Forming a company with two directors: yourself and a nominee director?

[shockr]

Let's say I want to form a Belize company, but I'd like to retain some anonymity. Is it a good idea to form with two directors: being yourself and a nominee director? The nominee director would handle signing contracts, be used as the name for domain registration, and such (in order to maintain anonymity), while I can use my capacity as a director to open an offshore bank account for the company. Are there any drawbacks to this approach?

 

[JohnLocke]

That would be one way to sort this out. However, most are using only 1 nominee director.

 

[hugger]

Let's say I want to form a Belize company, but I'd like to retain some anonymity. Is it a good idea to form with two directors: being yourself and a nominee director? The nominee director would handle signing contracts, be used as the name for domain registration, and such (in order to maintain anonymity), while I can use my capacity as a director to open an offshore bank account for the company. Are there any drawbacks to this approach?

You may want to read this story about a Nominee Director that has stolen $34 million from one of his Australian clients and absconded with the money.


http://news.ninemsn.com.au/national/2013/04/15/06/22/paul-hogan-chasing-$34m-stolen-by-tax-adviser


Paul Hogan is trying to chase down $US34 million ($A32.37 million) his once-trusted tax adviser has allegedly stolen.


Philip Egglishaw, who reportedly helped the Crocodile Dundee star hide his earnings in offshore tax havens, is now an international fugitive.


Swiss newspaper Le Matin Dimanche reports that Hogan's millions have "been lying for almost 20 years in account number 379865 at the Corner Bank in Lausanne'' run by a firm based in Geneva called Strachans, where Egglishaw worked.


But now Hogan is unable to draw any money from it.


Mr Egglishaw is alleged to have ''absconded with or spent all'' of Hogan's millions, according to documents filed in the Californian District Court by Hogan's US representative, Fairfax Media reports.


The account, known as the Carthage Trust, was set up by Mr Egglishaw in 2005 allegedly to enable Hogan to funnel revenue from his Crocodile Dundee franchise into offshore accounts so he could avoid paying tax.


Hogan denies that claim.


Last year Hogan and his US advisers became increasingly concerned after Mr Egglishaw refused to provide any bank statements relating to the millions in the Carthage Trust, Fairfax Media reports.


Hogan's US representative, Schuyler Moore, sent an email to Mr Egglishaw's lawyer in Geneva last October saying: ''The actions of Egglishaw have now crossed the boundary of legality, and he is now engaging in criminal fraud, theft, and breach of fiduciary duty, and you are now directly aiding and abetting his criminal actions.


''The Carthage Trust's beneficiary [Hogan] is not going to stand idly by in the face of this theft, and he is going to take every step possible in every country possible to hold Egglishaw, Strachans, you, and your firm liable and brought to account.''


Mr Egglishaw's partner at Strachans, Philip De Figueiredo, is the only other signatory to the Carthage account.


But he is currently in jail in Australia, serving two-and-a-half years after pleading guilty in a Queensland court last month to conspiring to defraud the Australian government.


His guilty plea related to aiding clients to avoid paying more than $4 million in tax.


There is currently an international arrest warrant out for Mr Egglishaw, who is believed to be in Switzerland.


Hogan was once a major target of Operation Wickenby, a joint investigation by the Australian Crime Commission and the Tax Office, but after years of legal battles he settled with the Tax Office on confidential terms.

 

[JohnLocke]

It is like with everything else you can find good and bad about any service any tool and any entity even any offshore jurisdiction and nominee. Everytime someone is asking for nominees you come up with the bad stories hugger. That's cool but not objective.

 

[Zqq]

Let's say I want to form a Belize company, but I'd like to retain some anonymity. Is it a good idea to form with two directors: being yourself and a nominee director? The nominee director would handle signing contracts, be used as the name for domain registration, and such (in order to maintain anonymity), while I can use my capacity as a director to open an offshore bank account for the company. Are there any drawbacks to this approach?

What's the point? Any inquiries into your company will reveal your identity anyway.


When you sign a contract with a company, it is common to disclose the identities of all directors. Even if your nominee is the one signing the agreement, the contracting party is likely to ask for your details as well.

 

[JohnLocke]

What's the point? Any inquiries into your company will reveal your identity anyway.

Is that so in Belize? Who will be releasing this information

 

[Zqq]

Is that so in Belize? Who will be releasing this information

The relevant authority if there is a TIEA and/or a court order.


Edit: Or any contracting partner if the partner has due diligence on all director and they are subpoenad.

 

[JohnLocke]

Sure thing... but in most cases where we speak simple contracting there will be no issues as all do hide your identity and I assume we are on the same page when I say that it makes things much more complicated and more expensive when a single nominee director is appointed together with a share holder compared to the alternative, where beneficial owners takes both roles.

 

[Zqq]

I assume we are on the same page when I say that it makes things much more complicated and more expensive when a single nominee director is appointed together with a share holder compared to the alternative, where beneficial owners takes both roles.

Agreed.


However, I still do not understand why OP would want to have both nominee directors and appoint himself as director. This only makes sense in jurisdictions like Panama or Singapore where multiple directors are required.


If all he wants the director role for is to open a bank account, it makes far more sense to use a POA and some form of letter of authorization instead.

 

[JohnLocke]

If all he wants the director role for is to open a bank account, it makes far more sense to use a POA and some form of letter of authorization instead.

Second that..

 

[taxraider]

Nominee director can be good to appoint in jurisdictions where privacy is not granted and shareholders and directors are listed public. For instant in Cyprus you can avoid to be listed as beneficial owner, director and shareholder when appointing nominees!


Nominees can also be used to control and manage the company in a certain offshore jurisdiction for in that way to make use of a DTA if in place!

 

[shockr]

What's the point? Any inquiries into your company will reveal your identity anyway.
When you sign a contract with a company, it is common to disclose the identities of all directors. Even if your nominee is the one signing the agreement, the contracting party is likely to ask for your details as well.

I'm not very experienced with offshore companies, but I think it's all about control when it comes to opening the bank account really. Plus I read there could be a few complications if you had a nominee director when opening a bank account. I'm not looking for full anonymity. Just enough anonymity to not be in the public eye.

 

[JohnLocke]

Well, if that is the reason, a simple Seychelles IBC will do the work.. no public registry and you don't need a nominee director.