Understanding a Nominee Director
A Nominee Director is a resident of Singapore, either a citizen or a permanent resident, appointed to act as the local director of a company.
According to the Companies Act (Chapter 50), every Singapore-incorporated company must have at least one resident director at all times. Hence, companies set up by foreigners who don’t live in Singapore must hire a nominee director to comply with these regulations. All companies are obligated to maintain a registry of nominee directors, documenting details such as their full name, residential address, passport or NRIC number, and appointment date.
If the nominee director is a service provider, the record should reflect the organization’s details, such as name, office location, Unique Entity Number (UEN), format, jurisdiction and statute under which it was formed, along with the appointment date. This registry is classified and only accessible to ACRA and public organizations including IRAS, the Singapore Police Force, and the Corrupt Practices Investigation Bureau, in addition to all supporting documents.
Who Can Be a Nominee Director in Singapore?
During the company’s incorporation process, only Singapore citizens, permanent residents, or EntrePass holders can be appointed as a nominee director. Once the company is established, it can also appoint an Employee Pass (EP) holder as a director.
What are the Roles and Responsibilities of a Nominee Director in Singapore?
The role of a nominee director in Singapore typically does not involve running the company’s day-to-day operations. Instead, they are responsible for ensuring the company complies annually, as they are considered officers of the company.
Their responsibilities usually exclude financial and operational aspects of the company, which executive directors manage.
Key Responsibilities Include:
- Ensuring Statutory Compliance
A nominee director in Singapore ensures the company complies with all applicable local regulations, particularly the provisions of the Singapore Companies Act. - ACRA Filings and Corporate Governance
The nominee director oversees the timely submission of annual returns, statutory updates, and other mandatory filings with the Accounting and Corporate Regulatory Authority (ACRA), ensuring the company remains compliant and in good standing. - Fulfilling Local Director Requirements
One of the key functions of a nominee director in Singapore is to serve as the company’s resident director, which is essential for company incorporation and continued operations, especially for foreign shareholders. - Signing of Official Company Documents
Where required by law, the nominee director may sign company resolutions, regulatory filings, and other official documents on behalf of the company. - Fiduciary and Ethical Duties
A nominee director in Singapore must act in the best interests of the company, avoid conflicts of interest, exercise due care, and maintain the strict confidentiality of company information. - Liaison with Singapore Authorities
The nominee director serves as a formal point of contact between the company and Singapore regulatory bodies, including ACRA, when official communication or clarification is required.
How to Appoint a Nominee Director in Singapore?
To appoint a Nominee Director in Singapore, foreign-owned companies must work with a licensed corporate service provider. The nominee director helps the company meet ACRA’s requirements.
Step 1: Understand the Legal Requirement
Every Singapore company must have at least one resident director who is a Singapore Citizen, Permanent Resident, or a valid EP or EntrePass holder. A nominee director in Singapore is commonly appointed when the owners or directors are not residents.
Step 2: Appoint a Nominee Through a Service Provider
A nominee director is appointed through a licensed corporate service provider, usually on a temporary or annual basis. This arrangement is flexible and can be discontinued once the company appoints an eligible Singapore-resident director, such as an EP holder or local employee.
Step 3: Sign Nominee Director Agreements
The company signs a Nominee Director Service Agreement that defines the nominee’s responsibilities, limits their authority, and sets out fees and termination terms. An indemnity agreement is typically included, as the nominee director is legally responsible under Singapore law.
Step 4: Submit Required Company Documents
The service provider collects standard company documents, including incorporation details, shareholder information, and the company constitution, to complete due diligence and regulatory checks.
Step 5: File the Appointment With ACRA
The nominee director’s appointment is filed with the Accounting and Corporate Regulatory Authority (ACRA) via the BizFile+ portal. From 2025, nominee director details must also be disclosed in ACRA’s central register of nominee directors to ensure transparency.
Step 6: Ongoing Compliance and Replacement
Once appointed, the nominee director signs required statutory documents and supports timely compliance filings. The nominee can be replaced at any time when the company appoints another eligible local director.
What are the Potential Risks of Appointing a Nominee Director in Singapore?
Nominee directors in singapore carry the same duties and liabilities as regular directors under the Companies Act; therefore, there are some real legal, financial, and reputational risks.
Legal and Compliance Risk
Nominee directors can face fines, legal action, or imprisonment for non-compliance by the company, including missed filings, tax breaches, or regulatory violations. ACRA may also question nominee directors during investigations.
Financial Exposur
Non-compliance can result in heavy penalties, and, in severe cases, a nominee director’s personal assets may be at risk if the company is involved in unlawful activities or becomes insolvent.
Reputational Impac
Any association with unethical or non-compliant businesses can damage both the company’s credibility and the nominee director’s professional standing.
Control and Governance Issue
Poorly defined roles or inexperienced nominees can cause delays and disputes, leading to operational and governance challenges.
Difference between Nominee Director & Regular Company Director & Nominee shareholder
When setting up a company in Singapore, it’s essential to understand the differences between regular directors, nominee directors, and nominee shareholders. Each plays a distinct role in management, compliance, and ownership.
- Regular Director in singapore
A regular director actively runs the company, makes day-to-day business decisions, and oversees operations. They have full legal and fiduciary responsibilities to the company and its shareholders, exercising independent judgment and management authority. - Nominee Director in Singapore
A nominee director is appointed to meet legal requirements, such as the mandatory local director rule. While they hold an official board position, their authority is limited; they act according to the instructions of the beneficial owner. - Nominee Shareholder:
A nominee shareholder holds company shares on behalf of the beneficial owner but does not have control or decision-making power. Acting as a trustee, they follow the owner’s instructions and maintain the confidentiality of ownership.
Key Difference: Directors focus on management, while nominee shareholders focus on ownership and privacy. Nominee roles provide legal compliance and confidentiality.
How to Replace or Remove a Nominee Director?
Replacing or removing a Nominee Director in Singapore is a simple process, but it must be done carefully to stay compliant with ACRA regulations. It involves appointing a new eligible director, updating legal agreements, and ensuring the company’s records are accurate.
Steps to Replace or Remove a Nominee Director:
- Appoint a New Director: Select a Singapore Citizen, Permanent Resident, or EP holder to meet statutory requirements.
- End the Existing Agreement: Terminate the nominee director’s service agreement according to its terms.
- Update ACRA Records: File the change via BizFile+ to keep the central register accurate.
- Smooth Handover: Ensure any pending filings or documents are completed by the outgoing nominee.
- Keep Documentation: Maintain records of all agreements and filings for legal protection.
Conclusion
A Nominee Director in Singapore is essential for foreign-owned companies to meet legal requirements while maintaining privacy and compliance.
By understanding their roles, responsibilities, and potential risks, companies can ensure smooth operations and regulatory adherence.
Working with a trusted Nominee Director Service helps manage compliance efficiently and protects both the company and the nominee from legal exposure.