Is a resident director required for registration of a Singapore company?
Yes, as per Singapore Company Act, each private limited company must at least one director who is locally resident in Singapore. A Singapore citizen, permanent resident, employment pass holder, or dependent pass holder who is resident in Singapore qualifies as "locally resident".
Is it possible to engage the services of a nominee director?
Yes that's possible and many incorporation service providers offer this service for a professional fee. Normally a nominee director does not have any financial, management, or operational interest in the company. A nominee director's role is just to satisfy the statutory requirement of a local resident director for your Singapore company. If you need the services of a nominee director, make sure the incorporation agent you hire offers this service.
If I engage the services of a local nominee director, does this mean he/she will just be a sleeping director of my company?
According to section 157 of the Singapore Companies Act, a director is a person responsible for managing the affairs of the company and providing it with directions. This means that once a person has agreed to become a director, and in this case, a nominee director of your company, he/she is recognized in the eyes of the law as a director of your company. This therefore makes your local nominee director liable to fulfil all compliance duties.
Both the actual director and nominee director carry the same responsibilities, even though a nominee director does not get involved with the management and operations of the company. Therefore, while acting as a nominee director one takes on the risk and responsibilities for a client’s company and has to assess each case carefully.
My potential business partner has an EntrePass. Can he be my local nominee director?
Therefore if you are referring to a company that’s different from the EntrePass holder’s sponsoring company, you need to find another “ordinarily resident” person to become your local nominee director.
A person cannot act as the director of a Singapore company, if he/she:
- had a disqualification order made against him by a court
- is an undischarged bankrupt
- was convicted for 3 or more filing-related offences under the Companies Act within a period of 5 years
- had 3 or more High Court Orders made against him compelling compliance with the relevant requirements of the Act, within a period of 5 years
- had a company wound up for national security reasons
What are the typical terms for providing a nominee director service?
As per Singapore company laws, the responsibilities of a company director are quite onerous and therefore certain conditions must be fulfilled in order for a service provider to offer a nominee director service. Typically these include:
- The service provider will need to be satisfied with the credibility of company beneficiaries.
- You will be required to sign a nominee director indemnity letter.
- In addition to the nominee director professional service fee, a refundable security deposit is also required.
Why do service providers ask for a security deposit when providing nominee director service?
As per Singapore Company Laws, responsibilities of directors are quite onerous for all directors including nominee director. In fact, in the eyes of Singapore law, there is no difference between a nominee and a regular director. The nominee director is required to pay for the company liquidation charges in case the foreign client is no longer reachable. To safeguard the interests of nominee director, service providers typically ask for a refundable security deposit that then keep with them as long the nominee director service is active.
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