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

[hugger]

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..

I find this hard to reconcile with my knowledge of the standard banking law (irrespective of where the Bank is located).


Bank accounts can only be opened by the Directors of a company (in this case it is the Nominee Director)


The UBO is, in most cases, the shareholders. I have never known a bank to care who the shareholders of a company are. (Does the Bank that acts for BP or Apple computers ever ask for a list of its shareholders?? I don't think so!!)


As long as the Nominee Director stands up to scrutiny, the bank will open the account.


The whole purpose of an Offshore banking account is for the Nominee Director to shield the privacy of the bank account beneficiaries.

 

[dwilson]

Hi Admin,


All AML Regulations require financial institutions to have knowledge of the Directors, Shareholders and Beneficial Owners. This is the hallmark of the FATF regulations upon which all global anti money laundering legislation complies with. The examples that you listed are all publicly listed companies. Exemptions are given on publicly listed companies since shareholder KYC must be held by the exchange or a licensed intermediary and there would be some recourse in the event of an investigation to determine the identity of the owner of a share at any given time.


Secondly, any third party can operate a bank account on behalf of an entity given the correct approval. In this case, a director's resolution, power of attorney or letters of administration can authorize a non-officer of a company to operate an entity's bank account.


Lastly, the purpose of the management agreement is not to prevent fraud, malfeasance or misappropriation. It allows for recourse from the beneficial owner, which is all you can ask for really! Alternatively, you can ask the nominee director to issue an undated, signed resolution and resignation letter removing them from office. However, the risk will be that you effectively back date a document which is mostly unethical if not illegal. Risk is a part of business and many times, your going to find that solutions don't do exactly what you want. Sometimes you have to go with the 80/20 rule.

 

[hugger]

Thank you dwilson for your response.


However, I am coming to the conclusion that there is no satisfactory solution to my problem.


As I have said above, it seems that if you want to establish an Offshore Company and an Offshore Bank account, then you have only two choices: 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. And after the Bernie Madoff 40 year long scam as a respected trustee/nominee, who would really trust a sizable slab of their assets to a trustee/nominee?).


Also, 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.


The alternate solution of having a Power of Attorney granted by the Nominee Director, or an undated, signed resolution and resignation letter from the Nominee Director does not fill me with a great deal of confidence!!


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

 

[hugger]

Risk is a part of business and many times, your going to find that solutions don't do exactly what you want.

As a businessman, I agree with what you say.


But when it comes to protecting the bulk of my assets, then the Offshore Company and Offshore Banking route seems too risky and dangerous.

 

[hugger]

How is the real ownerof an Offshore Bank a/c protected from the Nominee Director


I am in the process of setting up an offshore company through a well-respected company (been in operation since 1987 which has been verified) in London using a Nominee Director.


They are opening an offshore banking account BUT the nominee director of the offshore company (supplied by Company provider) 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??


I have also received advice that my bank account (in the name of the Offshore company with the Nominee Director as signatory) has also been opened.


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


Therefore, 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. And after the Bernie Madoff 40 year long scam as a respected trustee/nominee, who would really trust a trustee/nominee?).


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

 

[hugger]

I would like to emphasise that I am not laundering any funds or attempting to avoid tax.. I am simply looking to move my assets (and future income flows) to a more tax efficient location


I would seriously doubt that the relevant company (which is setting up the offshore 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 company does NOT control the bank account).

 

[hugger]

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

I am also aware that the relevant Company Provider would probably prefer to remain a more discreet presence so I again ask the Moderators/ Admin to delete this thread.

 

[hugger]

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??

 

[hugger]

Hi Admin,
All AML Regulations require financial institutions to have knowledge of the Directors, Shareholders and Beneficial Owners. This is the hallmark of the FATF regulations upon which all global anti money laundering legislation complies with. The examples that you listed are all publicly listed companies. Exemptions are given on publicly listed companies since shareholder KYC must be held by the exchange or a licensed intermediary and there would be some recourse in the event of an investigation to determine the identity of the owner of a share at any given time.


Secondly, any third party can operate a bank account on behalf of an entity given the correct approval. In this case, a director's resolution, power of attorney or letters of administration can authorize a non-officer of a company to operate an entity's bank account.


