Frequently Asked Questions on Cyprus Companies - What is a ‘nominee Shareholder’?

Companies should have a minimum of one Shareholder.  A nominee Shareholder is a Shareholder of a company who holds shares nominally only, that is, only in name.  In such a way the identity of the actual Shareholder(s) or beneficial/true owner of the company is not disclosed thus corporate and financial privacy and anonymity is secured.   Nominee Shareholder(s) hold the shares in trust for the beneficial/true owner of the company.  Thus, the nominee Shareholder is a trustee holding the ‘numbered’ shares in trust for the beneficiary who is the true owner of the company.  The nominee Shareholder holds the legal title of the shares whereas the beneficial owner holds the beneficial title of the shares.  A declaration of trust is signed by the nominee Shareholder indicating that he has no rights whatsoever on those shares. This Declaration of Trust is a private agreement between Nominee Shareholder and Beneficial Owner and is not open for viewing by anyone else, even the Registrar of Companies. It will only be requested by a bank if an account is to be opened. It is the beneficial owner who is entitled to income and capital gains on the shares.   This safeguards the rights of the Beneficial Owner.  It is also customary for the Nominee Shareholders to issue and sign an undated Instrument of Transfer in favour of the Beneficial Owner which he can use at any moment to legally transfer the shares in his name.