The Role of a Nominee Director: A Guide for Foreigners Looking to Form a Company in Singapore

When setting your sights on incorporating or expanding your business in Singapore, navigating the regulatory landscape is crucial. A key requirement for foreign companies in Singapore is the appointment of a local resident director. Explore how this crucial requirement shapes your journey into local business ecosystem.

Why You Need a Nominee Director

Under Singapore law, every company is required to have at least one director who resides locally. Often termed as the ‘Nominee Director,’ this role is particularly crucial for  foreign entities seeking to establish a local business.

By appointing a local nominee director, foreign entrepreneurs ensure their company adheres to this legal stipulation, maintaining compliance with local regulations.

Who is a Nominee Director?

A Nominee Director acts as the local resident director for your Singapore company, fulfilling a regulatory role without engaging in the day-to-day operational decisions of the company. This arrangement is vital for maintaining the legal standing and operational legitimacy of your business in Singapore.

The individual must be either a Singapore citizen, a permanent resident, or an Employment Pass holder linked to the company. Beyond their residential status, the local director must be a natural person over the age of 18 and cannot be a corporate entity.

What are My Options to Fulfil this Nominee Director Requirement?

1. Relocation of a Foreign Executive: This involves moving a foreign executive to Singapore to serve as the resident director, provided their work pass is approved.
2. Nominee Director Service: Alternatively, companies can opt for a Nominee Director service offered by corporate services firms. This is a popular choice for those looking to meet the resident director requirement efficiently.

✅ Counto’s Nominee Director services are designed to simplify compliance, allowing you to focus on what you do best: growing your business. Get in touch here. 

Key Functions and Limitations of a Local Director

While the Nominee Director holds a non-operational role, their responsibilities are significant, ensuring the company stays within legal boundaries. However, there are clear limitations to what they can do:

• They typically do not sign documents imposing personal liability, like tenancy agreements or employment contracts.
• They cannot act as the sole signatory for bank accounts or undertake financial liability for the company.
• They are bound by law not to carry out unlawful requests.

Duration and Transition

Initially, your company may operate with a Nominee Director alongside yourself. This setup is sometimes temporary, lasting until you can replace the Nominee with a director who meets the residency criteria, such as obtaining an Employment Pass.

Risks for the Nominee Director

Engaging a Nominee Director comes with its set of legal responsibilities. While they are not involved in the daily affairs, their liability for ensuring the company adheres to Singapore’s legal framework remains intact. This underscores the importance of choosing a reputable and reliable corporate services firm for Nominee Director services.

Using an incorporation service as an extension of your team

Setting up a company in Singapore can be challenging, but with professional support, it can be simple. Counto’s mission is to support your new business, take away the complexities of compliance, and save you time and money throughout the year. Speak to us directly on our chatbot, email us at [email protected], or contact us using this form.

Here are some articles you might find helpful:

Employment Pass

Pte Ltd vs. LLP

Registering your business

SSIC codes