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Hong Kong Nominee

Updated on May 2017

Selecting a provider of nominee services is a difficult task. How to secure the choice of a right person to protect your privacy and business confidentiality?

Capacities

  1. The nominee director should present your interests. Therefore, he should have been personally exposed to your business model, understand your activities and be able to talk about it or to answer related questions
  2. The nominee should demonstrate professional capabilities to manage what he will protect against unwanted curiosity
  3. The nominee should be familiar with laws and regulations to insure the adherence from the ultimate beneficial owner to the legal requirements of a specific activity

Plausibility

  1. Directors and shareholders' addresses are often public. The nominee should live in a location which reflect his supposed directorship or ownership. Living in 40m2 in the suburbs while being the director of an important company will draw the attention from everybody looking at the incorporation documents
  2. The same concept applies to the professional career of the nominee. A secretary couldn’t pretend to manage an important company and often the nominee has a public profile. Being a nominee isn't, at least for most of the providers of such services, the main occupation. A simple google search could damage such structure
  3. Business location and nominee location should if possible be the same, a nominee director in Panama will find difficult to manage a company in Hong Kong, vice-versa. Traditionally a nominee director has bank signatory powers, full or limited, and few banks are refusing structures when the nominee don’t benefit such powers which remains only in the ultimate beneficiary owner hands

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Trust

  1. Basically a director should comply with the laws and regulations and make sure that the tax position of the company is clear. The nominee has a personal liability.

Stress Resistance

  1. Nominee services are similar to security services, threats should be identified and well understood, you can’t protect someone against unknown risks
  2. If a security guard protects the entrance of your home you want him to stand firm and cautious, not to leave the premises in front of danger or tensions
  3. The nominee director should be trained and able to answer correctly to an investigator or a journalist, preserving the ultimate beneficial owner as long as he can legally do so

The world is changing fast. Tax pressure and transparency being erected is a new norm. Using nominee services require to accept the existence of such changes and to adapt.

A nominee director not requesting information about the UBO, the activities and origin of funds is de-facto someone who will be proved useless when questions arise. At the same time, nominee services are reserved to economical elite. The costs and dangers of such are increasing.

 

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