If you’re reading this, you would know by now that to incorporate in Singapore, you need at least 1 local director who is a Singapore Citizen, Singapore Permanent Resident or holds a valid and relevant work visa like an Employment Pass (EP).
Chances are, you need a nominee director
In the short term, because you’re getting an EP in the meantime.
In the long term, because you’re looking to remotely operate an offshore company.
If you’re getting an EP, let me introduce you to the handbook of success. Click here.
If you’ll be operating an offshore company with a long term nominee director, let’s touch on that for a bit.
Difficulties in bank account opening with a nominee director
2020 and 2021 (let’s hope not any more than that), a sequence of events has landed us in one of the most difficult times to open corporate bank accounts.
Even pre-COVID, anti-money laundering (AML) laws were already facing scrutiny after a series of high-profile fraud cases.
COVID hit, no more travels. Banks were forced to conduct remote corporate account openings.
The use of nominee directors was at an all-time high. Banks are fully aware who are nominees and who are real directors.
It became difficult for foreign entrepreneurs to conduct business in Singapore, thus not being able to prove a tax substance here.
If you can’t justify a tax substance, or the need for a bank account in Singapore, you’re not going to get that bank account!
This rollercoaster ride taught us a few things. Times have changed and what used to be an administrative effort successful in a few days, is now a full team effort with weeks of strategic planning. We now know that tax substance is what banks are looking for- and we’ve prepared solutions for our clients. After all, without a bank account, how will your business run?
KOH NGO TEE
Singapore Company Incorporation with EP Marco Construction & Renovation Pte Ltd
“ It’s refreshing to collaborate with a team that is at the top of its game. Company registration, bank account opening, Employment Pass and Dependent passes all approved. Thank you. ”
Protecting against the risks of using a Nominee
The full power of your nominee director: Your nominee director is still a director! Most of the powers of a Singapore company are vested in the board of directors. The members of the board of directors have the final say over the company’s affairs. They are answerable to the shareholders of the company. Since a nominee director is a member of a Singapore company’s board of directors, the preceding facts also apply to nominee directors.
Keeping your nominee director in check: We can’t emphasize this enough- HAVE A LEGAL WRITTEN NOMINEE ARRANGEMENT. At Paul Hype Page, we have a well-defined legal statement that illustrates how our Nominee Directors do not get involved with business operations and are only to fulfil mandatory regulatory requirements.
What to expect when using a nominee from a service provider
Now that you’re comfortable with the idea of using a nominee director, let’s explain the common industry practices, and why some service providers require security deposits.
It is common for nominee service providers to package their nominee directors with an accounting service and request for refundable security deposits. This is because their nominees still hold the same duties, obligations and responsibilities as a regular director. If in any case companies are non-compliant with the annual compliance or are conducting fradulent activities, the nominee would be just as liable as the regular director.
A Director’s Duties will include:
Preparing and filing statutory documents with the company secretary
Manage all of the company’s accounting records and annual accounts
Calling for meetings (EGM and AGM)
Maintaining and keeping records of companies binding the company to contracts with suppliers, debtors, creditors, etc.
Dealing with the company’s constitution
If a director breaches his duties, the company can do any of the following:
Sue for damages, or a fine of up to SG$5,000 or to imprisonment for up to one year.
Demand the return of a secret profit or specific property
Declare the act invalid
Removal from office
Setting aside transactions
Claim damages or compensation for financial losses incurred
Tips: Most nominee directors won’t get involved in your business activities. No signing of operational contracts between suppliers or customers. Most assist with your bank account opening, but the banks know they are nominated and not a decision making director.
Step 1: Understand the role of nominee director and sign off the agreementNominee Director is someone who acts as a non-executive director on the board of directors of a firm. Typically, there is no shareholding requirement for the nominee director unless arranged otherwise.Paul Hype Page offers nominee director services for statutory compliance only.The nominee director will not be involved in any management, financial, or operational matters of the company. You must appoint one or more individuals (normally the company shareholders) as the company directors who will be responsible for running the company. You can ask our nominee director to resign at any time by identifying another person who can satisfy the local director requirement.
Step 2: Register an account on our iBizFile platform and fill up our 5 minute incorporation form.
Tip: iBizFile has an integrated name checking system. Heed our warnings if a name is taken and avoid obscene words that are doomed to fail. If your name has regulated words like “legal”, “school” or “money”, expect a delay in the name approval process.
Step 3: Make payment on our platform.
Step 4: In 15 minutes, you can finish uploading supporting documents, fill up our Know Your Client (KYC) form and sign registration documents.
Package for Foreign Entrepreneurs operating Overseas
Company Incorporation with 1 Year Nominee Director
Acra Registration Fee
Appointment of Company Secretary (for 1 year)
Registered Office Address (for 1 year)
Long-term Nominee Director (for 12 months)
If you do not require this service, the long term Nominee Director Service cost will be higher. (After 12 months, the same condition applies)
In times of uncertainty, Paul Hype Page is doing the best we can to accommodate to our clients and the difficulties of setting up your business in Singapore. We’re living day by day, waiting for travel restrictions to be lifted for businesses to resume. Our clients turn to us as their reliable support, to provide solutions. Talk to us if you need a customised solution.
Can a Nominee Director be a Foreigner?Tiwi2020-11-12T10:20:58+08:00
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.
Can I ask the nominee director to resign from my company?Tiwi2020-11-12T10:21:08+08:00
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.
Can any bank be used to open a Corporate Bank Account?Tiwi2020-11-12T10:21:30+08:00
There are no restrictions on which banks can be used to open a corporate bank account in Singapore. Thus, a company owner may select any bank for the opening of the corporate bank account. We recommend ASPIRE for its user-friendly features.