Buying a company with a nominal owner: are there any risks

Buying a company with a nominal owner: are there any risks

It is advantageous to buy a company with a nominal owner in 2020 if you want to keep the confidentiality of the final beneficiary. The nominal owner manages the company in favor of other persons and does not participate in decision-making. The services of such companies are relevant in offshore areas, as they allow to hide the beneficiary.

Risks and disadvantages of using the nominal service

The purchase of a firm with a nominal owner in 2020 assumes a legal option to ensure anonymity. The nominee may be a natural or legal person who performs fiduciary duties.

The phrase "nominee director" is practically not used; the word "candidate" is used more often to emphasize that the person is the executor. Candidates are registered as directors or shareholders and their actions are limited.

Before starting a business, you should familiarize yourself with the laws describing the rights of such directors. There is a risk that candidates will have a low social level. Often, a candidate may be a debtor, and in the event of lawsuits there is a risk of losing assets.

The main cons of service:

  • There is a risk of working with non-professional nominees;
  • There is a risk of losing money;
  • The nominal service is quite expensive;
  • There may be problems with power of attorney.

If a person is dishonest, the risk of losing assets and accounts increases. The nominee director has the right to withdraw funds through the cash desk of a financial institution. It is important to thoroughly check the candidate.

If a nominee service is used, there is an increased risk of leakage of data about the real owner of the business. Nominal persons may require a higher fee to ensure anonymity. In the case of opening a company with a nominee, there is no risk that all data about the true owners will not reach third parties.

Advantages of nominee service

Often, in the process of opening an offshore, an entrepreneur uses nominal services to keep his anonymity. The use of quality service guarantees the anonymity of the owner. In a classic offshore, all information about owners is with the registrar and is not available for public use.

Sometimes the service is required to ensure business development in other countries. With its help it is possible to optimize taxation. In some jurisdictions, the use of the service is mandatory.

With the help of such a service, it is possible to increase the prestige of the company. For example, if in Great Britain a resident of the country is appointed as a nominee director, it is possible to improve the reputation and respectability of the company. To learn more about the nuances of using the nominal service, please contact our experts at IT-OFFSHORE.

TOP countries where nominal service can be used

There are a number of countries where it is possible to use nominal service when registering companies. One of these jurisdictions is Seychelles - access to the shareholder register is closed and there are no residency requirements. The minimum requirements for company registration in Belize and Panama are that data on shareholders is kept by the registration agent.

Actual use of the service in Cyprus, Hong Kong, Singapore. Access to the register of directors and shareholders is open. In these countries more requirements for opening are required - a secretary is needed for registration, and there are conditions for the residence.

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