The concept of using Nominee Directors for offshore companies is as old as the offshore finance industry itself. In recent years, however, we have seen increasing demand for Professional Directors and we therefore started to offer this service to Offshore Pro Group clients.
THE DIFFERENCE BETWEEN NOMINEE DIRECTORS AND PROFESSIONAL DIRECTORS
Traditional nominee directors serve one purpose: privacy. Typically, lawyers and incorporation agents use low-level employees such as receptionists or delivery boys and appoint them as directors of clients’ companies. These nominees know nothing whatsoever about the business – but would issue a General Power of Attorney to the ultimate beneficial owner. The client iss therefore able to manage all day-to-day business and bank accounts without his name appearing in the company registers.
We are happy to provide a traditional nominee director service to clients who require it. However we generally prefer to appoint a legal entity as nominee director, that is in turn controlled by a regulated trust company. In our opinion, this set-up is more professional, since it achieves the goal of removing clients’ names from company registers, without relying on low-level employees. Nonetheless, our philosophy is that “the client is always right” so if the client requests nominee directors, whether personal or corporate, we provide this service in our usual professional manner.
THE ADVANTAGES OF PROFESSIONAL DIRECTORS
Professional Directors, however, are used where one or more real credible board members are required. Rather than low-level employees, Professional Directors are educated people with ample business experience, who are prepared to act as ambassadors for the company and can grow into the role of business consultants. Using Professional Directors can enhance a company’s credibility immensely, and having Professional Directors demonstrates true management and control offshore.
Unlike nominees who basically sign documents without question, Professional Directors understand legal compliance and personal responsibility. They understand their fiduciary obligations to the shareholders of the company. Although they will take advice from the shareholders, they will not follow instructions blindly. They will carefully analyze all decisions and record their deliberations in writing via minutes. Professional Directors are also generally responsible for company secretarial tasks such as keeping minutes of board meetings.
In response to modern anti-avoidance laws in major jurisdictions, retaining Professional Directors and the maintenance of detailed minutes of board meetings can be the key to demonstrating clearly that the ‘brains’ and central management of the company really are located in the tax-free jurisdiction.
OUR PANEL OF PROFESSIONAL DIRECTORS
At Offshore Pro Group we maintain a panel of Professional Directors from around the world who are prepared to serve on the boards of companies, both onshore and offshore. Here are some examples of typical profiles:
- Canadian citizen, 40 years old, resident in Europe, university degree and proven business experience, former honorary consul.
- Canadian citizen, 60 years old, resident in Latin America, speaks fluent English, Spanish and Portuguese, 30-year track record in IT sector
- British citizen, 60+ years old, resident in Asia, retired from a lifetime career in banking, membership of many professional associations, board member of two public companies listed on London Stock Exchange
Professional Directors are usually available for travel and are always available to talk on the phone and confirm their role in the company.
We will always try to understand the client’s business and match one or more directors to the clients’ requirements. For example, if you are setting up a new IT business we would recommend a director with experience in the IT sector, etc.
Professional Directors typically have excellent relationships with banks, and of course our panel can draw on the banking expertise and connections of the entire Offshore Pro Group. They also have plenty of experience in dealing with banks, raising finance etc.
An affordable basic annual retainer fee is payable, starting at around EUR 2000. Beyond this, work carried out (signing documents, visiting notary etc) is billed at an agreed hourly rate, along with expenses. Additional responsibility fees are payable for positions that could be considered high risk or that require additional participation, such as financial services businesses.
Our Professional Director services are tailored to your needs and always backed up by the guarantee and reputation of Offshore Pro Group. Please contact us today to discuss your requirements further.