If you are a foreigner looking to start a business in Singapore, understanding the requirements for company registration can be challenging. One key requirement is the appointment of a resident director, which can be fulfilled through a nominee director. This guide will explain what a nominee director is, their roles and responsibilities, the eligibility criteria, and the process for appointing one.

What is a Nominee Director?

Under Singapore’s Companies Act, every company incorporated in Singapore must have at least one local resident director on its board at all times, including at the time of incorporation. A local resident director is defined as someone who physically resides in Singapore and has not been disqualified from holding a directorship.

A nominee director is a non-executive director appointed to fulfil the legal requirement of having a local resident director. Their role is primarily to provide a local presence for foreign-owned companies, ensuring compliance with local laws. Nominee directors do not involve themselves in the daily operations or decision-making processes of the company. Instead, they represent the appointing party without holding shares or taking on directorial responsibilities such as authorizing the incorporation, opening a company bank account, or voting at board meetings.

If you are setting up a company in Singapore but do not have a local resident director, appointing a nominee director is essential to complete the incorporation process.

Roles and Responsibilities of a Nominee Director

The roles and responsibilities of a nominee director in Singapore include:

1. Meeting Legal Requirements: The primary responsibility is to satisfy the legal requirement set by the Companies Act, which mandates at least one resident director for all registered companies.
2. Compliance: Ensuring the company complies with relevant laws, regulations, and corporate governance standards in Singapore. This includes filing annual returns, maintaining statutory registers, and adhering to tax obligations.
3. Fiduciary Responsibility: Representing the interests of the appointing party within the legal framework of Singapore. This involves maintaining confidentiality regarding company matters and sensitive information.

A nominee director acts as a local representative, facilitating the company’s smooth operation within Singapore’s regulatory framework while safeguarding the appointing party’s interests.

Eligibility Criteria for a Nominee Director

To qualify as a nominee director in Singapore, the individual must meet the following criteria:

• Be a Singapore Citizen, Permanent Resident, or hold an EntrePass work visa.
• Employment Pass (EP) visa holders can only be appointed as directors after the company has been incorporated and the corporate bank account opened. This requires the appropriate documents and approvals from the Ministry of Manpower, including a valid Letter of Consent (LOC).
• Be at least 18 years old and mentally competent to fulfill the duties and responsibilities of a director.
• Have no history of bankruptcy, disqualification, or criminal convictions that would disqualify them from holding a directorship.
• Be willing to act as a nominee director and represent the appointing party’s interests according to the law, without conflicts of interest.

The Process to Appoint a Nominee Director

Appointing a nominee director in Singapore involves several steps:

1. Identify a Suitable Nominee: Choose an individual who meets the eligibility criteria to act as a nominee director. Ensure they have a clean record and understand the role.
2. Agreement: Reach an agreement with the chosen nominee director regarding their appointment. This should include their responsibilities, remuneration (if any), and other relevant terms.
3. Documentation: Prepare the necessary documentation to formalise the appointment. This includes a director’s consent form, an indemnity agreement, and other required legal documents.
4. Submission to ACRA: Submit the relevant forms and documents to the Accounting and Corporate Regulatory Authority (ACRA) via the BizFile+ portal.
5. Payment of Fees: Pay any applicable fees for the appointment of the nominee director. Fees may vary depending on the service provider and the complexity of the process.

Once ACRA processes and approves the appointment, the nominee director will be officially appointed to the company’s board and can begin fulfilling their duties.

Conclusion

Appointing a nominee director is a crucial step in the company registration process in Singapore for foreign business owners. By fulfilling the requirement of having a resident director, a nominee director ensures that your company complies with Singapore’s legal framework. This allows you to focus on growing your business while meeting regulatory obligations. If you need assistance with appointing a nominee director or require corporate tax services, professional guidance can help ensure a smooth and compliant setup.