Nominee Director is a director who serves on a board on behalf of and under the instructions of a third party, often a shareholder.
A nominee director is an individual appointed to a company's board to represent the interests or instructions of a specific party, typically a major shareholder, a lender, or a beneficial owner who prefers privacy. The nominee director's name appears on the public register, but their decisions are guided by a separate nominee agreement, side letter, or shareholder's instruction protocol.
Nominee directors are routinely used in offshore jurisdictions where local residency is required, for venture-backed startups where investors negotiate the right to appoint a board representative, and for compliance with statutory director residency rules in places like the UK, Singapore, and Australia.
The key legal subtlety is that, regardless of any nominee agreement, the director owes fiduciary duties to the company, not to the appointing party. If the company's interests diverge from the appointer's instructions, the director must act for the company.
Failing to do so can expose the director to personal liability for breach of duty, wrongful trading, or violation of conflicts-of-interest rules.
Reputable nominee director services charge an annual fee and require a clear understanding of the company's business and beneficial ownership, including KYC documentation.
Founders use nominee directors when forming an offshore company in jurisdictions like the BVI or Cayman, when setting up a Singapore Pte Ltd that requires a local resident director, or when raising venture capital where the lead investor takes a board seat. Compliance officers must screen any nominee director arrangement to ensure the underlying beneficial owners pass KYC and sanctions checks.
Lawyers stress that nominee directors are not rubber stamps, since the underlying fiduciary duties remain to the company.
See what a company actually costs in year one, and how the jurisdictions compare on tax, capital and timeline.
