The Nominee Director in Singapore: A Must-Know

Under Section 145(1) of the Singapore Companies Act, every company incorporated in Singapore must have at least one director who is "ordinarily resident" in Singapore. This means a Singapore Citizen, Permanent Resident, or an EntrePass holder who can prove their local residency.

For foreign entrepreneurs who do not have a local resident to appoint, this poses a significant challenge to incorporation. This is where the Nominee Director service comes in.

A Nominee Director is a qualified Singapore resident appointed to your company's board to satisfy the statutory requirement. It's crucial to understand that this is a non-executive role.

Key Characteristics of a Nominee Director:

• They do not get involved in the operational, financial, or managerial aspects of your business.
• They do not have any authority over your corporate bank account.
• Their primary function is to ensure the company remains compliant with Singaporean laws, such as timely filing of annual returns.
• The role is purely to fulfill a legal requirement, allowing foreign founders to maintain 100% control over their company.

When you engage a nominee director service, you will sign a legal agreement that clearly outlines the scope and limitations of their role. This agreement is designed to protect both you and the nominee.

While the role is non-executive, a Nominee Director is still legally considered a director and is subject to the same statutory duties under the Companies Act. Because they take on personal liability for your company's compliance, the service provider will require a security deposit.

This security deposit is refundable and is held to cover any potential fines or penalties incurred by your company due to non-compliance. Maintaining good corporate governance is the best way to ensure your deposit is returned in full.