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The importance of nominee shareholders and why they are important

The importance of nominee shareholders: Why they are important

Who is a nominee shareholder?

A nominee shareholder, also known as a straw man shareholder, is a person or company that is officially registered as a shareholder of a company but is acting on behalf of and in the interests of another. This structure is often used to disguise the identity of the actual owners or for other strategic reasons.

The advantages for companies in Ireland

AnonymityThe use of nominee shareholders allows investors to conceal their true identity and keep their investment secret. This is particularly interesting for investors who want discretion and want to keep their business interests private.

Tax optimizationNominee shareholders can help save taxes by making the actual shareholders resident in countries with more favorable tax laws. This can lead to significant tax advantages.

Limitation of liabilityNominee shareholders can be officially registered as owners to protect beneficial owners from personal liability. This provides an additional shield against legal claims.

Smooth share transferThe use of nominee shareholders can simplify the share transfer process as only the nominee needs to be changed as the official owner. This can be particularly advantageous for frequent transfers.

An example

A European businessman wishes to become a shareholder in an existing or newly established company in Ireland and remain anonymous. He appoints a nominee shareholder service provider to officially hold the shares in the Irish company, while he himself remains the beneficial owner. This structure allows him to keep his shareholding secret and potentially save tax by benefiting from more favorable tax laws.

Obligation to disclose identity

In certain situations, the true beneficial owners must be disclosed despite the use of nominee shareholders. This may be the case in the financial sector, real estate transactions, government tenders/contracts and tax audits. These disclosure obligations serve to combat money laundering, corruption and tax avoidance. It is important to know and observe these legal requirements in order to avoid legal consequences.

Conclusion

Nominee shareholders offer a variety of benefits, including increased anonymity, tax optimization, limited liability and simplified share transfer. For European business people looking to invest in Ireland, this structure can be an effective solution to protect and optimize their holdings. However, it is important to be aware of the legal requirements and disclosure obligations to ensure full compliance and avoid potential legal issues.

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Disclaimer: Please note that the above dates, tax rates and regulations may change over time. Do not make any independent decisions without first consulting an expert for your individual situation. It is in your interest to always receive individual information from an experienced expert who knows your situation.

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