Nominee Director Agreement Template for the Philippines

A Nominee Director Agreement is a specialized legal contract that establishes the terms under which an individual agrees to serve as a director of a Philippine corporation on behalf of another party. This arrangement is particularly important in the Philippines due to strict foreign ownership restrictions in certain sectors and the need for local directors to meet regulatory requirements under the Revised Corporation Code.

When do you need this document?

You'll need a Nominee Director Agreement when establishing a Philippine corporation with foreign investment, particularly in sectors like telecommunications, retail trade, or real estate where nationality restrictions apply. Foreign investors often require nominee arrangements to comply with the 60% Filipino ownership requirement while maintaining operational control. The agreement is also essential when you need professional directors for corporate governance purposes, when existing directors cannot fulfill their duties due to conflicts of interest, or when restructuring ownership to meet regulatory compliance. Additionally, publicly listed companies may require nominee directors to satisfy independent director requirements under the Securities Regulation Code.

Key legal considerations

The agreement must carefully balance the nominee's legal duties as a director with the nominator's business interests while avoiding dummy arrangements prohibited under the Anti-Dummy Law. Key provisions should include clear definition of voting instructions, decision-making authority, and circumstances where the nominee can exercise independent judgment to fulfill fiduciary duties. The contract must address indemnification clauses to protect the nominee from personal liability when acting in good faith, while establishing appropriate compensation and expense reimbursement. Confidentiality provisions are crucial to protect sensitive business information, and the agreement should specify procedures for resignation, replacement, and transfer of directorship. The document must also address potential conflicts between the nominee's statutory duties under the Corporation Code and contractual obligations to the nominator.

Legal requirements in Philippines

Under the Revised Corporation Code, nominee directors must meet the same qualifications as regular directors, including Philippine residency requirements and professional competence standards. The agreement must comply with the Anti-Dummy Law by ensuring that nominees retain genuine decision-making authority and are not mere puppets of foreign principals. All director appointments require SEC registration and disclosure of beneficial ownership in accordance with the Securities Regulation Code for publicly listed companies. The Civil Code governs the contractual relationship, requiring clear terms regarding obligations, performance, and remedies for breach. Anti-Money Laundering Act compliance may require disclosure of the ultimate beneficial owners and the nature of the nominee arrangement. The agreement should also address corporate governance requirements, including attendance at board meetings, committee participation, and annual certification of independence where applicable.