A nominee director is appointed to a board, signs what directors sign, and does what someone else tells them. A nominee shareholder holds shares in their own name for someone else’s benefit. Both arrangements are lawful in many jurisdictions and both are ordinary products of the corporate services industry, used for privacy, for administrative convenience and for perfectly mundane commercial reasons.
They become a concealment technique when the nominee is the only name that anyone outside the arrangement ever sees.
How it works
The nominee’s role is documented in a private instrument — a declaration of trust, a nominee agreement, or a side letter — under which the nominee acknowledges holding the position for another party and undertakes to act only on that party’s instruction. That document is not filed anywhere. The public record shows an ordinary director or shareholder.
The FATF and Egmont Group study lists both formal nominee shareholders and directors where the identity of the nominator is undisclosed1 and informal nominees such as close associates and family2 among the mechanisms that enable concealment, alongside the unrestricted use of legal persons as directors3 . Its overall finding is that concealment usually relies on a combination of direct and indirect control4 rather than nominees alone. FATF and Egmont’s trade indicators put the operational version plainly: owners or senior managers who appear to be nominees acting to conceal the actual beneficial owners, because they lack management experience, lack knowledge of transaction details, or manage multiple companies5 . A typical structure uses nominees at the visible layer, where a name must be supplied to a registry or a bank, and shell companies above it, where no natural person need be named at all.
Where a jurisdiction has moved to close this, it has done so in one of three ways: by requiring nominees to be declared as such, by requiring the underlying party to be registered as the beneficial owner regardless of the nominee arrangement, or by licensing the professionals who supply nominees and holding them to record-keeping obligations. The effect of each reform is visible in the data, because structures migrate.
The professional nominee
The distinguishing feature of the professional nominee is volume. An individual who directs a company does the work of directing it. An individual named as director of four hundred companies across unrelated sectors and continents is performing an administrative function, and that is visible in any bulk extract of a company register.
This is one of the few areas where open data has changed investigative practice outright. Where a register is published in bulk, counting directorships per person is trivial, and the resulting distribution has a long tail that is not explicable by ordinary business.
Why it matters for sanctions specifically
Sanctions screening works on names. A nominee arrangement supplies a name that is real, verifiable, has a clean record and is not on any list. It defeats screening without any forgery at all, because nothing in the arrangement is false — the nominee genuinely is the director.
This is also why the “owned or controlled” formulation used in UK and EU sanctions law does different work from the US ownership threshold. A nominee structure can leave a designated person owning nothing while controlling everything, which the ownership arithmetic does not capture and the control test does.
How it is caught
The nominee is usually the point at which a concealed structure becomes findable, because the nominee is a real person with a real footprint. Investigators work outward from them: the other companies they are named in, the address they are served at, the agent who appointed them, and the pattern of appointments and resignations.
Enforcement narratives frequently turn on the instruction trail rather than on the appointment. The nominee has to be told what to do, and those instructions exist somewhere — in email, in messaging platforms, in the files of the corporate services provider that arranged the appointment. Where investigators have obtained a service provider’s client files, the declarations of trust have generally been in them.