What is a declaration of trust?

A declaration of trust is legal document that identifies the actual beneficial ownership of some asset – typically, shares in a company. A declaration of trust in the context of an offshore company is a written statement issued by the nominee shareholder to the beneficial owner. This statement confirms that the nominee is in fact holding the shares in the company for and on behalf of the beneficial owner, and not for his own name. Such document would clearly state the name of the beneficial owner as the real owner of such shares, and would also reiterate, that the nominee can not transfer, deal with or dispose with the shares otherwise, than only under express written instructions by the beneficial owner. It would also state that all rights, profits, dividends and other benefits potentially accruing from such shares belong to the beneficial owner, and not to the nominee.