The Role and Function of Nominee Director in Singapore
Singapore’s pro-business environment makes it an attractive destination for foreign businesses to start a company here. If you are foreigner planning to register a company in Singapore, then you would probably have done some research on the requirements and are aware of the need to appoint a minimum of one resident director for your company. According to the Accounting & Corporate Regulatory Authority (ACRA), a resident director must be ordinarily resident in Singapore with a local residential address and can either be a Singapore citizen, Permanent Resident, Employment Pass holder, or EntrePass holder.
If you belong to one of the categories mentioned above and are currently domiciled in Singapore, this would not pose a problem as you can appoint yourself as the resident director. However, what happens if you are living outside of Singapore and are unable to comply with the requirement of a resident director for your company? In such a situation, you can appoint a Nominee Director as the resident director.
What is a Nominee Director’s role?
The Singapore Companies Act defines a director as an individual “with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director.”
By definition, a Nominee Director is someone appointed to represent the interests of another person of group. A Nominee Director in Singapore has the same obligations and responsibilities as a regular resident director in line with the Companies Act and the common law.
Hence, while the Nominee Director’s primary role is to comply with the resident director requirement, he or she is still considered a director and has to act in the interests of the company that appointed him, in compliance with the law. As such, simply appointing an inexperienced Singapore resident to fill the position may not be a very prudent business decision.
Here are some important reasons to select a qualified and trustworthy individual for this role:
- He or she must have an acceptable level of knowledge and skills to handle the affairs of the company.
- He or she acts as a director-level representative to undertake financial paperwork, engagements with the local authorities on licence registrations, etc.
- He or she has a responsibility to perform his duties with honesty and integrity, without any conflict of interest.
- He or she must keep abreast of company tax and accounting updates and statutory obligations, and work with the company secretary to ensure that all required documentation is lodged with ACRA in a timely manner.
Why engage a Nominee Director from a professional services firm?
For a foreign entrepreneur, peace of mind is the number one reason. The Nominee Director Services at 3E Accounting, for instance, is provided by a team of reputable and trustworthy professionals, where the Nominee Director is a qualified accountant and local resident who is part of the 3E Accounting senior management. With the right capabilities and competence, he is able to help your company maintain a good standing and ensure full regulatory compliance. By providing our own director for our Nominee Director Services, you can be assured that we have the safety and perpetuity of our clients’ businesses at heart. Find out more here on how 3E Accounting is the solution to your Nominee Director needs.