Pros and Cons of being a nominee director in Singapore


This article explains the concept, roles, and responsibilities of being a Singapore company resident director.

Nominee director role at a glance 

Under Section 145(1) of the Companies Act, every company shall have at least one director who is ordinarily resident in Singapore. The Accounting and Corporate Regulatory Authority (ACRA) defines a nominee director as someone who is under legal obligations, or even informal arrangements, to act in accordance with the directions, instructions or wishes of another person. 

Foreign firms incorporated in Singapore have to engage a local director to meet this statutory requirement.  Such a person is called a Nominee Director; at times the term “local director” is applied. 

Who can be a nominee director?

Nominee directors are hired primarily for statutory compliance of having a minimum of one director who is a Singapore resident, thus nominee directors have to be a citizen or a permanent resident of Singapore with a permanent Singapore address

Nominee directors also have to comply with the requirements of being a director, and be at least 18 years old. Additionally, under Section 155(A) of the Companies Act, they should not be:

  • An undischarged bankrupt
  • A person convicted of any offence involving fraud or dishonesty that carries an imprisonment term of 3 months or more
  • A person who has been convicted by the court of 3 or more ACRA filing offences
  • A person with 3 or more companies that have been struck off by ACRA within a 5-year period

Electing a nominee director

For companies incorporated on or after 31 March 2017, a director who becomes a nominee must inform the company of that fact, and provide the required particulars of the nominator within 30 days from the date of incorporation. 

Responsibilities of a local director

Their basic roles and responsibilities include: 

  • Avoid any conflict of interest between their personal interest and those of the company
  • Act in good faith on behalf of the company’s best interests
  • Comply with statutory requirements of the company, including holding the annual general meeting and filing of annual returns of the company

A nominee director is generally appointed only in name, and is not involved in the day to day operations of the company. Depending on the written agreement between the company and the nominee director, the company can choose to contractually limit the influence and authority of the nominee director. 

Benefits of being a director 

Under the Singapore Institute of Directors’ Statement of Good Practice, non-executive directors should still be paid director fees in accordance with the agreed scales. Thus, nominee directors generally receive a good amount of money despite the small amount of responsibilities. 

Liabilities of a director

Failure to properly exercise a nominee director’s roles and responsibilities can result in fines and penalties. 

If the company goes bankrupt or commits fraud, the director will be liable on his personal assets. 

How can nominee directors safeguard their interests?

To decrease risk, strategic measures can be used to minimise and protect a director’s role. 

One common way is to sign a nominee director indemnity agreement to safeguard the nominee director from any losses, penalties, fines or claims of any nature. 

Most nominee directorship agreements involve the payment of a security deposit to the nominee director, which is refunded once their contract expires. This serves as insurance should the company violate any laws that incur financial penalties for the nominee. 

Another option is to purchase directors and officers (D&O) liability insurance which provides directors with personal liability and financial loss coverage.  


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