over 2 years ago

Confidentiality is a legal term in corporate law that refers to a level of privacy that companies can enjoy in order to keep certain information and documents secret. However, it may be necessary to identify the directors who actually run the company. The confidentiality afforded by nominees is one of the main benefits of many tax havens.

In many countries, a list of directors is publicly available. At first glance, this seems to be a logical requirement, as it can play a role in everyday business life - for example when concluding contracts, starting a new business relationship or negotiating prices when concluding a contract.

Directors' Confidentiality Directors have full control of a company and enter into a fiduciary relationship with it. Directors are required to maintain the confidentiality of any information they receive as a result of their position within the Company. Nominee services typically offer high standards of confidentiality, as some countries have significantly fewer legal requirements for disclosure of information.

Typically, in onshore jurisdictions, the board of directors is responsible for the company's activities, so if the tax authority has any doubts about the legality of a tax optimization program, it is first challenged at the board level. Internal corporate governance documents require a specific decision-making process that involves discussion, so there is generally a degree of trust and collegiality between directors.

Internal regulations are generally not binding for third parties. However, it helps when responsibility is shared, and as such, from time to time, the Board of Directors will revise Company policy and make changes to clarify that a director's duty of confidentiality is not limited to non-public Company information. but also contains information on insider trading regulations.

Shareholder Confidentiality Again, a list of shareholders is publicly available in many countries, so this information is accessible to both government institutions and private entities. This is the case in most European Union countries that have a public business register. However, in low-tax jurisdictions, personal assets enjoy a higher level of privacy, increasing the level of protection for one's assets. For example, in court proceedings, the plaintiff may seek an injunction to freeze the defendant's assets. If the court does not have a privilege to obtain data on these assets, protecting the defendant's property will be easier and it will require much more effort on the other side to gain access to it. The same applies to other government agencies.

Another issue of wealth protection relates solely to receiving dividends. Dividends are taxable income and the tax authorities may take note of the income received and impose taxes. Accordingly, the beneficial owner should take care to keep his assets safe and maintain all records. The main advantage of certain jurisdictions is that the administrative burden in most tax haven countries is minimal and the law does not require detailed information. In some jurisdictions, bookkeeping is not mandatory. According to a general principle of tax law, the tax to be paid depends on the country of origin of the income. Therefore, the choice of jurisdiction for the placement of assets plays a fundamental role.

The importance of confidentiality From a tax planning perspective, confidentiality is important. There is a very fine line between protecting and hiding assets, and this issue can be resolved by consulting professional and competent lawyers and accountants. Tax advisors also know best which jurisdictions are suitable for their client, since each case can be different and should be examined individually.

The level of confidentiality should be established when engaging an agent to provide nominee services. Confidentiality itself is not strictly regulated and as such internal company documents and agreements between the client and agent are likely to be helpful in resolving any situations that may arise.

Confidentiality Risks In many countries, you are required by law to keep all worldwide assets, including real estate, vehicles, business assets, cash, stocks, etc

https://www.confiduss.com/en/services/incorporation/criteria/confidentiality/