How is the real ownerof an Offshore entity protected from the Nominee Director

[hugger]

I am in the process of setting up an offshore company through Sovereign Group in London using a Nominee Director.


They are opening an offshore banking account BUT the nominee director of the offshore company (supplied by Sovereign Group) will be the sole signatory to the Bank account.


The obvious question is: If the Nominee Director of a company is required to be the signatory to the bank accounts, how is the real owner protected from the Nominee Director just simply taking all the funds in the account??

 

[JohnLocke]

The question is, where is the bank account located? If the bank has no banking secrecy at (i.e. Swiss and Cyprus) all and the nominees are not local's you can forget about it, no protection are granted. Further, where is the offshore company incorporated? How many TIEA's and DTAA's or other information exchange agreements has this offshore jurisdiction signed?

 

[drillbill]

We speak the same as discussed here: Anyone dealt with "The Sovereign Group" regarding purchasing you timeshare? - Timesharetalk ?

 

[drillbill]

I forgot....:attention: The bank will always want to know who the UBO is, proof like passport, utility bill and even a bankers reference letter may be the required document that has to be provided.

 

[hugger]

You have the wrong Sovereign Group. The Sovereign Group (sovereigngroup dot com has been around since 1987 and they are a respectable company


The Sovereign Group has nothing whatsoever to do with the Sovereign Gold Trust which is the Time Share company


However, I still have the same question: If the Nominee Director of a company is required to be the signatory to the bank accounts, how is the real owner protected from the Nominee Director just simply taking all the funds in the account??

 

[hugger]

I forgot....:attention: The bank will always want to know who the UBO is, proof like passport, utility bill and even a bankers reference letter may be the required document that has to be provided.

No. It seems that it is NOT the case at all. The Sovereign Group opens the account at the offshore bank using the Nominee Director as the Account holder. I am assuming that the Principal of The Sovereign Group is the standard Nominee Director. He is obviously well known to the bank because they say that opening the Account is guaranteed.


The Ultimate Beneficiary Owner (UBO) has no input into the account opening at all. All payments out of the account are authorised by the Nominee Director/ Bank Account holder

 

[JohnLocke]

Well, if they are trusted as what you say, then you should not worry about that particular issue! CSP's can't afford to take anyone's money if they want to stay in business.

 

[hugger]

Well, if they are trusted as what you say, then you should not worry about that particular issue! CSP's can't afford to take anyone's money if they want to stay in business.

I agree with what you say BUT the main reason for an offshore Bank account is to have a place to deposit serious major assets for a considerable time for the benefit of my heirs.


So it is difficult to simply "not worry about that particular issue!" (Even Bernie Madoff was seen as a trustworthy trustee for some 40 years).


It seems that either


1). one opens an offshore company with a Nominee Director who has total control over the offshore Bank account (which needs a HUGE amount of trust) or


2). one opens an offshore company and an offshore Bank account with the real owner as a Director (and hope that your domicile country doesn't find you)


I can't see any other alternative. Can anyone see an alternative solution to my dilemma??

 

[schoua]

To my knowledge today all banks always ask for the UBO, therefore I think the service provider can also issue a power of attorney towards you and then you go yourself with the company docs etc. to a bank.


This obviously doesnt mean that they cant still access your account, but if you dont tell them which bank you use, they shouldnt be able to find out.


We did that before for clients or helped clients open acccount with similair structures and it worked with Swiss banks (although some ask their own Board Resolution to be signed).


Jus ta thought

 

[hugger]

To my knowledge today all banks always ask for the UBO,

No. It seems that it is NOT the case at all. I have just received advice that my bank account (in the name of the Offshore company with the Nominee Director as signatory) has just been opened.


As the Ultimate Beneficiary Owner (UBO), I have provided NO information to the bank involved. As far as I understand it, the bank does not know me at all


Again, it seems that either


1). one opens an offshore company with a Nominee Director who has total control over the offshore Bank account (which needs a HUGE amount of trust). Since the bank will only open the bank account with the Nominee Director of the company as the signatory, then one is effectively giving total control over the Offshore bank account to the Nominee Director or


2). one opens an offshore company and an offshore Bank account with the real owner as a Director and the bank signatory (and hope that your domicile country doesn't find you)


If this is the case, then opening an offshore company and an offshore bank account is fraught with HUGE danger.


I still can't see any other alternative. Can anyone see an alternative solution to my dilemma??

 

[JohnLocke]

No. It seems that it is NOT the case at all. I have just received advice that my bank account (in the name of the Offshore company with the Nominee Director as signatory) has just been opened.
As the Ultimate Beneficiary Owner (UBO), I have provided NO information to the bank involved. As far as I understand it, the bank does not know me at all

If that is the case, then it is against the International Anti Money Laundry regulations and Financing of Terrorism including various other International law infringement. Be prepared of huge troubles with the local authorities where the bank is located and if they catch you.


You may read more about the Patriot Act for instant here and what it means: Patriot Act Extension Signed By Obama


and about the IMoLIN = International Money Laundering Information Network, IMOLIN


Be careful with what you doing, if this is all true than you just outed the firm you are using as not playing by the rules and put your self as an client and other client's into a huge risk.

