What Are Fiduciary and Nominee Director Services?
In cross‑border structures it is common to appoint professional service providers to act as directors, shareholders or signatories. These are often described as fiduciary or nominee services.
The objective is usually to ensure local management, provide administrative support and simplify dealings with banks and authorities. However, these roles carry real legal responsibilities and must be carefully managed.
Key Legal Responsibilities
- Duties of directors: In most jurisdictions, directors owe duties to the company, not to the appointing shareholder. Nominee directors must exercise independent judgment and cannot simply follow instructions.
- Substance and management: Where tax or regulatory outcomes depend on management and control being in a particular jurisdiction, minutes, decision‑making processes and information flows must be carefully structured.
- AML/KYC obligations: Fiduciary providers are subject to strict anti‑money laundering and know‑your‑client requirements.
- Conflicts and documentation: The relationship between the ultimate beneficial owner and the fiduciary should be clearly documented, with appropriate indemnities and information rights.
Benefits and Risks for Clients
Properly structured fiduciary arrangements can bring real benefits:
- Local expertise and continuity of administration.
- Support with filings, board meetings and bank interaction.
- Enhanced credibility with counterparties in some markets.
However, poorly designed arrangements can create tax, regulatory and reputational risk if they are seen as artificial or if decision‑making is not genuinely aligned with documentation.
Best Practices When Using Fiduciary Services
- Choose reputable providers with clear, written terms of engagement.
- Agree decision‑making processes and information flows from the outset.
- Maintain good records of board meetings and key decisions.
- Regularly review whether the structure still meets your commercial objectives and risk tolerance.
How We Support Clients
Seraama Bespoke Lawyers advises on the legal aspects of fiduciary and nominee arrangements, including:
- Reviewing provider terms and engagement letters.
- Drafting board and shareholder documentation.
- Advising on governance, substance and risk allocation.
- Coordinating with tax advisors and fiduciary firms across jurisdictions.
If you are considering using fiduciary or nominee services as part of an international structure, contact us to discuss suitable options.