Lawyer, Family Office
Trustee
A trustee is an essential tool for ensuring confidentiality and compliance in international projects. In situations where disclosure of actual project stakeholders may create risks for implementation, appointment of a trustee or beneficiary becomes a strategic decision.
Core functions of a trustee
- exemption from CFC reporting
- ensuring confidentiality of asset ownership
- protection of assets from potential risks and encroachments
- passing KYC procedures, source of wealth (SoW) and source of funds (SoF) checks
Application
Tax optimization
Tax residents of certain countries face aggressive tax policy when owning significant wealth and foreign assets.
To minimize risks we use nominee ownership through a trustee, which allows structuring assets with tax efficiency in mind and ensuring confidentiality of the real beneficiary, especially in jurisdictions with high tax rates.
N.B:In most jurisdictions legislation requires CFC reporting even when using nominee ownership. To create a second level of protection we recommend obtaining a tax ruling and entering into fixed tax agreements
Asset protection
International practice in recent years demonstrates that investors and entrepreneurs increasingly face risks of forced expropriation for political reasons.
Our legal practice includes more than 20 cases where clients were subjected to pressure from regulators:
To minimize risks we use trusted persons and structure ownership through beneficiaries with "neutral" or "friendly" citizenship, which ensures asset preservation and resilience to political risks.
Financial licenses (funds, banks, management companies)
In the current business environment a presentable "front" becomes a key requisite for project success. European management and shareholders accelerate license acquisition, bank account opening and minimize regulatory risks, especially in jurisdictions with strict local presence requirements — Switzerland, United Kingdom and Singapore.
Citizenship and background of company owners significantly affect financial license acquisition. For example, Revolut still has not obtained a full banking license despite Nikolay Storonsky renouncing citizenship from a sanctions-sensitive jurisdiction in 2022.
Meanwhile Kroo bank with British ownership structure obtained a license in just two years.
Another reason for partnership with trustees is economic substance requirements. Most jurisdictions establish the need for local representation to obtain and maintain financial licenses.
Financial hubs apply the strictest requirements:
- Swiss asset management companies must have not only resident directors but also qualified local personnel with proven work experience
- Singapore regulator MAS requires minimum two resident directors, physical office and local team for funds and fintech licenses.
- Luxembourg companies with AIFM (Alternative Investment Fund Manager) license must have at least three highly qualified employees in the country and prove that key decisions are made on Luxembourg territory.
- Hong Kong neobank licenses and SFC licenses require local employees and responsible persons with relevant financial experience.
- UK gambling licenses and FCA licenses require resident directors and compliance specialists ensuring regulatory compliance.
In each of the described cases a local trustee becomes a necessary business requisite.
Trustee arrangements
Private.law offers four formats of trustee arrangements, each suitable for different situations and requirements:
1. European retiree
Ideal for simple structures not requiring active management. This option represents an optimal solution for clients requiring nominee service without the need to pass strict compliance checks at financial institutions.
This option is especially effective for companies with low operational activity or in early development stage. A trustee at this level performs basic administrative functions, signs necessary documents and appears in public registries, ensuring necessary level of confidentiality.
2. Professional manager
Suitable for operating business structures requiring economic substance. This option represents an optimal solution for companies needing to build convincing economic justification for their activities in a particular jurisdiction.
This option is especially effective for companies seeking to meet "substance over form" requirements and needing qualified management. A professional manager ensures not only formal presence but also demonstrates real understanding of company operations and management.
A trustee at this level can pass enhanced due diligence at financial institutions and effectively interact with counterparties and regulators due to professional experience and education.
3. English solicitor/barrister
Ideal for funds and structures requiring high level of professional qualification. This option represents a premium solution for projects with heightened requirements for legal expertise and impeccable management reputation.
- Profile: UK citizen, age 35, member of British legal community
- Education: Legal education at prestigious universities (Oxford, Cambridge, LSE)
- Status: Practicing solicitor/barrister with professional publications
- Application: Fund management, complex corporate structures requiring qualified board of directors
This option is especially effective for structures subject to enhanced regulatory supervision or operating in markets with high transparency requirements. An English solicitor or barrister ensures overcompliance and successfully passes comprehensive checks at financial institutions.
A trustee at this level not only formally meets requirements but can also "mirror" qualified decisions, speak at professional events and interact with regulators, creating an additional level of protection for the real beneficiary.
4. Nominee beneficiary
Elite solution for exceptionally complex scenarios of capital protection and overcoming regulatory barriers. This exclusive service is designed for owners of significant capital facing heightened regulator attention or difficulties in international legitimization of wealth sources while complying with global transparency standards.
