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.

Nominee Directors in Panama: How They Work and Why They Matter

Many business owners consider appointing a nominee director when setting up a company in Panama. This practice helps maintain privacy, simplifies administrative processes, and ensures compliance with legal requirements. But how exactly do nominee directors work, and what are the benefits and limitations of using one?

At Delvalle & Delvalle, we provide trusted nominee director services, ensuring that our clients receive professional representation without sacrificing control over their businesses. This article’ll explore how nominee directors operate in Panama and why they might be a valuable asset to your company.

What Is a Nominee Director?

A nominee director is appointed to serve as a company’s public face while the owners maintain control behind the scenes. In Panama, the names of a company’s directors appear in the Public Registry, making nominee directors a popular option for those who prefer to keep their involvement private.

However, nominee directors do not have ownership rights over the company. Their role is strictly administrative, ensuring compliance with local regulations and facilitating company formation. The real owners (shareholders) maintain complete control, often through a General Power of Attorney, which allows them to manage the business without interference.

By appointing a nominee director, business owners can establish their company while protecting their identity and maintaining operational control.

Privacy Protection: Keeping Your Ownership Confidential

One of the main reasons business owners appoint nominee directors is to protect their privacy. In Panama, company directors’ names appear in the Public Articles of Incorporation, meaning anyone can see who manages a business. If you prefer to keep your involvement confidential, a nominee director ensures that your name does not appear in public records.

Here’s how it works:

• The nominee director is listed as the company’s administrator in official documents.
• The owner (shareholder) retains complete control through a General Power of Attorney.
• The nominee director has no ownership rights or influence over company decisions.

This setup provides a strong layer of anonymity without limiting your authority. You remain the ultimate decision-maker, and all legal ownership stays in your hands.

Nominee Directors and Their Limited Authority

A common concern among business owners is whether a nominee director might gain too much control over the company. However, in Panama, nominee directors have strictly limited authority, ensuring that the actual owner retains full decision-making power.

Here’s what nominee directors can and cannot do:

✅ Can:

• Act as the public representative of the company.
• Sign corporate documents such as Minutes of the Board of Directors and Shareholders when required.
• Ensure the company meets legal requirements.

❌ Cannot:

• Access or control company bank accounts (only shareholders/signatories can do this).
• Make business decisions without the owner’s approval.
• Claim ownership of company shares.

Banking Advantages: How Nominee Directors Simplify the Process

Opening a bank account for a Panamanian company often involves multiple steps, including an in-person interview with the bank. One key benefit of appointing nominee directors is that it simplifies this process.

Here’s how nominee directors help with banking:

• Fewer Travel Requirements: All company directors must attend a bank interview in Panama. If you use nominee directors, only the shareholders/signatories must travel, making the process more convenient.
• Easier Document Submission: Banks require financial and personal references from company directors. If you appoint nominee directors, you only need to provide your documents rather than collecting paperwork from multiple directors.
• International Banking Compliance: Many banks in Panama and abroad require due diligence on directors. Since Delvalle & Delvalle provides trusted professionals as nominee directors, we can assist in providing the necessary documentation to banks or financial institutions.

Using nominee directors, you can reduce paperwork, avoid unnecessary travel, and speed up the banking process, allowing you to focus on running your business.

Choosing the Right Nominee Director Service

While nominee directors offer many benefits, choosing a trusted and professional service is crucial. Not all providers operate transparently, and working with the wrong nominee director can create legal and financial risks.

Here’s what to consider when selecting a nominee director service:

• Reputation & Experience: Ensure a reputable law firm provides the nominee directors with experience in Panamanian corporate law.
• Legal Compliance: The nominee director should comply with all Panamanian regulations and provide the necessary documentation when required.
• Security & Trust: Avoid unverified services that might misuse their role. Always work with a firm that prioritizes your security and confidentiality.

Appointing a nominee director in Panama can provide significant benefits, including enhanced privacy, simplified banking procedures, and compliance with corporate regulations. While nominee directors act as the company’s public face, the actual owner retains complete control through a General Power of Attorney and remains the only authorized signatory for bank accounts.

However, choosing the exemplary nominee director service is essential to ensure security and trust. At Delvalle & Delvalle, we provide professional nominee directors who are experienced legal professionals, ensuring compliance with Panamanian law and offering the necessary documentation for banking and corporate needs.

If you are considering using a nominee director for your Panamanian company, contact Delvalle & Delvalle today for expert guidance and a service you can trust.