Our Turkish lawyers are prepared to assist you in finding a nominee director in Turkey. A nominee director is someone who “assists” you in running your company when you are out of Turkey. He can follow up on the tasks that are required by law, pay taxes, go to Turkish banks, and sign contracts.
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If you appoint a nominee shareholder, he would appear to the world to be the owner of the shares, and you get to keep the arrangement a secret. If the appointment is made correctly, you retain all of the rights and benefits of the shares, such as the right to sell the shares, receive dividends, and vote at general meetings.
How to Find a Nominee Director in Turkey?
Nominee directors are often the family members or trusted friends of the entrepreneur, (persons who act as a director of the company on your behalf). If you are interested in opening a company in Turkey and if you need a nominee director in Turkey you can discuss it with our lawyers.
Why Appoint a Nominee Director and Shareholder?
There are various legitimate reasons for using a nominee director arrangement, though the most common reasons would be to keep one’s identity as the owner of a company confidential and to comply with the requirement that at least one director is a locally resident person.
In Turkey, one can search for incorporated companies to identify the directors of those companies. In other words, the names and other personal details of directors are publicly available to anyone, which is something some entrepreneurs may wish to avoid.
For example, if your business intends to expand into a new vertical or sector in which its customers, suppliers, or distributors are, using a nominee arrangement may help delay or prevent them from finding out that your business is in direct competition with them.
While we have asked to advise on nominee structures by entrepreneurs in the following scenarios:
- You are prevented by the terms of your employment from setting up a business, even if the new business is not in competition with your employer, or
- You are about to resign from your job to start a business but are still serving your notice period or are waiting for your non-compete period to end, and you wish to incorporate a company early.
We would generally recommend that entrepreneurs in such situations be extremely careful, to minimize the risk of being sued for breach of employment obligations and that our advice on the terms of their employment is sought.
The Risks of Using Nominee Directors in Turkey
In our experience as corporate lawyers, we have come across instances where nominee directors are appointed without any written proof of the arrangement, and the beneficial owner relies on a verbal agreement or a “gentlemen’s agreement” with the nominee.
The risks of not getting proper advice or using proper documents to set up the arrangement that you incur the following risks:
- Your relationship with the nominee sours, and he treats the shares as a gift by you and claims that he is the real owner of the shares in the company.
- The nominee demands payment (or more payment) to honor the arrangement.
- The nominee passes away or loses mental capacity, and his representatives, heirs, donees, or deputies refuse to recognize the arrangement and seek to treat the shares as the property of the deceased or mentally incapacitated nominee.
- The nominee becomes uncontactable for any reason.
- The nominee does things contrary to your wishes or intentions, including using the shares as security for a personal loan, selling them, or paying himself a director’s service fee.
- The nominee discloses the arrangement to other persons.
In each of these scenarios, the main risk is losing your ownership of the shares, losing confidentiality, dealing with the consequences of unauthorized actions of the nominee director, and incurring significant legal costs to enforce your rights.
How to Properly Set up a Nominee Structure?
The most common way to set up a nominee-shareholder arrangement is for the nominee to declare a trust over the shares for your benefit, and to sign a declaration of trust. While there are other ways of doing so, such as using call option agreements or loan agreements, these are more complex and are more appropriate for countries that do not recognize the concept of trust or that prohibit the use of nominee structures.
In the declaration of trust, you would typically secure promises from the nominee to act only on your instructions, promptly transfer the shares to you on your request, and account for all the rights and benefits in the shares.
To ensure that the shares are transferred to you even if the nominee refuses or cannot arrange for the share transfer, you may obtain a signed but un-dated share transfer form in favor of you. You may also wish to keep the bearer shares with you (if the company in question is a joint stock company).
As for the nominee director, you should have a properly written document signed by him stating that he will act only on your instructions. You may also wish to have a power of attorney executed so that you can act on behalf of the company, sign contracts, and open bank accounts for it.
It is also common for an undated letter of resignation to be signed by the nominee director, to protect the company against claims by him and to make it easier to remove him at the appropriate time.
The importance of using well-written documents to record nominee director arrangements cannot be overstated, given the risks highlighted above.
Reach us to Find a Nominee Director in Turkey
Our Turkish lawyers are prepared to assist your company establishment in Turkey. Our company formation lawyers are experienced in limited companies, joint stock companies, branch offices, liaison offices, and free trade zone company formation, management, and governance in Istanbul.
Legalixa Law Firm is one of the leading law firms providing company formation services in Istanbul, Turkey. You may reach us to find a nominee director in Turkey through our Contact page.
