What is the purpose of the nominee director?

The main purpose of using a nominee director is to prevent the general public from knowing that a direct relationship exists between the beneficial owner and his offshore company. Employing a nominee director or a nominee manager in the offshore company helps to avoid implications that the beneficial owner closely controls and operates the particular offshore company (the "management and control" concept). So, essentially, the main purpose of the nominee director is to shield the confidentiality of his client.

The nominee director can perform various managerial functions, which would otherwise need to be performed by the beneficial owner or someone directly related to him. The actual involvement of the nominee in the daily matters of the offshore company can vary according to the needs and circumstances of the owner. Generally, the more involved nominee gets into the daily management of the IBC, the more expensive this service becomes for the offshore company. Quite often (but not always), the involvement of the nominee remains, as the name suggests, nominal. In this case all practical functions of the regular management of the company are usually carried out by the owner of the company himself, acting as a "representative" of the IBC on grounds of a power of attorney. For more information on this topic, please refer to the Company Management chapter.