Singapore's vibrant economy and environment conducive to business have led to many companies forming there. During company formation, a nominee director must be appointed. There are certain requirements and responsibilities that come with the position of nominee director.

Importance of Qualified Nominee Director for Company Formation in Singapore

Singapore is one of the world’s leading corporate and business hubs in the world today. Its vibrant economy and business-friendly environment make it a desirable location in which to  start a company. Singapore’s government has also put various procedures in place which make it easier for business to be conducted in the country. All these factors have helped greatly in developing the Singaporean economy and turn it into a global corporate heavyweight.

Registering a company in Singapore is relatively simple when compared to doing so other Asian countries. The relative lack of restrictions in doing so is a great boon in this matter.

However, as is the case in any other country, there are nevertheless regulations and requirements that one must abide by before the registration can be approved. One of these regulations and requirements is related to the important position of nominee director.

Nominee Directors and Singapore Residence

The nominee director of any company based in Singapore is required to be a legal resident of Singapore. This means a nominee director must be a citizen or permanent resident of Singapore or the holder of one of several passes conferring a work permit upon their holder.

These passes include the Employment Pass and EntrePass. However, just because someone is a resident does not mean that this person will make a competent nominee director. The person also needs to be able to fulfill the duties and responsibilities that come with the position.

Responsibilities of a Nominee Director

One of a nominee director’s primary responsibilities is protecting the company’s fiduciary interests. This means that the director is to be completely honest when dealing with affairs that directly affect the company.

The director must also be wary of any conflicts of interest that may arise. Should any such conflicts arise during the director’s tenure, the director is to bring up these issues with the company’s board members. This is because a lack of awareness about such issues will undermine the company’s reputation and organizational operations. In general, nominee directors are to always put the interests of the company before their own.

Nominee directors are also to ensure that the company remains compliant with any statutory bodies which regulate all registered companies in Singapore. The body in charge of any statutory and regulatory matters related to accounting and company tax is the Accounting and Corporate Regulatory Authority (ACRA). Nominee directors must constantly keep themselves updated with information issued by ACRA.

A company’s director must also work with the company secretary to ensure that all the company’s forms and records are promptly lodged with ACRA.

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As part of the requirement, all records must be kept securely for a five-year period. Failure to do so will lead to punishments being imposed onto the company.

A nominee director must also ensure the appointment of an auditor within three months of the company’s formation.

The relevant authorities have instituted several statutory regulations for company directors. These regulations are intended to ensure that all nominee directors successfully discharge all duties and tasks required of them. In cases of failure to discharge duties properly or breaches of conduct, punishments such as fines, imprisonment, or both will be imposed.

With regard to this matter, it is crucial that all nominee directors remain uninvolved in criminal activity. Some nominee directors in Singapore have been implicated in grievous financial crimes. Such crimes include offenses such as money laundering, fraud, and illegal money transfers, among others. The Monetary Authority of Singapore (MAS) has placed much emphasis on combating this increasingly rampant scourge.

Nominating a director is a crucial step in establishing a Singapore company. Whoever is selected for this role must certainly have the appropriate qualifications. Only those who are able to handle the vast responsibilities of the position deserve to be in it. Just because one may accept the nomination does not necessarily mean that this person is fit to be a company director.

Accounting and financial service providers can help a company nominate a director. Such providers are usually experienced with regard to company formation. Due to this fact, these providers will be able to give guidance concerning company incorporation and formation. Business owners should always seek assistance from experts so that all necessary steps to be taken will be completed smoothly and effectively.