Nominee Directors: A Must-Know for Foreigners Setting Up in Singapore

Singapore’s business-friendly environment is a draw for global entrepreneurs, but one rule is non-negotiable: every company must have at least one local director who resides in Singapore. For foreign business owners not based here, a nominee director is often the key to meeting this requirement. This article breaks down the role of nominee directors, when they’re needed, and potential exemptions.

What Is a Nominee Director?

Singapore law requires at least one director to be “ordinarily resident” in Singapore—meaning a citizen, permanent resident (PR), or holder of a valid work pass, such as an EntrePass or Employment Pass. If you’re a foreign entrepreneur without a local presence, a nominee director is appointed to fulfill this legal obligation.

Nominee directors typically don’t manage your business operations but are legally accountable for compliance. This is why secretarial services Singapore providers offering nominees use strict contracts and deposits to protect both parties from risks.

Who Needs a Nominee Director?

You’ll likely need a nominee director if:

• You’re launching a company from outside Singapore.
• You’re not relocating or obtaining a Singapore work visa.
• No team member is a Singapore resident eligible to serve as a director.

Corporate secretarial services can provide a nominee director and ensure your company stays compliant with local regulations.

Can Foreigners Serve as Directors?

Yes, if you live in Singapore with a valid work pass, such as:

• EntrePass: For entrepreneurs with innovative business ideas.
• Employment Pass (EP): For professionals, often used if you’re employed by your own company.

With an approved pass, you can act as the local director, eliminating the need for a nominee. Ensure your visa is approved before assuming this role, as you cannot serve as the sole director without it.

Are There Exemptions?

Exemptions to the local director requirement are limited:

• Local Co-Director: If a business partner or co-founder is a Singapore citizen or PR, they can serve as the local director.
• Existing Work Pass: Foreigners in Singapore with a visa allowing business activities may qualify as the local director.
• Foreign Subsidiaries: Subsidiaries of foreign companies still require a local individual director, as the parent company’s residency doesn’t count.

Corporate secretarial services can help navigate these exemptions and ensure compliance with the Accounting and Corporate Regulatory Authority (ACRA).

Risks for Nominee Directors

Nominee directors face legal liabilities, including:

• Failure to file annual returns
• Trading while the company is insolvent
• Involvement in fraudulent or illegal activities

To mitigate these risks, secretarial services Singapore providers use detailed agreements and deposits. Avoid appointing someone unfamiliar with these responsibilities to avoid legal complications.

How Corporate Secretarial Services Help

For foreign entrepreneurs, company secretarial services are essential, offering:

• Nominee director appointments
• Filing of mandatory compliance documents
• Maintenance of statutory registers
• Provision of a registered office address
• Tracking of ACRA deadlines

These services ensure your company remains compliant, avoiding penalties and maintaining good standing.

Choosing a Nominee Director Provider

When selecting a service, prioritize:

• Transparency: Ensure the agreement clearly outlines the nominee’s role and liabilities.
• Experience: Choose providers with a proven track record for reliability.
• Control: Confirm the nominee has no access to your company’s finances or decisions.

Conclusion

Singapore’s local director rule is a critical compliance step for foreign entrepreneurs. By partnering with trusted secretarial services Singapore providers, you can appoint a nominee director and focus on growing your business while staying compliant in Singapore’s thriving market.