Nominee Director
Overview
A nominee director is an individual appointed to a company’s board to act on behalf of another person or entity, often to conceal the true beneficial owner. While legal in some jurisdictions, nominee arrangements are frequently exploited for money laundering, tax evasion, or hiding criminal ownership.Regulators require financial institutions to identify nominee directors during KYB and UBO checks.Detecting nominee directors helps uncover shell companies and ensure transparency in ownership structures. Banks, fintechs, and regulators rely on registries, corporate filings, and due diligence investigations to flag nominee roles. Transparency in directorship is essential to maintaining compliance and preventing misuse of corporate structures.
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FAQ
What is a nominee director?
An appointed director acting on behalf of another person or entity.
Why is it a compliance concern?
It can conceal beneficial ownership and enable illicit activity.
Who monitors them?
Regulators, banks, and KYB teams in financial institutions.
How are they identified?
Through corporate filings, registries, and beneficial ownership checks.