Why Use Nominees for Offshore ICOs?

Are you looking to launch an ICO via Incorporation of an Offshore Company?


If so there are at least two reasons why you would want to consider deploying a Nominee Shareholder and or Nominee Director as part of your Corporate Structure:


1. Tax Planning Considerations


Generally speaking an Offshore Company which is seen to be managed and controlled from Onshore can be taxed onshore.


Hence when setting up an Offshore Company, if you want to minimise the chances of the Company being taxed “onshore”, Management and Control of the Company will need to be, and be seen to be, taking place from Offshore. How that can be achieved is by deploying a Nominee Shareholder and or Nominee Director as part of the Corporate structure.


If you are also setting up a Foundation as part of the Corporate structure you will want to have the Foundation founded by a Nominee Founder (which service we provide)  which then assign its rights confidentially to you. Again for tax planning purposes you will want the Foundation to be managed day to day by a nil tax jurisdiction resident Nominee Councillor (which service we also provide).


There are a number of features we can and will include to protect your ownership rights (which will prevent the Nominees from running away with your property or money). For more information on that and how the Nominee Services can work for you see our FAQs section and also please click on these links:






How it works practically speaking is the company would do the buying and selling, ie it would generate the income. Ideally, you would be appointed as Consultant or as an arms’ length adviser to the Director of the Company with certain areas of responsibility. You might then be paid a commission (e.g. a percentage of business or sales introduced) or a retainer or a combination of the two.


As part of your brief you might also be given signing power on a bank account reporting/answerable to the Director. However that relationship is structured for legal reasons, it would need to be seen to be commercially realistic.


The income you generate from this would be paid to you (or your local ie/eg onshore company which, I imagine, would then pay a dividend to you), which would be assessable income at home for you (although a smart Tax Accountant should be able to find a heap of tax deductions/writeoffs to reduce the amount of tax payable on that income eg rent, home office, car, travel, utilities, electricity, phone, internet, furniture, computers/plant & equipment, stationery, professional library, subscriptions etc etc). The remainder of the profit could be held (and/or reinvested) offshore potentially tax free.


You could alternatively be given a Power of Attorney. For guidance on which option to choose please click on this link: https://offshoreincorporate.com/faq/should-i-select-a-general-power-of-attorney-or-a-consultancy-agreement/


2. Nominees and ICOs


In the case of an ICO there are different and additional reasons why you would set up the Company using at least a Nominee Director.


The main risk for an ICO promoter is regulatory risk. Simply put if you are offering a Token to investors it could be classified under certain countries laws as a Security.


Generally speaking it is illegal to offer a Security to the general public unless (a) it is a registered security and (b) you are a licensed securities dealer.


If your Company comes under the Regulator’s microscope and you are the Director of that Company you could be charged with unlawfully offering a security. In certain countries the penalty for this, if you’re found guilty, can be imprisonment.


If you want to minimise the chances of this happening, you would be wise to deploy a Nominee Director (and ideally also a Nominee Shareholder) as part of your Corporate Structure (even if you have every intention of paying tax at home on the Company’s entire worldwide income)


If you’re concerned about appearance what you could also do (ie where a Nominee Director is deployed) is have yourself appointed by the Company via a Consultancy Agreement and choose your title. Eg In emails or texts or letters etc you could call yourself CEO or Founder or GM or CFO or Client Liaison Manager or whatever sounds best to you (anything but Director)!


Local laws can also have an impact. Hence you should seek local legal financial and tax advice before committing to incorporate an Offshore Company as your ICO Launch vehicle.


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