How to protect your assets with a nominee director?
- Thread starter Hermana
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This has been discussed a few times recently, for example:
https://www.offshorecorptalk.com/threads/nominee-director-protection.33065/
https://www.offshorecorptalk.com/th...g-nominee-director-for-cypriot-company.29917/
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This is the probably the answer to your question.
https://www.offshorecorptalk.com/threads/nominee-director-protection.33065/
https://www.offshorecorptalk.com/th...g-nominee-director-for-cypriot-company.29917/
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This is the probably the answer to your question.
Is there any risk to have a nominee if UBO is the only with access to banking?
I suppose the director could buy stuff and let the company receive the invoices, right?
What if the company is limited liability by shares then, and there are also nominee shareholders?
Would UBO risk anything in that case if he simply will not release access to the bank?
I suppose the director could buy stuff and let the company receive the invoices, right?
What if the company is limited liability by shares then, and there are also nominee shareholders?
Would UBO risk anything in that case if he simply will not release access to the bank?
That kind of defeats the purpose of having a nominee. If you appoint nominees but still have access to the bank account, you then have direct control over the company, which is really blurring the lines of passive UBO/investor and directors. A tax authorities would definitely use that against you.
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This is the probably the answer to your question.
Aside from @Sols reference to the way in which a Nominee is used, which is a very valid point, to answer the initial query, the use of a Nominee Director is generally very low risk, especially where the UBO does retain banking control. In essence anyone supplying a Nominee Director to you will in the vast majority of cases also supply 1. a contract dealing with the service of providing a nominee; 2. undated resignation documentation, enabling you to resign the Nominee at will without their future consent; 3. Issue a Power of Attorney in your favour; 4. Will most often not be a bank signatory. As such the impact that a Nominee can have on you from a risk point of view is very low.
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Thanks for the interesting insight. Does it happen often that the tax authority digs deeper into companies with nominees to check who has access to company accounts? (because access can be shared, too, afaik)
Thanks for the feedback, and the suggestion!
I suppose it's better to add the director to the account before the tax office starts looking into the tax return 🙂
Hopefully it's ok if UBO is owner. I feel taxman can't complain too much about that?
UBO means Ultimate Beneficial Owner, so yes, that's implied. 😉
The risk with nominee structures is if someone takes a hostile view at the setup. I see structures like this go by unquestioned and unnoticed for years. As long as you pay taxes due on the dividends you receive, the risks appear low that the company itself is put into question. But if someone were to start poking around, an argument could be made that the nominee directors are just acting on your instructions and you have effective control over the company. At that point, you either accept their ruling and take them to court (and maybe win?).
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This is the probably the answer to your question.
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