What’s in this article
If you’re planning to set up a business in Singapore, you’ve probably heard about the option of appointing a nominee director. So, Why is it so important for foreigners who are planning to set up a company in Singapore? Well, We’ve got you covered!
Importance of Nominee Director for Foreigners in Business Registration
What is a Nominee Director? Nominee director is an individual who is appointed to act as a director of the company on behalf of another individual or entity.
For all foreigners establishing businesses in Singapore, having a nominee director is essential due to regulations from the Accounting & Corporate Regulatory Authority (ACRA).
When incorporating a company in Singapore, there are some requirements that need to be met. The company must have:-
- A paid-up share capital of min $1
- A local registered office address
- At least one shareholder
- Local company secretary
- At least one local director
Under the provisions of the Singapore Companies Act, it is important for every company to have at least one director who is a resident of Singapore. Although a company can appoint multiple directors, ACRA will prohibit registration if none of them are local residents.
This is where nominee directors play a crucial role.They’re appointed to meet legal requirements without actively managing the company. Since a resident director must be a Singapore citizen or Permanent Resident, having a Nominee Director will help to fulfill these requirements and thus allow the foreign entrepreneurs to start a business in Singapore.
Eligibility Criteria
The criterias required for a nominee director are as follows:
- Must be an individual, not a corporate entity.
- Must be at least 16 years old in the UK and over 18 in other jurisdictions.
- Has never faced disqualification from serving as a director.
- Is not bankrupt.
- Is not the company’s auditor.
Role of Nominee Director
Despite being a part of a requirement for incorporating your business, a Nominee director also plays a crucial role in your business. Their primary responsibility is to ensure that your company is in compliance with Singapore’s laws and regulations.
They handle important tasks such as:
- Attending and documenting annual general meetings (AGMs)
- Filing annual returns with the ACRA
- Signing company documents, including contracts and resolutions
- Serving as a liaison between the company and ACRA
However, you can be rest assured as the Nominee Director will not have any operational or functional role of your company and that you can limit a nominee’s ability to influence your company through a written agreement with them.
Advantages of using Nominee Director in Singapore
Engaging with nominee director services providers will present various advantages and in fact, if you are a foreigner in Singapore, you cannot even incorporate a company without a local director.
Some of the advantages of using Nominee Director Services would be:-
- Meeting ACRA Requirements: Fulfilling the mandate of having a local director becomes simpler for foreigners through the use of a nominee director.
- Ensuring Compliance: With a nominee director who possesses thorough understanding of jurisdictional regulations, particularly with ACRA and IRAS, confidence in company compliance is bolstered.
- Establishing a Physical Presence: Utilizing a nominee director provides the company with a physical address in Singapore, aiding in local operations and credibility.
- Enhanced Oversight: Nominee directors often undertake due diligence to ensure effective company management and adherence to legal requirements.
What type of Nominee Director services are available from a Service Provider
There are 2 types of Nominee Director services in Singapore. They are:
- Long term Nominee Director (LTND) : 12 months
- Short Term Nominee Director (STND) : 2 months and 6 months
If you are a foreigner who want to avoid personal income tax or if you hold a high risk passport, you should go for a LTND services. Whereas, if you are incorporating new business in Singapore and need Nominee Director services for incorporation purposes only, you should go for a STND service.
Steps to incorporate with Nominee Director
Now that you’re familiar with the concept of employing a nominee director in Singapore, let’s get you to incorporate your company in 3 Simple Steps!
- Step 1: Understand the role of nominee director and sign off the agreement.
- Step 2: Register your account in Tantoo platform and fill up a 5 minute incorporation form. Upload the required documents and KYC form
- Step 3: Make payment on our platform.
In 3 easy steps, you can get a reliable and professional Nominee Director in Singapore already! So, what’s you waiting for? Alternatively, you can also fill up the form on this website and our consultants will attend to you immediately.
Nominee Director Vs Nominee Shareholder
The distinction between a nominee shareholder and a nominee director can often be a source of confusion. A nominee shareholder is an individual who allows you to use their name as the registered owner of shares in your company. However, they hold these shares on your behalf, and you retain all rights and benefits associated with them, such as selling shares, receiving dividends, and voting at general meetings.
On the other hand, a nominee director is someone who acts as a director of the company on behalf of the company’s owner. While the nominee director and nominee shareholder can sometimes be the same person, the nominee director’s role is to represent the owner’s interests and follow their instructions. They do not have control over the company but carry out their duties as directed by the ultimate company owner.
FAQs
In Singapore, there are two primary reasons why appointing a nominee director is essential:
- Short-term necessity during Employment Pass (EP) application: When applying for an EP in Singapore, having a local nominee director can be crucial for meeting regulatory requirements.
- Long-term operational needs for offshore company management: If you’re considering remote operation of an offshore company in Singapore, a nominee director may be necessary for compliance and administrative purposes.
If you’re in the process of obtaining an EP, our handbook can guide you through the essential steps for success. Additionally, for those planning long-term usage of a nominee director, we’ll delve into the pros and cons to help you make informed decisions.
Yes. A foreigner can be a director for a company in Singapore. This can be done by setting up a registered company in Singapore through a company registration service provider.
So If you are a foreigner planning to set up company in Singapore and want become director of the company, here’s what you should need to know:
- You must have at least one local director.
You can hire a local nominee director for 2 months and then once your company is incorporated, you can transfer the full ownership to you. In other words, you become a director in 2 months after your company is incorporated.
- You must have at least one local secretary
Next, In order for your company registration to be successful, you must appoint one local secretary who knows about the industry and all the filings requirements of your company.
This is where service providers can be useful because there are services like 2 months short term nominee director services as well as long term nominee director services. Moreover, they also provide professional corporate secretary services from business registration all the way to applying for a work visa so you won’t need to worry about setting up a company and can just focus on achieving your company goals.
No, a nominee director cannot be a foreigner. This is because a nominee director is appointed to fulfill the requirement of at least one local director of a Singapore company, thus, no foreigner is allowed.
Yes, you can resign the nominee director at any time once you have obtained your Employment Pass or / you have identified another person who can satisfy the local director’s requirement.
A nominee director is not granted the same powers and privileges as those granted to a conventional director. A nominee director is only the director of the company in a name. Therefore, the nominee director’s position within the company ought to be limited.
