How to Find a Reliable Nominee Director in Turkey?

When establishing a company, utilizing services of a nominee director in Turkey can offer several advantages, including confidentiality and ease of compliance with local regulations.

The process begins with the appointment of a nominee director, typically through a legally binding agreement signed before a Notary Public. While the nominee director assumes the role of a company director, their responsibilities are often limited to legal compliance matters.

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This arrangement allows the actual owner of the company to maintain anonymity and focus on strategic decision-making, while ensuring that the company operates in accordance with Turkish laws and regulations.

It is important for businesses considering nominee director services in Turkey to seek professional advice to ensure compliance and minimize legal risks.

Nominee Director Services in Turkey: Definition, Process, and Responsibilities

In the context of business operations in Turkey, the concept of a nominee director plays a crucial role, especially for foreign investors looking to establish or manage a company in the country. Understanding what a nominee director is, how the process works, and their responsibilities is essential for navigating the Turkish business landscape effectively.

What is a Nominee Director in Turkey?

A nominee director in Turkey is an individual appointed to act as a company director on behalf of another person or entity. This arrangement is common in situations where the actual owner of the company prefers to remain anonymous or for legal compliance reasons.

How is Nominee Directorship Established in Turkey?

The process of appointing a nominee director in Turkey typically involves legal documentation and agreements. The nominee director is appointed by the company’s shareholders or the actual beneficial owner through a power of attorney or similar legal instrument.

Responsibilities of a Nominee Director in Turkey

While the nominee director acts as a company director, they do not usually have the authority to make significant decisions or manage the company’s day-to-day operations. Instead, their role is limited to fulfilling legal obligations, attending meetings, and representing the company in official matters.

Compliance with Turkish Laws and Regulations

It is crucial for companies utilizing nominee director services in Turkey to ensure compliance with local laws and regulations. This includes maintaining accurate records, submitting required documents to relevant authorities, and adhering to corporate governance standards.

In summary, nominee director services in Turkey provide a practical solution for companies seeking to maintain anonymity or ensure compliance with local regulations. Understanding the definition, process, and responsibilities associated with nominee directorship is essential for businesses operating in Turkey’s dynamic business environment.

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 which 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

For businesses seeking reliable nominee director services in Turkey, Finlexia Accounting Firm offers comprehensive solutions tailored to meet your specific needs. Our team of Turkish accountants ensures seamless compliance with Turkish laws and regulations, allowing you to focus on your core business activities with confidence.

Contact us today to learn more about how our nominee director services can benefit your company’s operations in Turkey. You may reach us to find a nominee director in Turkey through our Contact page.