax-haven jurisdictions are well-known to protect the confidentiality of the company owners, and thus, incorporating a business entity with the involvement of a nominee shareholder turns out to be a profitable move.

[Read more on: What is a Tax-Haven Jurisdiction?]

Documents Issued After Appointing a Nominee Shareholder

Once a nominee shareholder gets appointed, the following documents get issued accordingly:

  • A declaration by the beneficial owner
  • Declaration of trust
  • Indemnity letter to the nominees
  • Relevant terms and conditions
  • Transfer of shares

How Does A Nominee Shareholder Work?

Before proceeding ahead with the appointment process, it will turn out to be beneficial for you if you can get a clear understanding of the working mechanism of a nominee shareholder. It can be explained as under:

  • The nominee shareholder allows you to lend his name to you to use it on behalf of the registered owners of the company.
  • Once appointed, the nominee shareholder will be projected as the owner of the company shareholders in front of the world.
  • They hold the correct benefits of selling the shares and receive the company dividends, and even vote in the general meetings.
  • Also, a nominee shareholder has the flexibility to perform as a nominee director.

Any business entity needs to set up a proper nominee structure that must be carried out with the appropriate guidance of the business investors.

Dealing with business experts helps a business entity to proceed with error-free steps and, thus, ultimately smoothens the process.

To know more about the benefits read, Reasons to Hire an Offshore Business Consultant.

Business Setup Worldwide is one of the top business consultants in the UAE, which has been helping the business consultants to incorporate their business entity at ease across multiple locations at a global level.

Our business investors are well-versed with the incorporation process and can help you to establish your offshore company by guiding you at every step. Proceeding ahead with a business expert turns out to be a smart move as experts are well-versed with the incorporation procedure.

If you are looking forward to appointing nominee directors for your business entity, feel free to have a word with our business experts.

Contact us today-we’d be glad to assist!