A nominee shareholder is an person, unrelated to the actual owner, who is officially registered as the holder of shares in the company – both in the internal Registry of Shareholders of the company and in any public registries. In Cyprus, the rational purpose of the nominee shareholder is to shield the real owner of the Cyprus company from being publicly shown as shareholder. Shareholder information in Cyprus is part of public record, as is the case in the entire EU.
Engaging a nominee shareholder may be useful for anyone who prefers a degree of privacy and modesty, and does not wish to be immediately seen as owning a certain business. There is a personal security dimension to such desire as well.
When a nominee shareholder is engaged as a service, a confidential legal document (a declaration of trust, nominee services agreement or a similar document) is issued by the nominee to the actual owner. Such document would confirm in writing the actual maters of fact – namely, that the shares are only held by the nominee for the benefit and on behalf of the beneficial owner, and that only the beneficial owner is entitled to all benefits and profits from those shares.
Nominee shareholder service is optional. Licensed company administration firms, such as ours, usually provide this service through a dedicated in-house corporate entity, which is covered by the umbrella license of the main firm and is thus equally regulated and accountable.
