When a corporate nominee is no more…buyer beware…

By John Martin St. Valery, Founding Partner of The Links Group

 

Back in 2003, when The Links Group pioneered the concept of a corporate nominee partner for foreign companies establishing in the UAE, there were three basic principles to be borne in mind when incorporating or maintaining such an entity:

  • Total compliance with companies law in relation to the local partner (corporate nominee or not) providing services of value to the foreign/client company
  • Non-interference of operational, management or financial control
  • Beneficial ownership and control remaining with the foreign/client company

These principles – or duties of care – are the cornerstone on which The Links Group maintains all its foreign/client relationships today, without fail.

 

It is somewhat surprising to note in the market that a number of recently established ‘corporate nominee services’ for onshore company formation use the term nominee rather loosely. How can an entity purporting to be a corporate nominee suggest that they should be remunerated by way of share of revenue or profits? Is this a true independent nominee as sold?

 

More bizarrely, can a nominee partner really claim to be just that when they suggest shared beneficial ownership?

 

Buyers beware – this relatively unregulated market sector can be a trap for those not fully aware of their ownership rights.

 

Take independent legal advice from a properly licensed and regulated firm.

 

Article by Links Group on Nov 2nd 2014
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