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Offshore Account Signatory Services

What are Offshore Account Signatory Services?

Put simply, account signatory services refer to the nomination a third-party professional who is vested with the authority to act as signatory on a bank or brokerage account and who is independent from both he company owner(s) as well as the manager(s) and those hired to operate the business.

For some people, our recommendation for ultimate asset protection and tax efficiency is that, with any structure you cause to be set up, you not designate yourself as manager, beneficiary, stockholder, officer or trustee – in other words, it must be totally at "arms length" from you.

However, banks always want to know who the true beneficiary owner is of the company, so it is not possible to be totally anonymous as our law firm has never provided fake beneficial owners (i.e. nominees) for banking purposes as that would violate our relationship with the bank and could even be considered a criminal act. Also none of our nominees who will act as directors wish to take on the liability of being the legal owner of the company.

Therefore this service is often more useful these days to a foreign investor who wants to invest in a new business in another country, but does not want to deal with the day-to-day running of the company and its accounts. Or perhaps the business owner is running for or holding some public office where there is desire to avoid any appearance of a "conflict of interest" or other complications of being considered a "politically exposed person".

In these instances the assumption also is that the investor does not want to put his appointed manager or other personnel charged with the running of the company operations in charge of the accounts.  In this situation our firm can act as a trusted third party that can retain control of the accounts on behalf of the beneficial owner, and thereby act as a check and balance to those appointees that operate the company on behalf of the foreign owner.

Many people, however, are reluctant to allow a third party to have signatory authority, for fear that it will be abused in some way, either by the signatory absconding with the assets or by the signatory blackmailing the beneficiary of the assets with threats of revealing this information to that person's tax authority.

Under Panama's business confidentiality laws, this type of abuse is a serious offense, punishable by jail sentences, which itself provides a significant deterrent. Additionally, law firms are regulated and individual lawyers are licensed, so the risk of losing a license, and therefore one’s livelihood, would also be an additional incentive.

For a company or other entity to qualify for signatory control by an officer or other closely supervised employee, however, it is necessary for there to be substantial involvement in the business of the company and its business operations, so that there is total familiarity with the business and its sources of income.

The "know your customer" rule, of course, applies to all who wish to open a bank account in a privacy-oriented jurisdiction. For a professionally managed entity provided with such signatory services, this rule will be applied more rigorously.

Advantages of Account Signatory Services for your IBC

This option can provide you with maximum asset protection on all fronts as well as tax efficiency, depending on your jurisdiction of residence and whether or not foreign business income is reportable in your home jurisdiction if it has not been repatriated to there.

In addition to the benefits offered by the appointment of nominee directors to the Company Board, you get true arms length management of your structures, including any bank or brokerage accounts. Or you want to appoint your own directors but do not wish to operate and manage the company's business on a day-to-day basis but wish to retain some control as the ultimate beneficial owner, so that those that are running your business have to submit their payment requests and reference details concerning the payment (i.e. invoice number, reason for payment etc.) to our professional signatory manager.

This will:

  • Give you peace of mind knowing that you have engaged a third party manager to act as account signatory only answerable to you, and that your business accounts are not exposed to a disgruntled employee for instance

  • Prevent conflict of interest problems in your home jurisdiction if you are a political appointee

  • Provide you with the needed extra element of removal from your assets if needed, so that your official legal capacity is one of a "behind the scenes advisor" only. You neither own nor "control" the assets in any function. However, in order not to be named as a beneficiary in any way you would then need to appoint your own, which could be another family member for instance.

Please see International Fiduciary Structure for further information on how we recommend setting up the ultimate “bullet-proof” fully-managed foundation and company structures.

Why Choose Sovereign for Account Signatory Services?

For Sovereign's law firm, the Account Signatory service is one of our core competencies. Since corporate administration and corporate law is our specialty, a big part of that includes the detailed work of executing transactions.

Sovereign also provides this service for considerably less than what other law firms charge. Our price for this service is only a base annual fee of $1,000 plus a 0.75% tariff charged one time on funds paid into the structure(s) being managed.

We undertake to have your transactions completed just as expediently as if you had transacted them directly with the bank. Online access is granted to any accounts being managed so that you can monitor the status of incoming or outgoing transactions at any time.

While some other law firms can provide you with this service (of the ones that would not abuse this trust), our experience has been that these service offerings tend to be more expensive and instructions can take longer to get executed.

Most law firms have to be more diverse and thus have a myriad of client needs to manage. Often these law firms have to be in court or out of their office working on behalf of one client or another. For these firms, this type of transaction-oriented management services can be more of a nuisance than anything else.

To set up a non-controlled foreign company with Professional Management, including account signatory services click the link below.

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