What is a Nominee Director and Why Do You Need One?

Staff Writer

January 23, 2022

What’s in the article?

Nominee Directors are appointed to represent the interests of a Singaporean company, group  or organization in the absence of a local director. A Nominee Director does not have any responsibilities in operating the company as indicated by the term ‘Nominee’, but is appointed to ensure the company’s full compliance with the Singaporean law. The ND may also suffer severe punishments should the company commit any wrongdoings.

According to the Singapore Companies Act, each Private Limited Company needs to have at least one (1) director who is a resident of Singapore. However, in cases where you do have a director in your company who is a resident of Singapore, you can be provided with a reliable director from Singapore as your nominee director.

Scopes and Responsibilities of a Nominee Director in Singapore

  • It is clearly mentioned in the Companies Act that all the registered companies located in the city have to appoint a minimum of one director who is a resident of Singapore originally. 
  • This requirement can be fulfilled if your company does not have any director who is a resident of Singapore by opting for a Nominee Resident Director on both an annual and a short term basis.
  • There are a number of responsibilities, as well as obligations, which are imposed on the Nominee Director by the Companies Act, as well as the normal law.
  • The company's major share of power is enjoyed by the Board of Directors. They are the ones to not only control the affairs of the company, but also answer to the company's shareholders.
  • It is the directors who are indeed responsible for maintaining annual accounts and accounting records, statutory filings and books, and meetings of directors and shareholders. Most importantly, they have a sincere duty towards their company.

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Required Number of Directors

A company in Singapore only needs a minimum of one director, but this number can go up to any number depending on the constitution of the company. Another important thing to note is that if a company has just one director, then he's the sole director of the company as well.

But, there is one obligation in which the company still needs to have a minimum of two company officers. One is the director, while another is the company.

Who Can Qualify to Become a Nominee Director?

The Nominee Director of a company has to be a citizen or a permanent resident of the country, or be a holder of an Entrepass work visa and have a permanent residence in Singapore. The nominee must also be at least 18 years old.

There is no maximum age as such to be a director of a private company. However, public companies impose a maximum age limit of 70 years. The only exception is if they're reappointed again by the company after crossing the age of 70. In this situation, they may work again so long as they are of sound mind and generally capable of maintaining their position.

Who Cannot Qualify to Become a Nominee Director?

There are certain circumstances defined by the ACRA which disqualify a person from becoming a company director. They are:

  • A criminal convicted for offences such as fraud and dishonesty.
  • A bankrupt who is undischarged.
  • If a court has made an order of disqualification against a person.
  • Has a minimum of three High Court orders which compels compliance within a tenure of five years under the Companies Act.
  • Convicted for at least three years for offending the Companies Act within five years time.
  • The company winding up (dissolving) for reasons related to national security or national interest.
  • It is always the director's duty to inform the company which is concerned, which in turn should inform ACRA regarding the disqualification status.

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Statutory Requirements to Become the Nominee Director of the Company

The director is responsible for two most important things. They are:

  • Holding and convening the Annual General Meeting of the company.
  • The subsequent filing of the annual returns of the company to the Accounting Compliance Regulatory Authority of Singapore (ACRA) by specifying the due dates (usually within the month of AGM)
  • Submitting the company’s tax returns to the Inland Revenue Authority of Singapore (IRAS)

If the requirements aren't met, then the company has to either face a penalty or the directors may face legal actions.

Usually, when there is an AGM, directors are elected, auditors are fixed, dividends are declared, and remuneration is determined. The company's balance sheets and accounts are also determined. However, the private companies have the choice to or not to hold AGMs. But they should first consult with all the members of the company and pass a resolution for the same.

Other Duties of a Nominee Director in Singapore

  • Engage with society
  • Ensure corporate governance 
  • Adopt social and ethical responsible practices 
  • Practice corporate social responsibility 

Thus, there are several responsibilities which a director has to fulfill. In Singapore it is a must for a company to have a director who is a resident of Singapore. If you cannot find a nominee director on your own, it is best to hire a local company to do the services for you to fulfill your statutory compliance requirements.

Aside from nominee director services, we at WealthBridge also offers corporates services such as incorporation, secretarial services, accounting, tax filing, payroll services and more. Through our well-honed legal knowledge, as well as a variety of innovations such as outsourcing and technological solutions, we can help businesses and corporations discover their own path to growth and success.

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