Knowledgebase: Cyprus Company Formation
What is a nominee Director?
Posted by Peter Derek - Sales support on 09 October 2009 12:11 PM
A Nominee director is used for companies where the beneficial owner don't want to be registered in the public register of companies in Cyprus and|
mostly used for a Pre Registered Cyprus company to anonymously the company.
Nominee directors and corporations serving as directors (”corporate directors”) can also be misused to conceal the identity of the beneficial owner, and their use renders director information reported to the company’s registry less useful. Nominee directors appear as a director on all company documents and in official registries (if any) but pass on all duties required to be performed by a director to the beneficial owner of the company. In many jurisdictions, the nominee or corporate directors is not required to own the shares in the company in which it serves as a director.
Certain jurisdictions, including most OECD Member countries and OFCs such as Cyprus, Isle of Man, Jersey, Malta and the Netherlands Antilles, do not recognize nominee directors. Consequently, a person who accepts a directorship is subject to all of the requirements and obligations of a director, including fiduciary obligations notwithstanding the fact that he is acting as a nominee. In certain jurisdictions, directors cannot be indemnified by the beneficial owner. Non-recognition of the concept of nominee director has one indirect benefit - those furnishing or acting as professional directors are likely to take greater precautions to ensure that their client, the beneficial owner, does not misuse the corporate vehicle for illicit purposes. In the Netherlands Antilles, which does not recognize the concept of nominee directors, reputable trust companies that are asked to serve as directors will conduct a rigorous background check on their clients and, in the case of bearer share companies, will insist on the immobilization of those shares as a condition to accepting a directorship.
For Cyprus Offshore Companies this is commonly used by many online businesses conducting their business ultimately on the Internet.