A shareholder is a person (a private individual or a corporate body), in whose name the shares in a particular offshore company are registered. So, it basically is what the name suggests – the “holder” of shares. However, in respect to offshore companies, a distinction must be made between “holding” the shares and actually owning them. While the shareholder may hold shares in his own name, he may at the same time hold those shares on behalf of another person. This is what is called a “nominee shareholder”. In the case with nominee shareholder, the other person – who is, accordingly, the real owner of the shares – is called “the beneficial owner”. Effectively, then, a nominee shareholder acts as a “nameplate” for the beneficial owner, preventing general public from seeing who is the real owner of the IBC.
In the nominee shareholding relationship, the beneficial owner is the person who is the actual, de-facto owner of the shares. The beneficial owner is entitled to all gains, profits and benefits accruing to such shares. The nominee shareholder is entitled to nothing, except his professional fee. The beneficial owner would also be the one who decides on the eventual sale or transfer of shares. So, not all beneficial owners are shareholders and not all shareholders are beneficial owners.