It is the function of being and acting as the director of the Cyprus company. The names, addresses and nationalities of all directors of a Cyprus company must be registered with the Cyprus Registry of Companies. This information is publicly available. Also, the residence of the company director is one of the components by which the tax-residence of the company itself is being determined.
For these reasons it may often be undesirable for the owner of the Cyprus company to also be on the board of directors of the company. This may be particularly true for owners resident in highly-regulated high tax countries.
Directorship services are provided by licensed Company Administrators, such as ourselves, as an optional service. The individual directors would normally be fit and proper individuals, specifically vetted and approved by the government regulatory body – in our case, CySEC. The directorship service can also be provided by a dedicated corporate body.
There were times in the past when the director of a typical offshore company was only supposed to be a “nominee”, fully delegating all operational aspects of the business to the actual owner, and merely acting to rubber-stamp all the decisions taken elsewhere. At this time, such approach has become highly dangerous for the company owner and is generally considered unacceptable.
Being able to demostrate that the Cyprus company is professionally managed by a competent and independent director is extremely important, both for tax and regulatory compliance purposes. Of course, the actual composition of the board of directors and how it functions is quite dependent on the size and business model of the company.