Lastly, the purpose of the management agreement is not to prevent fraud, malfeasance or misappropriation. It allows for recourse from the beneficial owner, which is all you can ask for really! Alternatively, you can ask the nominee director to issue an undated, signed resolution and resignation letter removing them from office. However, the risk will be that you effectively back date a document which is mostly unethical if not illegal. Risk is a part of business and many times, your going to find that solutions don't do exactly what you want. Sometimes you have to go with the 80/20 rule.

Thank you dwilson for your response.


However, I am coming to the conclusion that there is no satisfactory solution to my problem.


As I have said above, it seems that if you want to establish an Offshore Company and an Offshore Bank account, then you have only two choices: 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. And after the Bernie Madoff 40 year long scam as a respected trustee/nominee, who would really trust a sizable slab of their assets to a trustee/nominee?).


Also, 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.


The alternate solution of having a Power of Attorney granted by the Nominee Director, OR an undated, signed resolution and resignation letter from the Nominee Director does not fill me with a great deal of confidence!!


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

 

[JohnLocke]

Secondly, any third party can operate a bank account on behalf of an entity given the correct approval. In this case, a director's resolution, power of attorney or letters of administration can authorize a non-officer of a company to operate an entity's bank account.

Well I don't say that this is not doable. Not at all, and I know many CSP's or so called CSP's do it. I don't dictate your business or tell you how you have to run your business, actually I would never do so..We stick to certain rules in our company which actually not allow the mentioned business practices. In that way we avoid unwanted attention and troubles for us and our clients.

 

[JohnLocke]

I am also aware that the relevant Company Provider would probably prefer to remain a more discreet presence so I again ask the Moderators/ Admin to delete this thread.

Well, you MUST read and Agree to the Forum rules before you register as an user here and before you make a post! So if you have done this, you would have noticed that we don't just delete posts because someone has posted something that he don't want published any longer. If you don't like our forum stop posting here. This is a public forum, which we maintain for service purpose only. Read the forum guidelines again.mg:


Here you may also read about what a forum is: IFJ Firmengründung

 

[nastathin]

Thank you dwilson for your response.
However, I am coming to the conclusion that there is no satisfactory solution to my problem.


As I have said above, it seems that if you want to establish an Offshore Company and an Offshore Bank account, then you have only two choices: 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. And after the Bernie Madoff 40 year long scam as a respected trustee/nominee, who would really trust a sizable slab of their assets to a trustee/nominee?).


Also, 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.


The alternate solution of having a Power of Attorney granted by the Nominee Director, or an undated, signed resolution and resignation letter from the Nominee Director does not fill me with a great deal of confidence!!


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 wonder why no one has suggested the Fund, Foundation and Trust entity's :S -confused:


A professional structured Trust and / or Foundation in one of the strong offshore jurisdictions i.e. Seychelles, Panama, IoM or Mauritius can help you to achieve all this without laying your assets, property or cash in other's hands, you can appoint a local lawyer to act Trustee or Protector.

 

[hugger]

I wonder why no one has suggested the Fund, Foundation and Trust entity's :S -confused:
A professional structured Trust and / or Foundation in one of the strong offshore jurisdictions i.e. Seychelles, Panama, IoM or Mauritius can help you to achieve all this without laying your assets, property or cash in other's hands, you can appoint a local lawyer to act Trustee or Protector.

Can you please elaborate on this? What is the structure of "a professionally structured trust"

, you can appoint a local lawyer to act Trustee or Protector.

Isn't that basically the same issue as having a Nominee Director. Is the Trustee the signatory to the bank accounts??

 

[nastathin]

hmmm, let me try to explain it this way.. I think it should work. Below is the guideline for my Foundation I created in the Seychelles with the help of the forum owners

Subject to Article 12 of the Foundation's Charter and Article 3 of the Regulations, the Founder hereby appoints [(Name) of (Address) a (Nationality) person holding (country) passport number (number)/ or (Company Name) having its registered office at (Address) with registration number (###)] as the Protector of the Foundation.
1. The Protector shall have the following powers and rights –


1.1. to be informed of all meetings of the councillors;


1.2. to table business to be considered at such meetings;


1.3. to attend and be heard, but not vote at such meetings;


1.4. to access the books, records and accounts of the Foundation;


1.5. to appoint a "Successor Protector" who shall become the Protector with full rights and authority thereof upon the absence of the Protector as a result of any event specified in Article 56 of the Act, namely the following:


(a) the resignation of the Protector;


(b) the removal of the Protector in accordance with the charter, regulations or the Act;


© the dissolution of the Foundation; or


(d) the death, incapacity or bankruptcy of the protector, being a natural person, or the winding up or dissolution of the protector, being a legal person.


