Hong Kong companies must have at least one natural-person director. There is no residency requirement under the Companies Ordinance (Cap. 622).
A nominee director is still a director and owes full statutory duties. Private agreements do not remove those duties.
Beneficial ownership is recorded in the Significant Controllers Register (SCR) kept by the company; it is not public and is inspectable by law enforcement.
Director appointments or cessations must be filed on Form ND2A within 15 days.
A nominee director is one of the most discussed appointments for companies in Hong Kong. For companies set up in Hong Kong, the appointment of at least one director is mandatory. Many foreign investors value privacy around beneficial ownership.
- Form ND2A must be filed within 15 days of a director’s appointment or cessation.
- The Significant Controllers Register (SCR) is kept at the company’s registered office or a prescribed place; it is not public and is accessible only to law-enforcement officers.
- Penalties for late filings or SCR breaches can reach HK$25,000, plus HK$700 per day for continuing offences.
- A TCSP licence is required under the AMLO (Cap. 615) for anyone providing trust or company services in Hong Kong.
What Is a Nominee Director?
A nominee director is an individual formally appointed and filed as a director on behalf of the shareholder or beneficial owner. They act as the company’s official representative for limited, pre-agreed functions.
A nominee usually has no independent decision-making authority. Their role is administrative and compliance-focused, but they still owe full directors’ duties under the Companies Ordinance (Cap. 622).
Reasons for Appointing a Nominee Director in Hong Kong
- Privacy for beneficial owners via the SCR (not public).
- Practical representation when the owner cannot act as a director.
- Continuity of filings and routine corporate actions.
There is no legal requirement to appoint a Hong Kong resident or “local” director. Non-residents can serve as directors if at least one director is a natural person.
Responsibilities of a Nominee Director in Hong Kong
A nominee director in Hong Kong is expected to ensure that the company complies with all statutory requirements under the Companies Ordinance (Cap. 622), including timely annual filings and proper maintenance of corporate registers.
They must also make sure that any change in directorship is reported to the Companies Registry by filing Form ND2A within 15 days.
Internally, the nominee director is responsible for keeping key records up to date, such as the Significant Controllers Register and the Register of Directors.
In performing these duties, they are required to act in the best interests of the company and to exercise reasonable care, skill, and diligence.
Pros and Cons of Hiring a Nominee Director
Pros
- Satisfies the statutory requirement to appoint at least one natural-person director.
- Helps maintain the beneficial owner’s confidentiality through proper use of the Significant Controllers Register (SCR).
- Ensures continuity in corporate filings and day-to-day administrative matters.
Cons
- The nominee remains subject to all statutory directors’ duties and potential liabilities.
- Banks may impose enhanced KYC/AML checks where a nominee structure is used.
- Involves additional service fees and requires robust internal governance arrangements.
- Heightened risk if the nominee lacks experience or fails to comply with legal and regulatory obligations.
What You Need Before Appointing a Nominee Director in Hong Kong
Before appointing a nominee director for a Hong Kong company, several documents and governance measures must be in place to ensure legal compliance, protect the company, and properly manage the nominee relationship.
1. Nominee Director Services Agreement
A formal agreement defining the nominee’s role, authority limits, confidentiality obligations, fees, reporting requirements, indemnity, and termination procedures.
2. Letter of Indemnity
Provides protection to the nominee director for acts carried out within the agreed scope and in accordance with the law.
3. Undated Resignation Letter
Held by the company to allow prompt termination of the nominee’s appointment when required, subject to the Companies Ordinance and the terms of the services agreement.
4. Limited Power of Attorney
If used, it should be strictly limited to specific administrative acts so that it does not conflict with the nominee director’s fiduciary duties.
The power of attorney should never replace or override directors’ statutory responsibilities.
5. Board Resolution and Consent to Act
A formal board resolution approving the appointment and a signed “Consent to Act as Director,” as required under the Companies Ordinance (Cap. 622).
6. Significant Controllers Register (SCR) and Designated Representative
Ensure that the SCR is updated immediately after the appointment and that a designated representative is appointed in accordance with statutory requirements.
Any document suggesting that a director must follow a beneficial owner’s instructions or act contrary to the company’s interests is unenforceable and contrary to Hong Kong law.
