I have been leading COREDO since 2016 and see every day how entrepreneurs in Europe, Asia and the CIS countries balance the need to protect privacy with the duty of full transparency towards banks and regulators. Nominee services for companies are a finely tuned instrument. They work when AML/KYC methodology is observed, powers are properly documented and economic substance is established; and they also carry significant legal, tax and reputational risks if implemented carelessly.
Over the years the COREDO team has delivered projects in the EU, the Czech Republic, Slovakia, Cyprus and Estonia, as well as in the United Kingdom, Singapore and Dubai. We’ve taken clients through the full cycle, from company formation and bank account opening to obtaining financial licenses and an independent AML audit. In this article I combine COREDO’s practice and the regulatory novelties of 2024–2026 to give you a practical roadmap for nominee service taking into account beneficial ownership registers, economic substance requirements and evolving rules on information exchange.
Why do entrepreneurs need nominee service?
Nominee director and nominee shareholder: these are appointed persons, formally holding positions and/or owning shares on behalf of the beneficiary (beneficial owner). Nominee holder services are used for operational flexibility, protection from competitors’ intrusive attention, and structuring corporate governance when operating in multiple jurisdictions. A proper nominee arrangement does not change economic control and does not conceal the UBO; it allocates functions and formalizes agency powers.
Boundary of control, the key criterion. The nominee’s agency powers should not turn into de facto management of the business without oversight by the beneficiary. When a nominee makes strategic decisions and the documents do not record mechanisms for instructions and reporting, there is a risk of requalification of control and of questions regarding substance and tax residency.
Regulatory outlook 2024–2026
The overview of regulatory changes for 2024–2026 reveals key trends toward tighter control and greater transparency requirements for corporate structures. Below we examine in detail what changed in nominee service practice in 2026 and what this means for compliance and operations.
What changed in nominee service in 2026?
By 2026, regulation of nominees in the EU and leading international centers is becoming more detailed. Beneficial ownership registers in the EU are evolving after restrictions on public access: access remains available to obliged entities (banks, corporate service providers) and regulators, and data verification standards are being tightened. COREDO’s practice confirms that even with formally closed registers, requests from banks and FIU (Financial Intelligence Unit) require the same depth of transparency as in 2022–2023.
Beneficial ownership registers in 2026 will likely receive improved APIs for inter‑agency exchange, and the obligation to update data within short timeframes will become standard. In the UK Company House is strengthening verification controls, and in a number of EU countries a preliminary KYC‑filter is being implemented when submitting UBO data, which increases the responsibility of the applicant and the provider.
Impact of CRS, FATCA and BEPS on nominee
CRS (Common Reporting Standard) and FATCA continue to act as an “X‑ray” for cross‑border shareholders and accounts. From 2026, active integration of the Crypto‑Asset Reporting Framework (CARF) by a number of jurisdictions is expected, which will erase the illusion of “invisibility” of operations with tokenized shares and corporate wallets. In COREDO projects we are already implementing CARF‑compatible processes in corporate and licensed crypto structures in Cyprus, Estonia and Singapore.
AML and nominee service: a guide
With tightening AML requirements, nominee service providers and their clients are forced to implement robust compliance procedures. This practical guide focuses on KYC/CDD/EDD and UBO identification, explaining the steps necessary to manage risks and meet regulatory requirements.
Know Your Customer / Customer Due Diligence / Enhanced Due Diligence: identification of the Ultimate Beneficial Owner
From the Anti‑Money Laundering (AML) compliance perspective, a nominee is a risk‑enhancing factor, meaning an increased level of scrutiny is required. KYC / CDD procedures for nominees include identity verification, source of funds and source of wealth checks, confirmation of professional background, and independent reference letters. Apply Enhanced Due Diligence (EDD) for nominal holders if there are offshore elements, complex chains or politically exposed persons (PEP screening).
AML requirements for nominee services
To comply with AML for nominee service, formalize: a nominee agreement, a powers matrix, an instructions policy, a reporting regime, and control measures. FIU reporting and SARs (suspicious activity reports) should be integrated into both the provider’s and the company’s procedures, with escalation thresholds and training for responsible staff. The COREDO team implements record‑keeping obligations and statutory registers as living documents: instruction protocols, a powers of attorney issuance log, a shareholder register and a UBO register synchronized with the jurisdiction’s registers.
Reducing false positives in AML software
A modern compliance ecosystem is not a set of disjointed tools. We integrate KYC, sanctions screening and transaction monitoring into a single platform to avoid data fragmentation and interpretation errors. Real‑time monitoring of sanctions and media risks, transaction patterns, alerting and subsequent incident investigations are combined and documented in case management.
False positives are inevitable, but their ratio is an important KPI. Optimizing screening rules, contextual lists and regular scenario calibration help reduce “noise”. COREDO’s practice shows that a risk‑based approach, combined with regular model testing (model validation), shortens the onboarding cycle without compromising control quality.
