If you are a business owner looking to incorporate in Singapore or planning to set up a Singapore company as a foreign entrepreneur, it is essential to understand the requirement of appointing at least one local resident director. And for foreign entrepreneurs, this is also where you’ll be considering the appointment of a nominee director.
While common, nominee director appointments must be approached with a clear understanding of Singapore’s legal framework, responsibilities and risks.
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Who Is A Nominee Director And Why Do I Need One?
A nominee director is appointed to fulfil the requirements of the Singapore Companies Act nominee director framework under the Companies Act 1967.This act mandates the appointment of at least one locally resident director when foreign business owners set up a Singapore company.
Although a nominee director is not involved in the daily operations of a business, they are still subject to carrying out the full fiduciary duties of directorship, including statutory compliance, financial reporting, tax obligations and good faith duties.
The Legal Requirements Of A Nominee Director
A nominee director in Singapore must be an ordinary resident who falls into one of the five categories below:
- Singaporean Citizen
- Permanent Residence (PR)
- Employment Pass (EP) holders with a local residential address
- EntrePass holders with a local residential address
- Dependant Pass (DP) holders with a Letter of Consent (LOC) from the Ministry of Manpower (MOM)
All nominee directors are also required to sign a Nominee Director Indemnity Agreement that details:
- The (limited) scope of their position
- Their exclusion from daily operations
- The business owners’ responsibility for business actions
- The nominee director’s protection from personal liability
Once the Nominee Director Indemnity Agreement has been signed, a Corporate Service Provider (CSP) will consolidate the Director Appointment Notice, Form 45 and Statutory Declaration to file the nominee appointment with the Accounting and Corporate Regulatory Authority (ACRA) as part of the ACRA nominee director compliance process.
The Risks and Duties Of A Nominee Director Position
Although nominee directors are limited in scope due to not being involved in business operations, they can still be at risk for not executing their duties effectively.
Post the June 2025 legislation changes, nominee director appointments are now subject to higher scrutiny and demand utmost transparency. This requires nominee directors to undertake the responsibility for their company’s due compliance with corporate laws.
As non-compliance can result in legal penalties, nominee directors must have a comprehensive understanding of the businesses they represent. Directors who:
- Do not understand their business
- Are unaware of their organisation’s hierarchy
- Are unclear about the company’s finances
- Sign official documentation without meaningful review
Directors will find it difficult to show his/her diligence in the event of potential legal complications, especially in areas involving corporate income tax in Singapore reporting and financial disclosures.
Is It Legal to Hire a Nominee Director in Singapore?
Yes, it is completely legal to hire a nominee director in Singapore. However, please take note that all nominee director appointments are subject to mandatory compliance with the CSP Act 2024.
This requires all foreign businesses to engage with an ACRA-certified Corporate Service Provider (CSP) such as One Tax CM to set up a Singapore company.
Nominee director candidates will also be subject to mandatory “Fit & Proper” checks by the same ACRA-certified CSP. These checks involve assessments on:
- Criminal records
- Bankruptcy status
- Conduct and compliance history
- Previous directorship disqualifications
- Competency to fulfil obligations
- Existing directorships
These checks help ensure the candidates’ integrity, competence and capacity to act in accordance with Singaporean legal and regulatory standards.
Singapore’s Strict Anti-Money Laundering Stance And What It Means For Nominee Director Appointments
Effective from June 2025, the amended Singapore Corporate Service Providers Act 2024 (CSP Act) now calls for strict due diligence and transparency in all nominee director appointments.
Aligned with the Financial Action Task Force’s standards, the amendments are reflective of Singapore’s stringent, non-tolerating stance against money laundering and corporate structure abuse:
The amendments have also brought about significant updates to the nominee director appointment process, which now requires:
- Nominee directors to formally disclose their nominee status and the nominator’s identity to the company and for ACRA’s records.
- Companies to maintain an updated and accurate register of their nominee directors in their registered office or with their selected ACRA-certified CSP.
As negligence in the role can result in a minimum presumptive sentence of four months in prison, all nominee directors are required to uphold due vigilance and transparency in their role at all times.
Swift & Legal Nominee Director Appointments Via An ACRA-Certified Company Secretary
If you are looking for an experienced, ACRA-certified company secretary and CSP to help with your business registration in Singapore, we can help!
One Tax CM possesses extensive experience in supporting international founders to incorporate in Singapore, ensuring a smooth, hassle-free registration experience with solid regulatory compliance.