A director’s duties cannot be fettered by contract or arrangement.
How to Appoint a Nominee Director in Hong Kong
If you're setting up a company in Hong Kong and need a nominee director, there’s a simple process to follow.
This helps keep things legal while ensuring you still have full control over your business.
Here’s how it works:
Step 1: Prepare Internal Approvals
Pass a board resolution approving the appointment and obtain the nominee director’s formal Consent to Act.
Update internal records as required by your articles and corporate governance procedures.
Step 2: Execute the Nominee Director Services Agreement
Sign a services agreement defining:
- Scope of authority and any limitations
- Confidentiality obligations
- Compliance with directors’ duties under Hong Kong law
- Indemnity arrangements
- Service fees
- Procedures for termination and document handling (e.g., undated resignation letter)
Step 3: File the Statutory Return (Form ND2A)
File Form ND2A with the Companies Registry within 15 days after the appointment.
The director’s appointment is effective under company procedures—filing is a statutory notification, not an approval process.
Step 4: Update the Register of Directors and SCR
Enter the nominee director’s particulars in the Register of Directors.
Update the Significant Controllers Register (SCR) to ensure accuracy, including details of the company’s designated representative if applicable.
Bank Account Opening with Nominee Structure
Hong Kong banks follow HKMA guidance to apply a risk-based approach. A nominee setup can be accepted where you provide:
- Clear ownership chart and compliant SCR.
- Proof of source of funds and business rationale.
- Evidence of substance, contracts, or expected flows.
- Full disclosure of the nominee arrangement and related documents.
Some banks may impose conditions or decline based on their risk appetite, but there is no blanket HKMA rule to refuse nominee structures.
Legal Compliance and Regulatory Considerations
Anti-Money Laundering and Know Your Customer Requirements
Nominee service providers must perform due diligence under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO, Cap. 615).
Expect verification of identities, source of funds, and ongoing monitoring consistent with a risk-based approach.
Regulatory Transparency
Public filings show the appointed directors’ names.
Beneficial ownership is recorded in the SCR kept by the company and is available to law enforcement on demand.
Annual returns and other filings continue as usual.
Consequences of Misuse
Using nominee arrangements for unlawful purposes (e.g., tax evasion, money laundering, fraud) can lead to criminal liability, heavy penalties, and imprisonment under Hong Kong law.
Shadow Directors vs. Nominee Directors
Shadow Director
A shadow director is a person whose instructions or directions the board is accustomed to follow, even though they are not formally appointed.
Under the Companies Ordinance (Cap. 622), shadow directors may incur director-like duties and liabilities.
Nominee Director
A nominee director is formally appointed, entered in the Register of Directors, and filed with the Companies Registry.
Regardless of any private arrangement, a nominee director owes the full statutory and fiduciary duties of a director and must exercise independent judgment.
What Does a Hong Kong Nominee Director Agreement Include?
Core Agreement Clauses
- Scope of authority and limitations
- Confidentiality and data-handling
- Indemnity for actions taken within the agreed scope
- Fees and billing terms
- Termination provisions, including holding an undated resignation letter
Supporting Documentation
- Letter of Indemnity in favour of the nominee
- Power of Attorney with narrow, clearly defined limits (optional)
- Board resolutions approving the appointment and authorising specific acts
Risk Management and Safeguards
- Two-signatory rules for material actions
- Clear signing authority matrix and proper minute-keeping
- Timely filing of Form ND2A and up-to-date SCR
- Engagement of a licensed provider (TCSP licence required under AMLO, Cap. 615)
Need a Hong Kong resident director service?
Air Corporate can coordinate a compliant nominee director arrangement via licensed partners, prepare your board pack, handle ND2A filing, and update your SCR to meet bank and regulatory expectations.
FAQs
A nominee director is still a director and must exercise independent judgment and comply with directors’ duties. Private agreements can limit routine authority, but they cannot remove statutory duties or require the director to act against the company’s interests.
Fees are typically charged annually and vary by provider, scope (e.g., banking signatory, meeting attendance), and risk profile. Some firms also require a security deposit.
Hong Kong requires at least one natural-person director, but there is no residency requirement for directors. By contrast, the company secretary must be a Hong Kong resident (if an individual) or a Hong Kong body corporate.
