Should I Appoint a Nominee Director When Setting Up A Company?

Many clients decide to appoint a nominee director when they set up a Panamanian Company. While this is not obligatory, it is often helpful. Whether you need to assign nominee directors will depend on several issues.

Protecting Your Privacy – Advantages of Appointing a Nominee Director

Companies often appoint nominee directors because they do not want to reveal in the Articles of Incorporation. Let’s say you are the owner of the Company and you want control over the organization, but you also don’t want a lot of people knowing your business interest. When you appoint nominee directors, those people will appear as administrators of your company in the Public Articles of Incorporation. You get protection without giving up control because you still will be the owner of the company. Also, the nominees will issue a General Power of Attorney in your favor so you can have complete control over the company.

Nominee Directors Have Limited Power

A client will obviously worry that nominee directors might gain influential power within the Panamanian company. Nominee directors, however, are only for company incorporation. The real owner of the Company (Shareholder) will still maintain rights to the company bank accounts and shares. Nominee Directors won’t have any rights related to the bank account of the company, due to the fact that they won’t be signatories of such account. The shareholder must always be the signatory.

The nominee director does, however, act as the public administrator of your company. Also in many cases, the Minutes of the Board of Directors and Shareholders will need to be signed by them. The Law Firm that incorporates your Panamanian company will also help in the Nominee Director Service. So, it is important that you work with a Law Firm that you trust.

For Bank Account Purposes

Due to the fact that in Panama is a requirement for all members of the company to travel to the country for an interview with the bank, in many cases is difficult for the client to arrange the traveling of all members. In case the directors are nominees the only ones that need to travel will be the shareholder(s) / signatory (ies).

Also banks in Panama and also the bank outside of Panama request for the directors to provide to the bank, bank reference, commercial reference, and personal references, even if they won’t be signatories of the account.  In case the client chooses to appoint nominee directors, it will only have to worry about providing its own documents.

For more information visit: https://www.delvallepanama.com/offshore-bank-accounts/requirements-for-opening-bank-accounts-in-panama.html

At Delvalle & Delvalle, the nominee directors are members from our law firm; real people with bank references as well as commercial reference, so if the clients need to provide those documents to a bank or any institutions will be happy to assist.

It’s very important to take this into consideration when choosing this service.