What is Nominee director?
A nominee director is a professional appointed to a company's board in place of the beneficial owner, usually to satisfy local-director requirements or keep the owner's name off public registers. The nominee acts on the owner's instructions under a service agreement, while control and economic benefit stay with the owner.
Legitimate uses - and the limits
Two legitimate drivers: statutory requirements (Singapore requires at least one resident director; some licenses require local directors) and privacy from public registers. What nominees do not provide: anonymity from regulators, banks, or tax authorities - UBO disclosure applies regardless of who sits on the board. Using nominees to hide ownership from authorities is illegal in every reputable jurisdiction and a fast route to frozen accounts.
How the arrangement is documented
A proper nominee setup includes a nominee services agreement defining the scope of authority, a general power of attorney or reserved-matters list keeping decisions with the owner, and often an undated resignation letter. Banks will ask for all of it - an undocumented nominee is a red flag, not a shield. Fees run roughly $1,500–5,000 per year depending on jurisdiction and the nominee's actual involvement.
Substance and liability considerations
A nominee director carries real legal duties and liability, which is why professional nominees refuse high-risk instructions and require indemnities. For tax purposes, a board consisting only of nominees who rubber-stamp decisions made elsewhere can undermine claims of local management and control - relevant for economic-substance rules and treaty residency. If substance matters for your structure, you need directors who genuinely decide, not sign.
Frequently asked questions
Does a nominee director hide me from banks and regulators?
No. UBO disclosure rules require identifying the beneficial owner to banks, agents, and authorities regardless of board composition. Nominees only keep your name off public-facing registers where those exist.
When do I actually need a nominee director?
Mainly when a jurisdiction or license requires a local resident director (e.g., Singapore, some gaming licenses) or when public-register privacy matters. Most BVI or Delaware setups do not need one.