What Is a Nominee Shareholder?
A nominee shareholder is an individual or entity that holds shares in a company on behalf of the beneficial owner.
While the nominee’s name appears on the company’s official records, the true ownership and rights to dividends or proceeds remain with the beneficial owner.
Nominee shareholding is a common legal arrangement used in offshore jurisdictions to protect privacy and simplify corporate structuring.
Why Use a Nominee Shareholder?
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Confidentiality – The nominee’s name appears on the public company registry, allowing the beneficial owner to remain private.
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Ease of Administration – The nominee can act on behalf of the beneficial owner when signing shareholder resolutions or handling corporate filings.
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Compliance Support – In some jurisdictions, a local shareholder may be required to meet incorporation or residency criteria.
Rights and Limitations
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The nominee holds the shares in trust for the beneficial owner.
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The beneficial owner retains full economic rights — including dividends, sale proceeds, and decision-making authority.
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The nominee cannot transfer or use the shares without written consent from the beneficial owner.
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A Declaration of Trust (DOT) or Nominee Agreement is signed to formalize the relationship and protect both parties.
Risks & Safeguards
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Always use a professional service provider that issues a Declaration of Trust and maintains proper documentation.
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Ensure all nominee arrangements are transparent to banks and regulators during KYC and due diligence checks.
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Avoid using informal or undocumented nominee relationships, as these may cause disputes or compliance issues later.