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Shareholder or beneficial owner?

May 20, 2013 - by Nida U.
Shareholder or Beneficial Owner

Some clients want to buy an IBC but don’t want to disclose any information from their side, while others order full management package and wonder why they are not indicated as shareholders…

When it comes to buying an offshore company, the distinction between shareholder and the ultimate beneficial owner (UBO) has to be clear. When you look at the names as such they already tell you that shareholder is the “holder” of shares and UBO is the real owner.

You can be both, that is not a problem. BUT then make your mind up, do you want to keep your privacy intact or not!

You can shield your name from public, by choosing someone else to become the nominee shareholder, in this case that someone else will be holding your shares for and on behalf of you. Usually this relationship is confirmed by a Trust Declaration, which states that the nominee is in fact holding your shares for and on behalf of you. So in reality, you are still the real owner, and it is you who is entitled to all gains, profits and benefits accruing to such shares.

As to those who want to buy an offshore company and tell us nothing?! Impossible! We, just like all other licensed Registered Agents, are by law required to know your identity, and not only know your name and address, but we require a full set of documents to prove this. This is known as Due Diligence or Know Your Client (KYC) requirement. Legally you will find it impossible to purchase an offshore company absolutely anonymously!

That being said, you should know, that if you do choose the nominee shareholder services, you are still greatly protected. As all your personal information stays only with us in your file, and no information becomes available for public!

Thank you for reading my post! And you are welcome to leave comments, feedback, suggestions for other posts or contact me for more information.

Commentaries

  • Brian May 21, 2016 at 11:12 AM
    You wrote above that UBO is still entitled to all benefits accrued in shares, held for UBO on trust by nominee. However, is it not true, that in such a set up, that UBO is not entitled to receive dividends directly from the company, which shares are not directly registered in his name, but held in UBOs name by the trust? So the trust have to receive dividends first, and then pass the dividends on to the UBO?
  • Nida U. May 24, 2016 at 08:14 AM
    Hi Brian. If Trust is established, then you are right, the dividends will go to the Trust first, and then will be passed on to beneficiaries of Trust. Above I mentioned Trust declaration, which is not a Trust, but a document that evidence the actual state of affairs – namely, that the shares are only held by the nominee for and on behalf of the beneficial owner, and that only the beneficial owner has the right to dispose of those shares and is entitled to all benefits and profits deriving from those shares.

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