What is a Nominee Director and why might I need to use one?
4 minute read
Singapore’s Companies Act stipulates that all Singaporean incorporated entities must have at least one locally resident director on their company’s board at all times, including at the date of incorporation.
A local resident director is classified as someone who is physically residing in Singapore (validated by proof of a local residential address) and who has not been disqualified from holding a directorship position.
In Singapore, at the time of incorporation the local resident director position can only be held by someone who is a Singapore Citizen, Permanent Resident or the holder of an Entrepass work visa.
An Employment Pass (EP) visa holder can only be appointed as a director of a Singapore entity only after the new entity has been successfully incorporated and the corporate bank account has been opened. The reason being that the company first has to come into existence before it can sponsor the EP visa holder. The directorship eligibility for an EP holder are also contingent upon the appropriate approvals from the Ministry of Manpower, which typically involve the granting of a valid Letter of Consent (LOC) and if the EP holder is already a director of another Singapore entity the approval for taking up a secondary directorship.
More Director Guidelines here from Ministry of Manpower.
What is a Nominee Director and why might you need one?
To help our client’s to fulfill ACRA’s local director statutory requirement we offer a Nominee Director service: 3 months (S$500), 6 month (S$800) and 1 year (S$1,500).
Many foreign entrepreneurs and business owners who do not know any Singapore Citizens, Permanent Residences or Entrepass Holders willing to support their project will typically take up the use of a Nominee Local Director Service. The use of such as service is stipulated under Section IXA of Singapore’s Companies Act.
The term ‘Nominee’ is used to indicate that the director position is strictly a non-executive role. It is provided only to help satisfy Singapore’s regulatory compliance and thus does involve the Nominee Director taking any other direct involvement in the operation aspects of the business (i.e. single handedly authorising the incorporation, opening of a company bank account, voting or attending board meetings, etc).
While the position is non-executive, it is important to note that every director in Singapore still must abide by a general duty to ensure the company remains compliant. Therefore the position still carries a general responsibility and inherent liability. To help mitigate this liability when offering our Nominee Director Service we take out the appropriate insurances for our Nominee Directors, including a Deed of Indemnity and Directors & Officers Insurance.
Benefits of Sleek’s Nominee Director Service
There are quite a few benefits of getting a Nominee Director:
What are the conditions for using Sleek’s Nominee Director Service?
If you are a foreign entrepreneur/business owner, this is the best option for you and we are here to help at every step.
We have a team of trusted professionals who will undertake the role of a Nominee Director. They have the capabilities and knowledge to help your company maintain a good reputation and also keep your company compliant at all times.
Contact us to find out more about the Nominee Director service and corporate insurance.