Who is a Nominee Director in a Singapore Company and What are His Roles and Responsibilities?

What is a Nominee Director?

In Singapore, it is mandatory for a company to have a local resident director. If the company does not have a local resident director, it can appoint a nominee director.

Every company that is registered in Singapore must have at least one director who is a resident of the country. This is a regulation of the country's Companies Act.

If a foreigner incorporates a company in Singapore but does not have a local person who can act as a resident director of the new company, then the foreigner can "hire" a person to act as a director for a fee. Such a director is called a Nominee Director; sometimes the term "local director" is used. The nominee director must be a citizen or Permanent Resident of Singapore and must have a permanent address that is located in Singapore.

The nominee director does not play any role in operating the company but is appointed simply to satisfy Singapore's regulatory requirements.

How can you get a Nominee Director for your company?

In most cases, the corporate services provider that you use to incorporate the company will offer the ND service. We at CorporateServices.com also offer this service, both to newly incorporated companies as well as existing ones.

What are the risks of hiring a Nominee Director?

The Companies Act states, “The business of a company shall be managed by, or under the direction or supervision of, the directors” and that, “The directors may exercise all the powers of a company except any power that [the Companies Act] or the constitution of the company requires the company to exercise in general meeting”.

In general, this means directors have the authority to make all decisions on behalf of the company unless the matter requires an ordinary or special resolution decided upon by a shareholder vote.

Therefore, it's important to appoint a reputable corporate service provider to handle the affairs of the company. Such a service provider will not only appoint a "professional" local director (usually one of their senior staff members) but also contractually limit the powers of a nominee director via the service agreement. Furthermore, you will be asked to appoint one or more executive directors (who do not have to be residents of Singapore and can reside in any country) to manage the affairs of the company. When you want to appoint a nominee local director for your company, you should have complete peace of mind and that's what a professional service provider will offer.

When you use our Nominee Director service:

1. The Nominee Director is contractually prohibited (by way of your contractual agreement with us) from participating in the management of your company.

2. The nominee director will not come to your office, cannot participate in any policy meetings, and will not engage in any negotiations on the company's behalf

3. Nominee director is simply a figurehead director to comply with the local director requirement. The non-ND directors (i.e. your executive director(s)) operate the company.

If you are interested to to incorporate a company in Singapore and needs a nominee director, please CONTACT US for a friendly and in-depth discussion.