Is a nominee shareholding (equity entrustment) agreement valid?
Nominee shareholding agreements are in principle valid under the Company Law, and the contractual relationship between the actual investor and the nominal shareholder is protected by law. That said, for a hidden shareholder to be registered as a shareholder of record, the consent of more than half of the other shareholders is required, and the arrangement may not be used to circumvent mandatory legal provisions — such as foreign investment restrictions or licensed-business qualifications.
