Foreign entrepreneurs and business owners who do not have connections with any Singaporean, permanent resident, or Entrepass holder typically use a nominee director service provided by firms such as CorpXervices. Using such service is imposed under the Companies Act, Section IXA. The appointment of a nominee director in Singapore goes after company registration.
The Singapore Nominee Director’s Role
What is a nominee director in Singapore? A nominee director is not an executive role within the company. The process is only meant for complying with Singapore law. This individual cannot interfere with your decisions, doesn’t come to the office, and has no final say in negotiations and internal meetings. A nominee director cannot be the company secretary. The role has to be filled by another person.
Although a non-executive role, a nominee director is still bound by its general responsibility of ensuring that the company maintains its compliance with Singapore laws (a duty that’s similar to the company secretary).
The Risks that a Singapore Nominee Director Shoulders
A nominee director, even from a service provider, carries liabilities to potential risks. For example, if the company’s actual directors violate Singapore laws, the nominee director will still be held accountable.
Singapore authorities will search for the directors and owners who have breached policies. Once they’re found, they will be prosecuted to the fullest extent of the law. But when the company’s foreign owners and directors cannot be contacted, it’s the nominee director who will be required to face financial liquidation charges.
Firms offering nominee director services have their ways of mitigating these risks. Some providers offer a corporate secretary and nominee director package to ensure that the company follows statutory requirements. Others will require you to sign a nominee director indemnity agreement.
Frequently Asked Questions About Nominee Directors
How much is the fee of a nominee director?
It depends on the experience, offerings and packages of your preferred firm. If you’re looking for a range, it roughly costs $2000 annually.
What is the Register of Nominee Directors?
The Register of Nominee Directors is as the name implies. The nominee directors are listed together with the information regarding the directors’ nominators.
Companies (unless exempted) are required to keep this register beginning March 31, 2017. This register, accompanied by supporting documents, is for inspections by the Singapore Accounting and Corporate Regulatory Authority (ACRA). Failure to comply will result in a fine of up to $5,000.
Why do I need a nominee director?
Aside from complying with statutory requirements, hiring a nominee director enables a company owner to stay anonymous. It also protects entrepreneurs against ownership information disclosure in case of a public inquiry. Having a nominee director also ensures anonymity when it comes to signing documents for business deals.
Benefits of Hiring a Firm that Provides Nominee Director Services
Foreigners who are not familiar with Singapore laws and regulations can attain peace of mind when they choose to hire an individual from a nominee director service provider. When you have trustworthy professionals such as CorpXervices supporting your business, you gain access to experts who are fully knowledgeable about compliance and filing schedules. As a result, your company maintains its credibility, and you are assured full statutory compliance.
You can run your company smarter.
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