Nominee Shareholder in Singapore

According to Singapore’s laws, a nominee shareholder can be an individual or corporate entity, authorized by the share owner. A shareholder does not necessarily have to be a Singapore citizen, but he must either be a Permanent Resident, Employment Pass holder, or Dependant Pass holder.

The nominee shareholder must be appointed during the document drafting stage of the company registration process. This is because the name of the nominee shareholder will need to be listed in the shareholder information section on the incorporation documents.

When registering a nominee shareholder, the beneficial owner’s name, address, as well as the number of shares allotted to the nominee are required. The Singapore nominee shareholder is selected in order to protect the beneficial shareholder’s identity from the public. To update the Singapore Accounting and Corporate Regulatory Authority’s (ACRA) records with the new shareholder information, the nominee must submit an annual return.

Nominee shareholders in Singapore are usually employed to maintain full privacy by the company’s owners and are required to act only as instructed by the beneficial owners. They have no access to the company’s bank accounts and do not have the power to make payments on the company’s behalf.

A nominee shareholder can either be another individual not necessarily a Singapore resident who allows 100% foreign shareholdings of a company, or any other offshore company which provides these services. Companies providing such services are preferred over individuals as these businesses are regulated, organized and adds to the safeguards of owners against any corporate malpractice.

Nominee shareholders in Singapore are usually employed to maintain full privacy by the company’s owners and are required to act only as instructed by the beneficial owners. They have no access to the company’s bank accounts and do not have the power to make payments on the company’s behalf.

A nominee shareholder can either be another individual not necessarily a Singapore resident who allows 100% foreign shareholdings of a company, or any other offshore company which provides these services. Companies providing such services are preferred over individuals as these businesses are regulated, organized and adds to the safeguards of owners against any corporate malpractice.

In Singapore, the public can identify directors and shareholders of any company simply by looking it up. This is accessible to anyone for a small fee, and anyone would be able to have access to the personal details of the directors and shareholders.

Nominating a shareholder means only the name of the registered nominee shareholder will appear on the records of Singapore Accounting and Corporate Regulatory Authority (ACRA). In other words, the share owner will be able to reserve his or her privacy and remain completely anonymous to the public. This is a fantastic benefit as one will be able to keep personal information entirely confidential, especially from company competitors.

Risks set in when a shareholder is not appointed in a proper and professional way as there may be possibilities that:

In the unfortunate event that any of the above takes place, you will face the risk of:

This is a common basis of confusion for many when appointing a nominee shareholder. A nominee shareholder is a person that “lends his name” to you to act as the registered owner of shares in a company, when in reality, he/she only holds the shares for your benefit.

Should you decide to appoint a nominee shareholder, he/she will appear to be the owner of the shares, and you will be able to keep the arrangement a secret. You retain all of the rights and benefits in the shares, such as the right to sell shares, receive dividends as well as vote at general meetings.

On the other hand, a nominee director is a person who acts as a director of the company on behalf of the company owner. In most cases, the nominee director and nominee shareholder can be the same person. This nominee director has no control over the company and is acting on the instructions of the actual and ultimate company owner.

Another practice in the past was to issue bearer shares for the proxy owner. These bonds contain no identification or name.  It served the purpose but owing to the fraudulent practices proliferated by it, measures were taken against money laundering by various jurisdictions. It is no longer a popular practice used.