Offshore Formation – Why Get a Nominee Director?
Some company owners are keen to keep their personal details confidential when diversifying to offshore formation. So why get a nominee director? The facility to assign a nominee director will permit them to remain in full control of their business, whilst enjoying privacy. If you are that businessman or woman, you will still have responsibility for the everyday operation of your company and the financial information, including bank accounts. You will have the power of attorney, not the nominee director. This person must sign a letter of resignation which is undated, and which you can offer to your company board if you wish to terminate their position.
In effect, nominee directors of offshore companies are merely your representative, and do not exercise any authority within the business. Company documentation will have their name printed on it, but that is all. Nominee directors are often called straw or front men. You must obviously choose a person to be a nominee director who you can trust. As their name may be on your company paperwork for years, their reputation can either reflect well or badly on your company.
If you operate a recognisable company at home for dealing with one particular service or product, branching out to something different offshore may make you keen to appoint a nominee director. Customers may have fixed ideas about your usual business, and this move can help to prevent this. For instance, a cosmetics business owner may want to diversify into a sports goods company. As these two commercial enterprises are completely different, your customers may be confused and question what you know about sporting goods when you are well known in the cosmetics industry. Using a nominee director can give you the anonymity against these comparisons and provide your business with a clean start and better chance of success.
If you think it would be helpful to have a resident of the country where you perform offshore formation as a nominee director, this can be done. There are people who will allow you to make use of their name. This will provide you with the benefit of local knowledge and potential trade, and can encourage the local residents to do business with your offshore company. Your nominee director will need to identify himself if requested, so it is vital to form a good relationship with this person before they sign on as a nominee director of your company.