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UAE NOMINEE DIRECTOR AND SHAREHOLDER
The utilization of offshore entities for the purpose of tax flexibility and confidentiality is a common practice in the UAE. Despite shifting attitudes towards anonymity, nominee director services in UAE remains prevalent.
Nominee services offer a legitimate means of protecting the identity and confidentiality of a business owner. This may be achieved through the appointment of a person or legal entity to serve as a nominee director or shareholder, who acts as the formal representative of the company but is still accountable for their actions.
However, it’s important to note that the terms “nominee shareholder” and “nominee director” are not recognized by law. The appointed nominee will bear responsibility for all obligations and liabilities as a director.
ROLES AND RESPONSIBILITIES OF A NOMINEE DIRECTOR IN UAE
- A nominee director is a person who is appointed to serve as a director of a company on behalf of the true beneficial owner of the company. The nominee’s primary role is to fulfil a legal requirement that a company has a certain number of directors, but they do not play an active role in the management of the company.
- The nominee’s main responsibility is to safeguard the interests of the beneficial owner, which means that they do not make any decisions or take any actions on behalf of the company. They do not sign any documents or make any returns on behalf of the company, and they are not involved in the day-to-day administration of the company.
- The beneficial owner is fully responsible for all financial, legal, and other aspects of the operation of the company. This means that the beneficial owner is responsible for making all decisions, signing all contracts, and applying for bank accounts. The nominee is not held responsible for any of these actions, as they are not involved in the management of the company.
- The nominee also doesn’t have any liabilities, as they are not signing any contract on behalf of the company or signing up to obtain a bank account. Once the nominee resigns, the beneficial owner can take complete charge of the company and act as the director of the company.
- The nominee director’s appointment is usually used for confidentiality and legal compliance purposes and not for the actual management of the company. In most jurisdictions, there are laws and regulations in place to prevent nominee directors from being used for illegal activities such as money laundering or tax evasion.
ADVANTAGES OF HIRING A NOMINEE DIRECTOR IN UAE
Anonymity of the UBO (Ultimate Beneficial Owner)
By using a nominee director, the true beneficial owner of the company can remain anonymous, which can provide a level of privacy and protection for the owner’s personal and financial information.
Flexibility of handling
A nominee director can give the beneficial owner more flexibility when it comes to handling the company’s affairs. The nominee director can be given power of attorney to act on behalf of the beneficial owner, which can make it easier to handle various tasks such as signing documents and opening bank accounts.
Local assistance is easily available
As a nominee director is physically present in UAE, they can provide local assistance to the beneficial owner. They can help with compliance and legal requirements, as well as provide access to local networks and resources.
Easy to open the bank account
Using a nominee director can make it easier to open a bank account for the company. As nominee directors are physically present in UAE, they can assist with the necessary documentation and provide local support.
Nominee directors can help to reduce the amount of documentation required for setting up a company in UAE. This can make the process quicker and more efficient.
Nominee Directors are usually individuals with a good reputation and have a good understanding of UAE corporate laws and regulations, which can provide a level of professionalism and credibility to the company.
WHO IS QUALIFIED TO BE A NOMINEE DIRECTOR IN UAE?
Generally, a nominee director in the UAE must meet the following conditions.
- Be a natural person and not a corporate entity.
- Be of legal age and possess the capacity to enter into legally binding agreements.
- Have a good reputation and do not have any criminal record.
- Not be an undischarged bankrupt.
- Not be subject to any legal or regulatory restrictions or disqualifications.
- Have a good understanding of UAE corporate laws and regulations.
- Have a valid Emirates ID and a UAE resident visa.
- Not be a director of more than 20 companies.
WHO IS PROHIBITED FROM BEING A COMPANY DIRECTOR IN UAE?
Generally, the following individuals are prohibited from being a company director in the UAE:
- Individuals who are under the age of 18 are not legally allowed to be company directors in the UAE.
- Individuals who are undischarged bankrupt are prohibited from being company directors in the UAE.
- Individuals who have a criminal record or have been convicted of certain crimes are prohibited from being company director in the UAE.
- Individuals who are subject to legal or regulatory restrictions or disqualifications, such as those imposed by a court or regulatory body, are prohibited from being a company director in the UAE.
- Individuals with a history of non-compliance with UAE laws and regulations, such as failing to file financial statements or pay taxes, may be prohibited from being a company director in the UAE.
- Under the UAE’s Companies Law, a person can not be appointed as a Director in more than 20 companies.
WHAT IS THE MANDATORY DOCUMENTATION FOR THE APPOINTMENT OF A NOMINEE DIRECTOR?
The specific documentation required for the appointment of a local nominee director UAE may vary depending on the relevant government agency or regulatory body that oversees companies and corporate governance in the UAE, as well as the specific free zone where the company is being incorporated.
However, generally, the following documents are typically required for the appointment of a nominee director.
- Nominee director’s passport copy and Emirates ID copy as a proof of identity and UAE residency.
- Nominee director’s CV and/or qualifications.
- Nominee directors notarized and attested power of attorney that authorizes them to act on behalf of the beneficial owner.
- Nominee directors notarized and attested consent letter that confirms their agreement to act as a nominee director.
- A copy of the company’s memorandum of association and articles of association.
- A copy of the company’s trade license.
- Any other documents that may be required by the relevant government agency or regulatory body.
Reach out to us at Relin Consultants to know more about our nominee director service in UAE.
How Can I Appoint A Nominee Director For My Company?
A nominee director can be appointed by following the listed steps:
- Give at least seven days’ notice of the board meeting to all of the company’s directors at the addresses registered with the company. In the event of an urgent matter, a shorter notice may be given.
- Organise a board meeting for the company to discuss the agenda and elect a nominee director. Pass a board resolution after choosing the person who would be appointed as a nominee director.
- Send a letter of appointment outlining the terms and conditions of the appointment as well as the compensation that will be given to the Company’s Nominee Director.
- Allow any Director or the Company Secretary to sign and file the relevant paperwork with the Registrar of Companies, as well as to carry out any other acts, deeds, or things required to implement the Board’s resolution.
- Within 15 days of the conclusion of the board meeting, draft minutes should be prepared and sent through hand delivery, speed post, registered mail, courier, or email to all directors for feedback.
How much is the Nominee Director UAE Fee?
The cost of hiring a nominee director in the United Arab Emirates (UAE) can vary depending on the specific service provider, the type of company, and the specific free zone where the company is being incorporated.
Generally, the nominee director fees in UAE can include an annual retainer fee, which is usually paid on a yearly basis and can range from a few thousand Dirhams to tens of thousands.
For whom UAE nominee director services are necessary?
Nominee directors are typically necessary for individuals or companies that want to establish a presence in the United Arab Emirates (UAE) but do not have a local director. Nominee directors are used to fulfill the legal requirement that a company in the UAE have a certain number of directors and to provide local assistance with compliance and legal requirements.