Tax aspects of economic substance
The concept of Economic substance today serves as a measure of genuine business activity and directly affects the tax aspects of companies operating in international jurisdictions. In the following points we will examine in detail what substance requirements are imposed on companies with nominees and what consequences their non-compliance entails.
Substance for companies with nominees
Tax mobility and the place of tax residency depend on where key decisions are made and where value is created. When a nominee director signs but the real management is abroad, this is a risk of reclassification. Formalize “reasonable measures” to prevent discrepancies: technological meeting logs, geotags, local contracts and evidence of available resources.
Tax risks of using a nominee service
Tax risks of nominee service include requalification of beneficial ownership and disputes over the applicability of double tax treaties. How to prove the absence of control by a nominee shareholder? Through a nominee agreement, custodial holding of share certificates, confirmation of lack of dividend interest and documented instructions from the UBO. The tax consequences of transferring shares to a nominee in EU countries require an assessment of dividend withholding, rules on counterparties with significant participation and anti‑abuse provisions.
Contractual guarantees
Contractual guarantees and legal instruments are necessary to minimize risks when transferring rights and managing corporate assets. Below we will move on to practical schemes and drafting features, including the nominee agreement and best practices within EU law.
Best practices for a nominee agreement in the EU
A nominee agreement template should include an obligation to fully disclose the UBO to regulators and banks if required by law. For the beneficiary it is important to have the right to immediate replacement of the nominee in case of breach of AML‑policies, and for the provider – the right to suspend execution of instructions upon sanctions and AML triggers. Such symmetric mechanisms reduce the systemic risk for both parties.
Escrow and powers of attorney: the digital trail
Blockchain notarization and using blockchain to store records of nominee agreements is a workable option to ensure immutability of records, especially in cross‑border disputes. Smart contracts for automating nominee terms remain a niche tool, but we already see cases where smart escrow records the occurrence of conditions for transfer of control or dividends.
Sanctions and criminal risks
The legal consequences of hiding the UBO in 2026 are only intensifying: regulators actively exchange data, and banks fine for false declarations. At COREDO we include in contracts an obligation of immediate notification of sanctions events and a trigger for restructuring with the involvement of an external sanctions adviser.
Operational scenarios: from account to M&A
Operational scenarios cover a wide range of tasks: from managing a bank account to supporting M&A, and require coordinated processes, automation and strict risk controls. Below we consider bank KYC and cross-border governance as key elements of compliance and operational resilience.
Bank KYC: cross-border governance
Interaction with bank KYC during account opening is the most sensitive stage. The bank will request a full package: nominee agreement, appointment minutes, UBO confirmations, source of funds and substance arguments. Our experience at COREDO has shown that early engagement with the bank and providing a transparent structure map increase the likelihood of opening an account in the Czech Republic, Estonia, the United Kingdom and Singapore.
Cross-border corporate governance and corporate law require consistency: where statutory registers are kept, how nominees are appointed and removed, and which law applies to the shareholders’ agreement. Inconsistency creates delays and red flags with banks and regulators.
M&A, public deals, alternatives to nominee
Legal risks from using a nominee in M&A transactions are related to representations and warranties (W&I), disclosure of the ultimate owner and synchronization of voting and dividend rights. Rules for disclosing the ultimate owner in public transactions are stricter and often incompatible with anonymizing structures. We incorporate into the SPA mechanisms for phased UBO disclosure and escrow unwind upon confirmation of control.
Alternatives to nominee service – trust, corporate secretary, agency agreements with limited functions. Sometimes it is more sensible to split roles: the secretary maintains the registers, the agent: narrow functions, and the director: only operational signatures. Such modularity reduces concentration of risk in a single person.
Digital Identification Technologies
Modern digital identification technologies are reshaping methods of identity verification and access management, combining user convenience with security and compliance requirements. Below we will examine in detail the key elements of this ecosystem – e‑KYC, the eIDAS regulations and remote onboarding practices: to understand their significance for businesses and customers.
eKYC, eIDAS and remote onboarding
Digital identification and e‑KYC capabilities for nominees radically accelerate processes. eIDAS and qualified e‑signatures make it possible to conduct board decisions and sign nominee agreements remotely with strong evidentiary weight. Remote onboarding and biometric verification shorten onboarding timelines while maintaining reliability and creating a clear digital trail.
Contract Storage and Smart Contracts
Using blockchain to store records of nominee agreements provides immutability and verifiability. Smart contracts automate conditions for the transfer of rights, execution of instructions, or payment of fees tied to KPIs. While such solutions do not replace a legal contract, they create a strong audit trail and reduce operational errors.
Data retention policies establish retention periods and access controls. Data governance is not only a matter of security but also evidence of good faith in disputes and FIU audits.
How to choose a nominee service provider
При выборе провайдера nominee service важно сочетать проверку репутации и способность контролировать качество предоставляемых услуг. Раздел о due diligence и лицензировании подскажет, какие документы, проверки и стандарты должны быть на первом месте при сравнении кандидатов.