2. The Protector, if any, shall also have the rights to director or approve the following –


2.1. the investment activities of the Foundation;


2.2. amendment of the charter or regulations;


2.3. appointment or removal of a councillor;


2.4. rights, entitlements and restrictions of beneficiaries;


2.5. addition or exclusion of a beneficiary;


2.6. the proposed continuation of the Foundation as a Foundation registered or otherwise established under the laws

So if you put all this in the hand's of someone you REALLY trust or a local lawyer who is regulated by local applicable laws you may be much more safe than if you put this in the hands of someone you don't know or you only know through the Internet.. Do you get my point or is it nonsense you thinkmg:

 

[hugger]

hmmm, let me try to explain it this way.. I think it should work. Below is the guideline for my Foundation I created in the Seychelles with the help of the forum owners :

The duties of your"Protector" looks very similar to the duties and responsibilities of a Nominee Director of a Company.


So who did you use as your Protector?


Was he the signatory to your Bank account at the opening of the account?


Is he still a signatory to your account?

So if you put all this in the hand's of someone you REALLY trust or a local lawyer who is regulated by local applicable laws you may be much more safe than if you put this in the hands of someone you don't know or you only know through the Internet..

A local lawyer would probably be as seriously tempted to abscond off with the assets of a number of different customers as anyone else. Imagine the temptation to a small local lawyer who is "in control" of a number of Company/Trusts/Foundations Bank accounts. A small local lawyer (in most countries) makes only a modest living at best.

Do you get my point or is it nonsense you thinkmg:

If you have ANYONE ELSE as signatory to YOUR bank account, then you are far more trusting than me

 

[nastathin]

A local lawyer would probably be as seriously tempted to abscond off with the assets of a number of different customers as anyone else. Imagine the temptation to a small local lawyer who is "in control" of a number of Company/Trusts/Foundations Bank accounts. A small local lawyer (in most countries) makes only a modest living at best.

hmmm, I found a trustworthy lawyer in one of the UK's top law firms, have a list here, en.wikipedia.org/wiki/List_of_largest_UK_law_firms I will not reveal who I picked.


There was a trick with the signature to the account that I don't want to say here either, sorry


I care too much of my setup.

If you have ANYONE ELSE as signatory to YOUR bank account, then you are far more trusting than me

Depends on the figures we speak, my assets are below the 1M USD and I trust the people involved.

 

[hugger]

There was a trick with the signature to the account that I don't want to say here either, sorry

That's disappointing because that is the whole crux of the matter... The signatory to the Bank account is the issue.


The key issue is that opening an offshore company is useless if it is necessary to use the Nominee Director to be the signatory to the Offshore Bank account (And banks demand that the signatory to the bank account MUST be the Nominee Director of the Company)


And, if you have ANYONE ELSE as signatory to YOUR bank account, then you are far more trusting than me.


The proposed alternate solution of having a Power of Attorney granted by the Nominee Director, OR an undated, signed resolution and resignation letter from the Nominee Director does not fill me with ANY sense of confidence!!

 

[cymond]

Interesting!


But I thought the whole point of having a nominee director was to avoid being on the public record whilst being able to open and be signatory to a bank account stuffed with your loot and running the company using a general power of attorney.


Of course, if you were absolutely rolling in it, you'd be crazy to put it all in one company, let alone one bank or one jurisdiction.

 

[JohnLocke]

But I thought the whole point of having a nominee director was to avoid being on the public record whilst being able to open and be signatory to a bank account stuffed with your loot and running the company using a general power of attorney.

Indeed it is the reason for why one is appointing nominees i.e. director & shareholder.

 

[hugger]

Interesting!
But I thought the whole point of having a nominee director was to avoid being on the public record whilst being able to open and be signatory to a bank account stuffed with your loot and running the company using a general power of attorney.


Of course, if you were absolutely rolling in it, you'd be crazy to put it all in one company, let alone one bank or one jurisdiction.

If the nominee director is a signatory to the bank account (which EVERY bank will insist on), then he has access to all of your funds in the account.


If your nominee director has given a general Power of Attorney to you, then he can also take that PoA off you at ANY time and then has access to all of your funds in the account.