- Profile: US citizen with prestigious education (financial management, University of California Berkeley), Forbes mentions, participant in international economic forums (Davos, Milken Institute Global Conference)
- Diversified portfolio $100m in EU and Switzerland with PWC audit
- Reputation: Impeccable business history with no political affiliation, angel investments and PitchBook profile
- Financial status: Banking relationships with Swiss banks for 5+ years
- Access to international financial instruments
- Application: Projects requiring public and impeccable capital origin when direct disclosure of ownership structure is impossible
This solution represents the highest level of asset protection and confidentiality when conventional corporate structuring tools are ineffective due to regulatory restrictions or geopolitical risks.
Integration of a nominee beneficiary creates a full-fledged legitimate ownership structure capable of both avoiding and passing any enhanced due diligence procedures even in strategic sectors (telecommunications, energy, defense industry).
Legal documentation and guarantees
To ensure client security and control over assets we use a comprehensive approach to documenting relationships:
Documentation
| Trust Declaration | The principal document establishing actual beneficial ownership. It confirms that the trustee acts in the interest of the beneficiary, recognizing the beneficiary as the true owner of the assets. | Protection: legally obligates the trustee to observe the beneficiary's interests and confirms that the assets do not belong to the trustee in the event of the trustee's bankruptcy or other difficulties. |
|---|---|---|
| Optional buy-back agreement with notarial certification and minimum exercise price | Grants the beneficiary an unconditional right to buy back the assets from the trustee at any time. | Protection: provides a mechanism for regaining control over the assets even if the nominal owner refuses to cooperate. |
| General power of attorney with right of substitution, certified by apostille | Grants the beneficiary or an authorized person broad powers to manage the assets on behalf of the nominal owner. | Protection: enables prompt execution of necessary actions with assets without the participation of the nominee. |
| Retroactive Resolution for lawful change of manager | A legally executed document that allows retroactive approval of necessary corporate decisions in compliance with all legal formalities. | Protection: provides a legal mechanism for changing a nominee director or adopting important corporate decisions in full compliance with corporate law requirements. Particularly effective in situations requiring urgent restructuring or where misconduct by the nominee is suspected. |
Technical control instruments
| Separation of access | A technology of distributed control over financial assets. The manager does not have full access to bank accounts and assets, which precludes unauthorized transactions. | Protection: requires the participation of at least two parties to execute significant financial transactions, minimizing the risk of abuse by the nominee. |
|---|---|---|
| Two-factor authentication with a physical token held by the actual beneficiary | A security system requiring transaction confirmation via a dedicated device accessible only to the actual asset owner. | Protection: even if passwords or other digital credentials are compromised, asset management access is impossible without the physical token. |
| Special authorization protocols for transactions above a set threshold | A multi-tier approval system requiring additional confirmation for transactions exceeding a predetermined amount. | Protection: prevents large unauthorized transactions by ensuring automatic notification and requiring explicit beneficiary approval. |
| Contact isolation | A system in which the nominee has no information about the actual asset owners. All communications pass through the law firm, providing an additional layer of confidentiality. | Protection: in the event of external pressure or investigation, the nominee physically cannot disclose beneficiary information because they do not possess it. |
Financial guarantees
| Personal guarantee by the trustee covering the full value of the assets | Includes a notarized consent to the trustee's property liability and their obligation to compensate any potential damage in full. | Protection: in the event of a breach of trust terms, an automatic compensation mechanism is activated through enforcement against the trustee's personal property. |
|---|---|---|
| Professional indemnity insurance for the trustee | Through global insurance companies (Lloyd's of London, AIG, Allianz) with coverage up to €5 million. The policy provides compensation for damage in the event of unintentional errors, negligence, or breach of fiduciary duties. | Protection: provides an additional financial buffer and guarantee of reimbursement for potential losses from professional errors by the nominee. |
| Weekly reporting and monitoring of all trustee actions | Through a secure audit system with blockchain verification. Includes automatic notification of any transactions in real time and regular detailed reports. | Protection: proactively ensures full transparency of operations and timely identification of any potentially problematic situations. |
Comparison table
| Retiree | Manager | Solicitor/Barrister | Nominee Beneficiary | |
|---|---|---|---|---|
| Cost (annual) | $15,000 ($8,000 six months) | $52,000 | $80,000 + % of transactions | from $50,000 + % of transactions |
| Legal protection | Basic | Basic | Maximum (insurance available) | Maximum (insurance available) |
| Technical control | Full | Full, participation in transactions | Full, participation in transactions | Full, participation in transactions |
| Financial guarantees | No | Yes | Yes | Yes |
| KYC/AML clearance | Basic | High | Maximum | Maximum |
| Available banks | Tier-2, neobank | Tier-2, neobank | Tier-1 | Tier 1, private banking |
| Confidentiality | Basic | Basic | Maximum | Basic |
| Protection from geopolitical risks | Minimal | Basic | Enhanced | Maximum |