Provider due diligence
Как выбрать провайдера nominee service с минимальным риском? Проверьте Licensing провайдеров корпоративных услуг в соответствующей юрисдикции, репутацию, наличие PI insurance, независимый аудит AML‑процессов и состав комплаенс‑команды. Контроль качества провайдеров – due diligence checklist: KYC‑процедуры, санкционный скрининг, training‑планы, case management, incident response, GDPR‑политики и отчётность в FIU.
Service economics: fee structure, ROI and TCO
Коммерческая модель nominee: прозрачная fee structure, привязанная к обязанностям и SLA, плюс success‑fees за сложные кейсы (например, лицензирование). Оценивайте TCO (total cost of ownership) nominee решений: базовые гонорары, расходы на AML‑ПО, аудит, юридические апдейты, резерв на кризисное управление. ROI – это не только экономия времени, но и снижение вероятности задержек с банком и штрафов регулятора.
Метрики эффективности: время онбординга, заполненность dossier по UBO, доля отклонённых банковских заявок, время реакции на санкционные алерты. Управление репутационным риском и KPI кризисного менеджмента, подготовленные пресс‑брифы, контактные лица, таймлайн эскалации и сценарии замены номинала.
COREDO Case Studies
In one of the projects in Estonia, the client was launching a licensed virtual assets provider and insisted on a nominee director until the permanent one was approved. We carried out Enhanced Due Diligence (EDD) for the nominee, integrated e‑KYC, prepared a nominee agreement with clear limits and document escrow. The bank in Tallinn requested an additional audit trail: the solution developed at COREDO provided synchronization of instructions with board meetings and AML‑platform logs, and the account was opened without delays.
Third example: a holding in Dubai with operations in the EU and the UK. The sanctions landscape was changing, and the client feared payment blocks. The COREDO team implemented real‑time sanctions monitoring, updated KYC for nominees, implemented conflict of interest rules and approved crisis scenarios. When one of the counterparties was added to extended lists, an alert fired within an hour, and we timely filed the SAR notification and restructured the payment flow.
Scaling nominee services across jurisdictions
Scaling a business using nominee services in multiple jurisdictions requires a compliance matrix: UBO registers in the EU and international registries, local AML rules, substance and banking practices. Management of conflicts of interest between the beneficiary and the nominee is formalized through a code of conduct, independent compliance and regular reports to the board.
Information exchange between jurisdictions and ML/TF risks increase as the network of companies grows. Integrating KYC, sanctions and transaction monitoring into a single platform accelerates data consolidation and provides an end-to-end audit trail. The impact of CRS and FATCA on nominee structures in multi-tiered schemes requires a risk map, which we update in line with OECD and EU releases.
How to safely launch a nominee service
- Need assessment. Determine whether a nominee is truly necessary, or whether alternatives will suffice: a corporate secretary, an agency agreement, a trust for specific assets.
- Structuring. Describe the corporate structure, control boundaries, substance and tax residency.
- Provider selection. Conduct due diligence on the provider, check licenses, AML processes, PI insurance and reporting.
- Documentation. Prepare a nominee agreement, an authority matrix, POA, escrow mechanics, an instructions policy and a conflicts of interest policy.
- AML/KYC. Implement CDD/EDD, UBO identification, PEP screening, sanctions compliance, FIU/SAR procedures and record‑keeping obligations.
- Banks. Agree with the bank in advance the document package, substance arguments and UBO disclosure.
- Technology. Set up an integrated AML platform, e‑KYC, e‑signatures, case management and performance metrics.
- Monitoring. Introduce KPIs, regular reviews of UBO registers, contract reviews and updates based on regulator responses in 2024–2026.
- Crisis plan. Provide for replacement of the nominee, sanctions scenarios, communications and legal support for the nominee service.
- Audit. Conduct periodic independent audits and forensic accounting where there are signs of irregularities or at the request of the bank/regulator.
Conclusions
Nominee service: it is a corporate governance tool, not a way to hide the beneficial owner. Its effectiveness in 2026 is measured by transparency, the quality of AML/KYC, economic substance and readiness for cross-border data exchange under CRS, FATCA and new digital standards. When nominee services for companies are structured according to best practices, they accelerate scaling, protect operational processes and reduce friction in banking and regulatory interactions.
At COREDO I see the task not as “finding a nominee”, but as building a resilient architecture: legal documents, a verifiable economic reality, a digital footprint and a unified compliance platform. Our experience confirms: thoughtful transparency and discipline in the details are the best strategy against regulatory uncertainty and unexpected inspections. If you are planning a structure involving a nominee director or nominee shareholder in the EU, the United Kingdom, Singapore, Dubai, the Czech Republic, Slovakia, Cyprus or Estonia, incorporate the 2026 requirements today — you will save time, lower TCO and strengthen the trust of banks and partners.