Not all founders of offshore companies are created equal. Some want to act as directors themselves, whilst some do not.
Sometimes, for commercial or confidentiality reasons, this role is better delegated to others. This might be due to the local laws of the country of incorporation, local bank or regulatory compliance requirements, lack of time… or just a reluctance to take on a managerial position.
In such a situation, it’s better to use the services of an experienced manager whose rights will be limited by contract – and of course, who can be fired by the shareholders at any time if the contract is not working out as desired.
Professional director services are sometimes seen as an alternative to ‘nominee director’ services. However, a Professional Director does so much more – helping with banking, business and bringing an additional cache and reputation to the board. A Professional Director is more like a Trustee, but for active businesses rather than for managing assets.
The directors with whom International Wealth (part of the Offshore Pro Group) works are both legal entities and natural persons who have a well-deserved reputation and extensive experience in managing international companies. This solution cannot be called a nominee service.
Please feel free to email and call us, or leave your contacts, if your offshore or other foreign business needs an experienced independent director. Our email is email@example.com.
Who Can Manage an International Company If Not the Founder?
There are four ways to manage an offshore and/or an international company:
- The Manager, aka the Founder of the Corporation. In this case, the beneficial owner is appointed as a director and personally manages their business operations. This way is a low-cost one in terms of service charges, since the business owner personally manages day-to-day matters, including banking operations, board meetings, and so on. However, there is a disadvantage of this solution: the hours worked, presence at the place of company’s registration and insufficient level of knowledge of the managerial staff.
- A Professional Company Director who is an independent person managing the foreign company. In this case, the best decision will be to trust the experienced experts of our portal who will help you conclude an agreement with proven specialists. Why is it so important?
- A corporate director is not a single person, but a number of experienced staff resources each of whom are specialized in their field (document management, contracts, tax planning, customs issues, etc.).
- A legal entity takes on complex tasks and is distinguished by competence and diligence.
- Should the customer request so, the corporate director will provide an impeccable legal address and will assume only those obligations that have been agreed upon and confirmed in writing by all parties to the agreement
- The termination of the director may take place at any time, which is a kind of insurance for the founder. A resignation letter can be signed in advance and has no date on it.
Most importantly, it is extremely difficult to find a professional director, and every solid firm values its honest name and reputation. Their services might seem expensive – but, indeed, it is worth it.
3. The Company’s Board of Directors. Decisions are made collectively with the participation of the owner and the shareholders.
4. A Nominee Director who is a natural person. This option used to be very popular with the offshore companies earlier. Thanks to it, it was possible to hide the name of the real beneficial owner of the business, as well as to control the company remotely. In today’s realities, this solution continues to be used in onshore countries where registers of beneficial owners have been made publicly available, but this option is gradually losing its popularity for obvious reasons.
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First of all, a nominee director does not always manage your company only – but can simultaneously handle the businesses of hundreds of clients, which will have a negative impact on the quality of their work and may lead to even worse consequences if at least one of the parties is hit by reputational issues or negative press.
Secondly, the nominee who is a natural person, may fall ill, pursue their vested interest, or simply die – leaving you with a problem.
Please make sure you pay attention to the bank and country where you plan to open an account for your foreign company. In the case of running a high-risk business, the most affordable option is payment systems.
What is the Difference between a Nominee and a Professional Director?
This matter is not understood by everyone deeply enough and often a nominee director is associated with a professional company director. Objectively, they look similar. However, they are completely different.
Who is a Nominee?
A nominee director is an official who exists on paper and is listed in the registration documents. In fact, such a director is appointed for a short period of time or continues to be on the company’s staff solely “on paper”. In reality, he has nothing to do with the company’s business and simply follows the orders of the ultimate beneficial owner.
Nominee service is an institution known in offshore jurisdictions and is nowadays a regulated profession in most reputable jurisdictions. The difference between a nominee and a professional director is in their actions: The nominee does not actually perform any of the official duties.
Who is an International Company Director?
A professional director is a natural or legal person who, not being a shareholder, has no personal interest in the profits or losses of the business entrusted to their management. As practice shows, the most reliable option is a corporate director of an international company, as mentioned above.
The reasons for appointing a third party to this position may be varied, as follows:
- The requirements of the local law of the foreign company’s country of incorporation where the presence of a resident at the executive level is an obligatory rule (e.g., Singapore);
- The founders’ wish to keep their names private, at least in the register of companies;
- Lack of time for being permanently present at the place of incorporation, managing the business operations;
- Banking issues when only local residents are allowed to open a business account, or because it facilitates communication with the bank.
The scope of such a director is determined by the shareholders. It may include a narrow or broader range of duties. These services are provided solely within the limits prescribed by the contract – with a balance between the formal and actual presence of the person. As in the case with a nominee, a contract is made with the professional director that, if well drafted, will be fair and protect the interests of both parties.
Services of the International Company Director
In 2021, professional director services are very much in demand among founders of foreign companies. Why? Simply taking into account international corporate requirements and the national legislation of each individual country. International Wealth strictly follows the existing regulations and offers support only from proven, established and reputable professionals for whom company management is a core business.
If you have an existing business in another jurisdiction or only plan to register a foreign company, including offshore, you will be well advised to appoint a local managing director to ensure a high level of oversight. Depending on the business area and the specific situation, a trustee may assume certain responsibilities that are discussed with each client individually.
Here is the list of general services of a professional director in offshore, onshore, midshore jurisdictions from the International Wealth portal:
Professional management services in any of the declared fields such as real estate, e-commerce, consulting, securities and investments, trade, and others.
Development of the corporate governance and company policies based on international practices and experience (AML policies, HR policies, security policies, compliance policies etc)
Assistance in drafting and adjusting your business plan and company structure, including licensing and regulatory consulting if necessary.
Providing services at a business address where the company has real substance – physical office, utility connections, tax number etc.
Bank account management within set limits, i.e. reconciliations, transactions, routine payments of operating expenses, settling credit card bills etc. This is often a necessity, as day-to-day operations and management from outside the place of incorporation can jeopardize the tax residency of the company.
Holding and appointing meetings of directors, including the initial meeting.
Consideration of contracts with their subsequent execution.
Book-keeping and maintaining financial records.
Family Office concierge services such as managing assets, booking travel, acting as a trusted personal assistant etc.
If you have any questions, we are available to answer them during business hours. You can find our contact information at the top of the page. Please feel free to write us an email asking about Professional Director Services.