The nominee agent in Hong Kong acts on behalf of another individual or on behalf of a legal entity, upon specific request. The agent is chosen and legally nominated to handle one or more business or personal issues. The nominee can act on behalf of an investor in Hong Kong during the company registration in Hong Kong or he can be assigned as a nominee director for a company incorporated in the city.
Any individual that acts as a nominee in Hong Kong must be duly appointed and his or her rights and obligations specified in the company documents or in the amendments thereof.
Nominee directors in Hong Kong
The Company Law in Hong Kong indicates that corporations set-up in the city need at least one director. A nominee director can be a solution for investors who want to protect their identity. The role of the nominee can be limited and the beneficial owner can decide that he will not interfere with the usual management role of the true company director. His or her purpose is during company registration in Hong Kong.
Investors who prefer using this method can draw up a power of attorney, the document which will help them assign specific rights and powers to another party. The activities that may be undertaken by the nominee agent (who, in this case, acts as a director) expire upon the termination date of the said document.
Nominee director FAQ
Before choosing to assign a nominee, investors may wish to receive answers to a number of questions concerning not only the appointment of these individuals, but also their level of involvement in the company, their overall role and the liabilities they will undertake. Below, our team of company formation agents in Hong Kong answers some of these common questions.
1. What are the duties of the nominee?
The nominee director in Hong Kong is appointed at the request of the beneficial owner. This means that confidentiality is an important duty one undertakes when engaging in this role. The appointed nominee will be the one who will oversee the company’s operations and will ne the one that will sign the relevant documents, as well as the one whose name will appear in the Hong Kong Companies Registry.
A fiduciary duty is one of the most important duties of the nominee. This encompasses the duty of care, of confidentiality, as well as a duty of loyalty. When an appointed nominee agent in Hong Kong breaches this duty, the one who appointed the agent can make a claim for the losses sustained thereof. Not all of the fiduciary breaches have legal consequences, however, it can result in direct as well as indirect damages.
2. What are the main responsibilities one undertakes as a company director in Hong Kong?
The main responsibilities of the company director are defined not only in the legal entity’s constitutive documents, but also in various sources of law, such as the Corporations Act, case and statute law. Some of the most important responsibilities, or duties, are briefly listed below by our agents:
- act in good faith: this means that he will act in the best interests of the company and its shareholders;
- exercise care and diligence: in all matters concerning the company, the director is expected to exercise diligence, care and skill; general knowledge and experience are reasonably expected from a person in this position;
- conflict avoidance: the director is to avoid any conflicts between his personal interests and the interests of the company;
- compliance: the director is also the one who has the duty to observe the accounting principles, ensuring that the company maintains proper books of account; for this purpose, the company employs a certified public accountant.
3. Is the nominee liable for the Hong Kong company’s actions?
The appointed nominee is liable as per the duties described above. This means that, under the Corporations Act/the Companies Ordinance, he is liable for the duty of care as well as to act in good faith and not against the interests of the company/in his own interests.
He shall not enter into agreements or transactions that are uncompliant with the law in force and he is expected to not use his position as a company director in order to gain advantage.
The director can, in some cases, be placed on a position of personal liability. This is also the case when corporate bankruptcy is possible,
4. How is the nominee revoked?
As per the law in force, an ordinary director in Hong Kong is removed when a resolution is passed at a shareholder’s meeting. If this is the case, the director needs to be given the right to be heard. Alternatively, he can be removed through a court-issued order.
In the case of the nominee, the formal process of removing the director through a shareholder’s resolution also takes place as per the laws in force, however, the removal will be at the request of the beneficial owner.
If you have different questions, or if you wish to receive specific answers to your particular situation, please do not hesitate to reach out to one of our agents.
Nominee shareholders in Hong Kong
The same principle can apply to shareholders in Hong Kong. Most types of companies require two or more shareholders. When investors want to protect their identity they can use a nominee shareholder to act on their behalf within the company and during the shareholder’s meetings. When the company shareholder and director are one and the same, the nominee agent is able to act in both situations.
Our agents who specialize in company formation in Hong Kong are able to advise you on the best way to preserve your identity and how you can request nominee agent services for various purposes.
Companies in Hong Kong
Company formation in Hong Kong is a simple process, and one that can be handled by one of our specialized agents, when foreign investors cannot be present in the city during the entire incorporation process. Using a nominee agent is possible irrespective of the business field in which the company activates.
Below, our team provides a snapshot of the key industries in the Special Administrative Region, based on data released by the Census and Statistics Department:
- – financial services: accounting for 23.3% of the GDP in 2020 and 21.2% of the GDP in 2019;
- – trading and logistics: 19.8% of the GDP in 2020 and also the same value in 2019;
- – professional services: 11.6% in 2020 and 11.9% of the GDP in 2019;
- – tourism: 3.6% of the GDP in 2019.
If you would like to know more about the regulations in these industries, you can reach out to us. We can help you if you already have a company in one of these sectors and wish to appoint a nominee agent.
You can contact us for more details about the company formation process in the city and requirements for investors.