Risks related to the appointment of nominee Board members and owners for an Estonian company
Nominee director (Board member) is a person who registers a company in one’s own name with the Estonian government authorities, while the company is actually managed by other people. The nominee director is usually not involved in (and often has no idea about) the actual business activity of the company.
Board member of an Estonian company is a person who manages the company and is responsible for all of its activities. The details of the Board member are specified in the Certificate of Incorporation of an Estonian company and are publicly available. The management Board of a company may have one or more board members. It is the Board member who has the authority to sign on behalf of the company and have access to the company’s bank account.
Beneficiary owner of an Estonian company is a person or several persons who directly or indirectly own a legal entity (at least 25% of its equity capital) or significantly impact its decision-making. From September 1, 2018, all legal entities registered in Estonia are obliged to publish data on beneficiary owners in accordance with the fourth anti-money laundering directive (Directive (EU) 2015/849, officially named Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing).
According to the Estonian law, a Board member shall be appointed by the owners of the company’s by drawing up a minutes of the general meeting of owners. If the nominee Board member and the nominee owner are the same person, the actual beneficiary of the company has no right to change the management Board of the company and may have no right to access the company’s accounts without the consent of the nominee director. Company share ownership can only be transferred to a new owner under a notarised company purchase agreement – otherwise it shall not be considered legal.
In view of the above, the fate of an Estonian company registered to a nominee director/owner is completely in one’s hands, and, in case of disagreement with the actual beneficiary, the latter may completely lose control over the company.
When you become a client of Company in Estonia OÜ, you can receive all the necessary services in one place: setting up a company, accounting services and advice, assistance in obtaining the necessary licenses and permits, legal support for your Estonian company, advice on opening an account and all amendments to legal and tax regulations of Estonia.
P.S. Beware of fraudsters offering nominee services and highlighting only the benefits that your company can get without highlighting the high risks and the fact of violation of Estonian law.