Singapore’s streamlined business setup process makes it a top choice for foreign entrepreneurs, but one rule stands firm: every company must have at least one local director residing in Singapore. For those not based here, a nominee director is often the solution. This article explains the role of nominee directors, when they’re required, and how exemptions work.
What Does a Nominee Director Do?
Singapore law mandates that every company has at least one director who is “ordinarily resident” in Singapore—a citizen, permanent resident, or holder of a valid work pass like an EntrePass or Employment Pass. If you’re a foreign business owner without a local presence, a nominee director is appointed to meet this requirement.
Nominee directors typically don’t manage your company but are legally accountable for compliance. This is why secretarial services Singapore providers offering nominees use strict contracts and deposits to manage risks.
When Is a Nominee Director Required?
You’ll likely need a nominee director if:
- You’re setting up a company from outside Singapore.
- You’re not relocating or securing a Singapore work visa.
- No team member qualifies as a Singapore resident eligible to act as a director.
Company secretarial services can provide a nominee director and ensure your company complies with local regulations.
Can a Foreigner Be the Local Director?
Yes, if you live in Singapore with a valid work pass, such as:
- EntrePass: For entrepreneurs with innovative business plans.
- Employment Pass (EP): For professionals, often used if you’re employed by your own company.
With an approved pass, you can serve as the local director, bypassing the need for a nominee. Ensure your visa is approved before taking on this role.
Exemptions to the Local Director Rule
Exemptions are limited but include:
- Local Co-Director: A Singapore citizen or PR on your team can serve as the local director.
- Existing Work Pass: Foreigners in Singapore with a visa permitting 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 assist in navigating these exemptions and maintaining compliance with ACRA.
Risks of Being a Nominee Director
Nominee directors face legal responsibilities, including liability for:
- Non-compliance with annual filings
- Trading while insolvent
- Involvement in fraudulent or illegal activities
To protect nominees, secretarial services Singapore providers use detailed agreements and deposits. Avoid appointing someone unfamiliar with these obligations to prevent issues.
Why Use Corporate Secretarial Services?
For foreign entrepreneurs, corporate secretarial services simplify compliance by offering:
- Nominee director appointments
- Filing of required documents
- Maintenance of statutory registers
- A registered office address
- Deadline monitoring to avoid penalties
These services keep your company in good standing with ACRA, ensuring smooth operations.
Tips for Choosing a Service
When selecting a nominee director provider, consider:
- Clear Terms: The agreement should define the nominee’s role and liabilities.
- Proven Expertise: Choose providers with a strong track record for reliability.
- Control: Ensure the nominee has no access to your finances or business decisions.
Final Thoughts
Singapore’s local director requirement is a key compliance hurdle for foreign entrepreneurs. By working with trusted secretarial services Singapore providers, you can appoint a nominee director and ensure compliance, allowing you to focus on building your business in Singapore’s vibrant economy.