 

[drillbill]

Ouch, I smell troubles :embarassed: For a group that big it is a major no go doing that, putting all their clients to be a target of investigation by several huge law enforcements.:coffe:

 

[hugger]

Ouch, I smell troubles :embarassed: For a group that big it is a major no go doing that, putting all their clients to be a target of investigation by several huge law enforcements.:coffe:

Message to the Moderator / Admin.


Please delete this thread. I will re-open a new thread with more general questions and information but without the Company provider name.


drillbill, can you help expedite this message to the Admin

 

[hugger]

If that is the case, then it is against the International Anti Money Laundry regulations and Financing of Terrorism including various other International law infringement. Be prepared of huge troubles with the local authorities where the bank is located and if they catch you.
You may read more about the Patriot Act for instant here and what it means:


and about the IMoLIN = International Money Laundering Information Network,

First, I am not a US citizen (I am UK expat living elsewhere), so the Patriot Act does not apply to me. (I am , by the way, fully cognisant of the provisions of the Patriot Act)


Second, I am not laundering any funds so the provisions of Imolin are not applicable. I am simply looking to move my assets (and future income flows) to a more tax efficient location

Be careful with what you doing, if this is all true than you just outed the firm you are using as not playing by the rules and put your self as an client and other client's into a huge risk.

I would seriously doubt that the relevant company would be a party to anything even remotely illegal. In fact, given their long trading history and their reputation in the market, I am confident that they are the best in the market. (That's why I have started down the path with them!) However, as stated above, the situation with Mr Madoff has shaken my faith in handing a large portion of my assets to a Trustee company. (I am looking for a Trustee company where, ...somehow?!,... the Nominee Director of the Offshore account does NOT control the bank account.


However, I am also aware that the relevant company would probably prefer to remain a more discrete presence so I again ask the Moderators/ Admin to delete this thread.

 

[dwilson]

Many licensed agents have this requirement for nominee services. However, other services providers simply issue the beneficial owner with a power of attorney and allow the POA holder to open accounts. Perhaps you should suggest another service provider? Admin -what is the policy of CC Logic? Caribbean Offshore Agents appoint nominee directors but we're a bit more relaxed regarding banking restrictions since we indemnify our directors.

 

[hugger]

Many licensed agents have this requirement for nominee services. However, other services providers simply issue the beneficial owner with a power of attorney and allow the POA holder to open accounts. .

That sounds possible. But a POA can be easily revoked by the Nominee Director.


Also, the bank may see that as a change of ownership of the Bank account and ask for me to open a new account in my name (thereby defeating the purpose of the whole exercise)

Perhaps you should suggest another service provider? .

One of the issues that I am sure of, is that the Company that I am using to establish the Offshore Company and the Offshore Bank accounts is one of the best and most respected in the market.


They have been around since 1987, they have physical offices in most relevant jurisdictions and are staffed by Lawyers and accountants. (All these issues have been verified and proven to my satisfaction). They have also been highly recommended to me.


One of the reasons why I used the company that I am using is because they opened accounts with the major banks (HSBC, Barclays, Standard Chartered etc) in recognised low tax countries (Jersey, Guernsey, Isle of Man, Hong Kong, etc).


The only concern I have is this issue of having someone else (the Nominee Director of the Offshore company and signatory to the Bank account) controlling my Bank account which will be holding a substantial portion of my assets.


I still want to continue to establish an offshore entity. Can anyone see an alternative solution to my dilemma??

 

[dwilson]

Do you have a strong management agreement between you, the company and the nominee provider? That would be a decent start to giving you some peace of mind...

 

[JohnLocke]

Well, we like all others in the CSP business must comply to the International laws. Never the less, the banks in Cyprus won't open a bank account if they don't know UBO! Personally I think any nominee is taking a hell of a risk if they don't inform the bank about who the UBO is. We have seen such situations(not in our company) in the past and it ended up to be a nasty situation for all involved, including prison and huge penalties and law suites.

 

[dwilson]

I apologize if I misunderstood the question/ concern. I thought that this was about peace of mind for the UBO regarding the nominee director abusing their position with the company and NOT a case of the nominee director having knowledge of the identity of the UBO (which is an absolute given). The only other suggestion that I have is that the nominee director provide the UBO with an executed (undated) resolution and resignation.


Re: controlling the company bank account.


The director does not have to be on the bank account. The director can authorize the opening of the bank account by way of a resolution, but someone with a POA can be the sole signatory on the account.


I hope that this helps. :w:

 

[hugger]

Do you have a strong management agreement between you, the company and the nominee provider? That would be a decent start to giving you some peace of mind...

It would make no difference. The Nominee Director of the company in his role as sole Company Director has control of the decision making process.


The only way around that is for the shareholders (the Ultimate Beneficiary Owners) to make a resolution to sack the Nominee Director and replace him with themselves... thereby revealing their ownership (and defeating the purpose of the exercise.