Will the company be private if nominee directors not 'originally' used?

[mnschwarz]

Hi guys,

I have a couple offshore companies of which I am the director and shareholder. I haven't worried about my name being on documents too much as I am a resident of Panama and don't pay tax offshore anyway. My partner now is wanting to relocate back to Germany and doing so I will get caught in the CFC (Controlled Foreign Corporation) laws causing those companies to pay tax in Germany. I'm trying to avoid this and one suggestion was with the use of nominee directors and shareholders. My question is, if I change my existing companies directors and shareholders to nominees, will it be obvious I am still the ultimate beneficiary as my name remains on the original incorporation documentation (and I would have POA)? Would I have to incorporate with nominees from the beginning to achieve my goal?

As a side question, is the use of nominee directors and shareholders a legal way to avoid CFC tax or just a way to hide? Thanks.

 

[negon]

You need to change the directors and shareholders to nominees. As long as no one is asking for the incorporation documents or your friend does not show it to any authority you should be fine. Evene better would be to kill this company and start a new fresh one.

 

[AlicaFunk]

mnschwarz said:
Would I have to incorporate with nominees from the beginning to achieve my goal?
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I would like to know that too? I have registered my Belize company without nominees does it change anything for me if I live in an EU country?

 

[mnschwarz]

auric said:
You need to change the directors and shareholders to nominees. As long as no one is asking for the incorporation documents or your friend does not show it to any authority you should be fine. Evene better would be to kill this company and start a new fresh one.
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Thanks Auric. And is the use of nominees a legal way to avoid the CFC rules or merely hiding? Also, will I not encounter problems when I need to present the original documents to banks etc? Cheers.

 

[negon]

It is legal to use nominees where it is allowed to appoint them 🙂 However, in your case I would liquidate the company to get rid of it and simply incorporate a new company.

 

[mnschwarz]

auric said:
It is legal to use nominees where it is allowed to appoint them 🙂 However, in your case I would liquidate the company to get rid of it and simply incorporate a new company.
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@auric What about re-domiciling the company? Would that have the same effect as incorporating a new one?

 

[icecold]

mnschwarz said:
What about re-domiciling the company?
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How would that help. If I understand it correct it means you simple move the company to a new jurisdiction?!

 

[mnschwarz]

icecold said:
How would that help. If I understand it correct it means you simple move the company to a new jurisdiction?!
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Yes I simply move the company. But if I move to the new jurisdiction with nominee directors/shareholders I wondered if the new jurisdiction would ever have any knowledge of the original persons and if I would have a new set of incorporation documents without my name?

 

[JohnLocke]

mnschwarz said:
if I would have a new set of incorporation documents without my name?
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Normally you can find the names in the incorporation documents, means the founders name! I don't know how it is with a Panama corp. or if you can ask an agent to remove the names?!

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[suzy]

I would register a new company and forget about the old, get it liquidated to avoid any traceable data to you!! Is there a reason for why you want to keep this company?

 

[mnschwarz]

suzy said:
I would register a new company and forget about the old, get it liquidated to avoid any traceable data to you!! Is there a reason for why you want to keep this company?
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Just to avoid the cost and hassle of transferring all the assets, bank accounts etc.

 

[suzy]

ahh okay I see it can be annoying!

 

[drillbill]

Why do you wanted to appoint nominees in the beginning? sorry for the stupid question..

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[mnschwarz]

P

drillbill said:
Why do you wanted to appoint nominees in the beginning? sorry for the stupid question..
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Privacy. I'm setting myself up legally but I still don't wanna have to go through the BS of defending myself against litigation if I can avoid it. Nominees are one just extra barrier in my defence strategy.

 

[Flycatcher]

mnschwarz said:
Privacy. I'm setting myself up legally but I still don't wanna have to go through the BS of defending myself against litigation if I can avoid it. Nominees are one just extra barrier in my defence strategy.
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But is it really so? Offshore countries, the ones without a public register, have traditionally inefficient legal systems. If someone sues you and they really get as far as to demand your personal information, nominees are not going to help much.

I see nominees being the most useful in more respectable jurisdictions with public company registers, where you personally do not want to appear in there.

 

[drillbill]

I thought nominees would protect you if something goes wrong or is the only purpose to proof management and control of the company?

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[Flycatcher]

@drillbill Nominees will almost certainly not volunteer to be sued or punished by legal systems if anyone sues your company.

I believe the original purpose of nominees was to give the UBO (Ultimate Beneficial Owner) additional privacy. If someone simply requires to get records of company ownership, nominee names can be used there. Offshore companies by default though do not have public registers (always check this out well), so your details would be well hidden anyway.

Maybe, perhaps you want to give the illusion of "transparency" and declare the nominees to be in the top management of your company? Perhaps people would be naive and not even think about a possible real owner. I'm not sure would anything like this ever work, nor would the nominees like if their services would be used like that!

 

[drillbill]

Flycatcher said:
Maybe, perhaps you want to give the illusion of "transparency" and declare the nominees to be in the top management of your company? Perhaps people would be naive and not even think about a possible real owner. I'm not sure would anything like this ever work, nor would the nominees like if their services would be used like that!
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I spoke with my agent and they have been fine with this for the very beginning. So I agreed with my local accountant to help me with my local tax office to draw it all up for them so they accept it. So far so good, no troubles. I don't say it was cheap to get there but it works.

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[Flycatcher]

drillbill said:
I spoke with my agent and they have been fine with this for the very beginning. So I agreed with my local accountant to help me with my local tax office to draw it all up for them so they accept it. So far so good, no troubles. I don't say it was cheap to get there but it works.
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Glad you got it sorted out. I think this is quite common for them, they provide nominees specifically to ensure owner's privacy. They indeed are not cheap!

 

[JohnLocke]

Most often the agent has already opened accounts with various banks using their nominees, so future account openings will be much easier since they are already known to the bank.

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